Hospitals Concerned About Limits of HRSA’s 340B Enrollment Flexibility During Pandemic

Your 340B Report for Thursday April 16, 2020

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First responders and others pay tribute to nurses arriving for their shift at a suburban New York City hospital. Some hospitals across the country say they are upset they cannot take full advantage of 340B program enrollment flexibility being offered in light of the COVID-19 emergency. There are signs a resolution might be at hand. | (Source: Shutterstock)

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Hospitals Concerned About Limits of HRSA’s 340B Enrollment Flexibility During Pandemic

Some hospitals say they are frustrated that they cannot take full advantage of the Health Resources and Services Administration’s (HRSA) recent announcement that it is allowing immediate enrollment in the 340B drug pricing program during the COVID-19 pandemic on a case-by-case basis.

Hospital have told us that while they appreciate HRSA’s easing of several 340B program requirements during the emergency, they are upset that they cannot immediately enroll off-site facilities in 340B during the pandemic. The reason, they say, is HRSA’s decision to maintain its pre-pandemic policy of requiring such sites, as condition of enrollment, to be listed as reimbursable on the hospital’s most recently filed Medicare cost report and have associated outpatient costs and charges. Hospitals say if the cost-report requirement isn’t relaxed, it could keep them from accessing 340B pricing at otherwise eligible sites until Jan. 1, 2021, defeating the purpose of HRSA’s enrollment flexibility in response to COVID-19. That, in turn, would affect their finances and ability to care for patients during the pandemic, they say.

This morning, we asked HRSA for comment about hospitals’ concerns about immediate enrollment in 340B during the pandemic. We received this response:

HRSA understands the critical role that covered entities are playing at this time more than ever. We have worked with each entity that has contacted us and we are evaluating each circumstance situation based on the unique circumstances they present. To the extent we can provide an immediate enrollment into the 340B Program, we will work with the entity to do so. Otherwise, we are providing targeted technical assistance that supports the entity to ensure they are maximizing all possible opportunities to participate in the Program. HRSA encourages entities with questions to first contact the 340B Prime Vendor Program (1-888-340-2787 or apexusanswers@340bpvp.com) and they will coordinate technical assistance with HRSA. In addition, covered entities are also encouraged to visit the 340B Program COVID-19 webpage for other flexibilities during this time.

Soon after, a hospital that contacted us about its inability to enroll sites immediately in 340B told us it has been accommodated. It appears that at least some hospitals are not aware of this flexibility, either due to the lack of clarity in the government’s communications or because they may not have been afforded the same accommodation.

Hospitals explained to us that, due to pandemic-related reasons, they must file their new Medicare cost reports on July 31, 2020, rather than on May 31, 2020 as they originally intended. As a result, they say they cannot register otherwise eligible sites during HRSA’s normal July 1-15 340B registration period, as they had intended to do before the pandemic. Instead, they have to wait until HRSA’s Oct. 1-15 340B registration period, and these sites will be unable to begin participating in 340B until Jan. 1, 2021 at the earliest.

The hospitals say that being unable to register the sites for immediate participation in 340B and instead having to wait nine months for them to begin participating, all while absorbing significant losses due to the pandemic, will affect their ability to meet patients’ needs as well as their financial sustainability.

The hospitals said they would like the agency to allow them to affirm that the sites will be listed as reimbursable in the cost reports being filed on July 31. As of now, it looks like there may be a resolution to the matter. 340B Report will keep you informed.

340B health care providers: Please let us know if you are facing challenges with 340B enrollment, HRSA compliance audits, or facing other obstacles to using 340B during the pandemic. Write to us at info@340BReport.com.

OIG Audit Provides a Cautionary Tale on Telehealth

In addition to being more flexible about 340B enrollment during the pandemic, HRSA also is being more flexible about letting 340B providers offer telehealth services. In an FAQ on the subject, HRSA recommends that providers outline the use of telehealth in their 340B policies and procedures and make sure they keep auditable records for each eligible patient dispensed a 340B drug.

A newly released federal audit of South Carolina’s Medicaid fee for service (FFS) payments for telehealth services shows why providers need to have their ducks in a row when it comes to telehealth compliance.

The U.S. Health and Human Services Department (HHS) Office of Inspector General (OIG) examined a random sample of 100 South Carolina Medicaid FFS payments for telehealth services. Only three payments were deemed allowable.

