Coronavirus: HRSA Issues Guidance Outlining Flexibility to 340B Providers

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The Health Resources and Services Administration's (HRSA) Office of Pharmacy Affairs (OPA) has created a COVID-19 Resources page on its website providing information for 340B drug pricing program stakeholders. In particular, the guidance addresses flexibility that HRSA may afford to providers participating in the 340B program (covered entities) related to program compliance, eligibility, and registration during the COVID-19 public health emergency.

The guidance instructs 340B stakeholders to contact the 340B Prime Vendor if there are concerns that the "COVID-19 response may affect their compliance or eligibility in the 340B Program." The Prime Vendor will "coordinate with HRSA technical assistance and evaluate each issue on a case-by-case basis." The Prime Vendor can be reached via phone at 1-888-340-2787 (Monday – Friday, 9 a.m. – 6 p.m. ET) or via email at apexusanswers@340bpvp.com.

HRSA's COVID-19 website also addresses "general flexibilities" for 340B-covered entities and includes answers to frequently asked questions. Below, we outline HRSA's guidance by subject area.

340B Patient Definition

The 340B statute prohibits covered entities from transferring or reselling a 340B-acquired drug to an individual who is not a patient of the covered entity. Existing HRSA guidance addresses who is a 340B-eligible patient. In response to a question as to whether HRSA will "relax its standards around the definition of a patient" related to COVID-19 treatment, HRSA indicates the agency is "unable to waive 340B statutory requirements, specifically the provision related to reselling or otherwise transfer the drug to a person who is not a patient of the entity." HRSA advises stakeholders to "review the content on this webpage for certain flexibilities during this time related to recordkeeping."

With regard to recordkeeping, HRSA's COVID-19 guidance indicates, "In determining whether an individual qualifies to receive 340B drugs, HRSA believes that it is appropriate to take into account the realities of the COVID-19 pandemic." HRSA provides the following guidance:

  • Auditable Records. HRSA advises covered entities to continue to maintain 340B policies and procedures that ensure the existence of auditable records during the public health emergency. The agency may allow "an abbreviated health record" during the public health emergency to meet patient definition requirements. The record may be a single form or note page, but it should: "identify the patient, record the medical evaluation (including any testing, diagnosis or clinical impressions), and the treatment provided or prescribed." Although covered entities may not be able to access documented medical histories, "self-reporting" by patients may be appropriate for 340B record-keeping purposes during the public health emergency.
  • Volunteer Health Professionals. Current patient definition guidance requires an individual to have received health care services from a health care provider who is employed by, under contract with, or under other arrangements with the covered entity such that responsibility for the care provided remains with the covered entity. HRSA indicates that, if a volunteer health professional provides care during the public health emergency, the covered entity should have "emergency documentation" to "make the relationship between the provider and the covered entity clear and to make clear the covered entity's responsibility for providing care." In addition, the "documentation should recognize the emergency nature of the situation, the name and address of the volunteer, and his/her relationship to the clinic, and should be kept on file by the covered entity."

Covered Entity and Child Site Registrations

Current HRSA guidance allows covered entities to register for program participation or add new outpatient facilities to existing covered entity registrations as "child sites" during an open registration window in the first two weeks of each calendar quarter. New registrations are not active until the beginning of the following calendar quarter. HRSA's guidance addresses questions about covered entities wanting to expand services to new sites to address the surge of COVID-19 patients and whether HRSA will allow any "special exemptions" to the 340B registration process.

In response, HRSA instructs providers to contact the Prime Vendor Program, which "will evaluate each circumstance on a case-by-case basis." HRSA also directs stakeholders to "review the content on this webpage for certain flexibilities during this time."

GPO Prohibition

Hospitals that participate in 340B as DSH hospitals or free-standing children's or cancer hospitals may not purchase or obtain covered outpatient drugs through a group purchasing organization (GPO) or group purchasing arrangement. HRSA guidance provides limited exceptions to this GPO prohibition. Hospitals have expressed concern that, during the public health emergency, drugs are in short supply and it may be difficult to obtain covered outpatient drugs at non-GPO pricing.

In response to a question as to whether HRSA will allow hospitals subject to the GPO prohibition to purchase covered outpatient drugs through a GPO to address the COVID-19 crisis, HRSA indicates the agency is "unable to waive the 340B statutory requirements, specifically with respect to [the GPO prohibition]."

However, HRSA reiterates guidance currently articulated through an FAQ on the OPA website, which provides detailed instructions that may allow hospitals to obtain a covered outpatient drug through a GPO due to a shortage. In these cases, hospitals may not purchase covered outpatient drugs facing a shortage through a GPO unless they first attempt to purchase the drug at 340B pricing, then at wholesale acquisition cost (WAC) pricing, and only purchase through a GPO if the hospital immediately notifies OPA with details on the drug, the manufacturer, and "the communication between the parties as to why the product was not available at 340B or WAC." HRSA directs hospitals to contact HRSA at 340Bpricing@hrsa.gov.

Telehealth Services

HRSA addresses flexibilities available to covered entities to "allow a provider to offer telehealth services." Current HRSA guidance does not directly address whether individuals who receive health care services from covered entities via telehealth may be eligible to receive a 340B drug. Covered entities will likely increase their use of telehealth in light of recent guidance waiving restrictions on the use of telehealth under Medicare during the public health emergency.

HRSA acknowledges that "telemedicine is merely a mode by which the health care service is delivered." HRSA recommends that "covered entities outline the use of these modalities in their policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug."

HRSA Audits of Covered Entities

HRSA indicates the agency does not plan to suspend or cancel covered entity audits as a result of COVID-19. Instead, HRSA indicates it will be "conducting 340B Program covered entity audits remotely (virtually) for the next several months while we monitor and assess the impact on the covered entities." It is not clear from this guidance what, if any, flexibility with regard to audits might be available to covered entities during this COVID-19 pandemic. However, HRSA advises covered entities to raise specific questions they have concerning their audit with the Bizzell Group, the contractor that conducts 340B audits for HRSA, at 340baudit@thebizzellgroup.com. The Bizzell Group, in turn, will be coordinating with HRSA on the specifics of covered entity requests. The guidance also notes that HRSA will "continue to monitor the COVID-19 response and provide updates accordingly."

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Baker Donelson will continue to monitor HRSA guidance and will provide updates regarding any additional flexibility afforded to covered entities related to their 340B program participation. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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