Breaking 340B Health News: Four New Guidelines Released for Covered Entities
The 340B Drug Pricing Program was created by Congress in 1992 to provide discounted pharmaceutical products to certain eligible healthcare providers, known as covered entities. The program has expanded significantly over the years, and as a result, new guidelines are often released to clarify the program rules. Recently, four new guidelines were released that covered entities should be aware of.
What is the 340B Program?
The 340B Program requires drug manufacturers to provide discounts on outpatient drugs to certain covered entities, such as community health centers, children’s hospitals, and cancer centers. These discounts allow hospitals and clinics to stretch their pharmacy budgets and provide more services to their patients.
New Guidelines for Covered Entities
The new guidelines released by the Health Resources and Services Administration (HRSA) cover several key areas, including:
1. Duplicate Discounts
The first guideline clarifies when a hospital or clinic can receive both a 340B discount and another discount, such as a Medicaid rebate, for the same drug. In general, covered entities should not receive both discounts, but there are some exceptions.
For example, if a covered entity dispenses a drug to a Medicaid patient and bills Medicaid for the drug, it can receive both the 340B discount and the Medicaid rebate. However, if the covered entity does not bill Medicaid for the drug, it can only receive the 340B discount.
2. Patient definition
The second guideline provides clarity on which patients are eligible to receive discounted drugs under the 340B Program. Specifically, the guideline defines what it means for a patient to be “in the scope of the covered entity.”
In general, a patient is considered “in the scope” if they receive care from a covered entity provider, even if the provider is not affiliated with the covered entity. However, there are some nuances to this definition that covered entities should be aware of.
3. Contract Pharmacy Arrangements
The third guideline clarifies the rules surrounding contract pharmacy arrangements. Covered entities are allowed to contract with outside pharmacies to dispense discounted drugs to eligible patients.
However, the new guideline requires covered entities to closely monitor their contract pharmacies to ensure that they are complying with all 340B rules. Covered entities must also ensure that their contract pharmacy agreements are updated annually.
4. Manufacturer Notification Requirements
Finally, the fourth guideline requires drug manufacturers to notify covered entities of any changes to their 340B Drug Pricing Program policies. Manufacturers must provide written notice at least 120 days before any changes take effect.
Conclusion
The 340B Program is an essential source of savings for many hospitals and clinics that serve vulnerable populations. The recently released guidelines clarify some key aspects of the program and provide important information for covered entities to ensure compliance.
Covered entities should pay close attention to these new guidelines and ensure that they are updating their policies and procedures as needed. By doing so, they can continue to provide quality care to their patients while also preserving the financial viability of their organizations.