OIG disallowed two of the other 97 payments surveyed because the services “were actually for in-office consultations, not telemedicine services.” For the other 95, “the providers documented neither the start and stop times nor the consulting site location of the medical service,” OIG said. Based on the sample results, OIG estimated that 96 percent of all of South Carolina's Medicaid FFS telemedicine payments from July 2014 through June 2017 were unallowable.

It recommended that the state refund the federal government $1.5 million, beef up its provider training on telehealth documentation requirements, and enhance its telehealth regulatory compliance. The state concurred with OIG’s findings but wants to pay back less because the disallowances were “not the result of the absence of a treatment plan and progress note, or documentation of medical necessity.”

With the unprecedented COVID-19 situation, federal and state regulators are significantly relaxing telehealth rules. As a result, many of these findings may not be applicable but it will be important to follow HRSA’s recommendations very closely.


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COVID-19’s Short and Long-Term Impact on 340B Stakeholders

In his latest column for 340B Report sponsor Pharmaceutical Strategies Group, 340B Report Publisher and CEO Ted Slafsky predicts that the COVID-19 pandemic “will ultimately have positive long-term benefits for 340B providers and patients.”

Slafsky predicts that cash strapped states will be pushing for reimbursement cuts to 340B providers. He believes they will have some success. “Despite the difficult road ahead, I am very optimistic about our long-term future,” Slafsky writes. There is new appreciation of health care workers and providers akin to the nation’s appreciation of first responders following 9-11, he says. COVID-19 has raised awareness about racial and ethnic disparities and unequal treatment in health care. “I expect a paradigm shift when it comes to investments in the healthcare safety net and the healthcare industry as a whole,” Slafsky continues. “I envision a new era focused on disease prevention, education, research and development. I also anticipate that young people will be more motivated than ever to devote their careers to science and medicine. As a result, we will see remarkable innovation that will truly benefit society.”

“We have also learned how important the 340B program is to hospitals and other providers serving our most vulnerable patients,” he concludes. “340B was already a lifeline for healthcare providers and patients prior to the pandemic. Now, it is an essential tool that will be strengthened in the coming years. For that, we can all be grateful.”

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Key House Democrats Lay Down Markers for COVID-19 Drug Pricing

Four influential U.S. House Democrats yesterday outlined three principles “to ensure any COVID-19 drug will be accessible and affordable for all people.” They want their principles  included in the next COVID-19 economic stimulus bill.

Senior Chief Deputy Whip Jan Schakowsky (Ill.), Transportation and Infrastructure Committee Chairman Peter DeFazio (Ore.), Labor-HHS Appropriations Subcommittee Chairwoman Rosa DeLauro (Conn.), and Ways & Means Health Subcommittee Chairman Lloyd Doggett (Texas) say, at a minimum, Congress should:

  • Deny drug manufacturers exclusivity for any COVID-19 vaccine, drug, or other therapy

  • “Mandate up front” that manufacturers must agree to sell such products at a reasonable price

  • Require manufacturers to publicly report total R&D, materials and manufacturing, and statutory and regulatory compliance expenses for such products.

Three-way negotiations over the next stimulus bill continue among congressional Republican leaders, congressional Democratic leaders, and the White House.


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CMS Releases $90 Million in COVID-19 Emergency Aid to Ryan White HIV/AIDS Program Grantees

The Health Resources and Services Administration (HRSA) yesterday released $90 million in COVID-19 emergency aid to Ryan White HIV/AIDS Program recipients across the country. The funding is from the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The money is going to 581 Ryan White HIV/AIDS Program recipients, including city/county health departments, health clinics, community-based organizations, state health departments, and AIDS Education and Training Centers, “in their efforts to prevent or minimize the impact of this pandemic on people with HIV,” the Health and Human Services Department (HHS) said.

In related news, Inside Health Policy (subscription required) reports that Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma said during a call with reporters yesterday that the second round of CARES Act grants to hospitals and other providers will start going out this week. CMS last week began delivering the first $30 billion of the $100 billion in COVID-19 relief to health care providers under the CARES Act. CMS came under fire for distributing the $30 billion on the basis of providers’ shares of 2019 Medicare fee-for-service reimbursements. Inside Health Policy reported that Verma said a portion of the new grants will be for providers in COVID-19 hot spots and “providers across the board, whether they serve Medicare patients, Medicaid, or private insurers, to make sure that all providers across the country are addressed.”

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