Health Reform WK-EDGE Experts detail 340B ‘patient’ definition at AHLA MMI 2021
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Monday, April 12, 2021

Experts detail 340B ‘patient’ definition at AHLA MMI 2021

By Patricia K. Ruiz, J.D.

The definition of "patient" under the 340B program has been an area of interest for the HRSA in recent years.

Criteria for who is considered a patient in the 340B program continues to be a hot topic, according to a presentation by Barbara Straub Williams, principal at Powers Pyles Sutter & Verville, PC, and Eva Johnson, senior advisor at Eyman Associates, in a presentation for American Health Law Association (AHLA) 2021 Virtual Institute on Medicare and Medicaid Payment Issues. In recent years, the Health Resources & Services Administration (HRSA) has made changes loosening these requirements to allow for more coverage under the 340B program.

Background. The purpose of the 340 B program is to allow eligible providers to stretch federal funding to reach more eligible patients and provide more comprehensive services. In the 340B program, as a condition of coverage of their drugs under Medicare Part B and Medicaid, manufacturers agree to provide discounts on covered outpatient drugs to certain safety net providers. Manufactures sign a Pharmaceutical Pricing Agreement to participate in the program. Entities eligible for discounts under the program include disproportionate share hospitals, children’s hospitals, critical access hospitals, and sole community hospitals, among others.

Definition of "patient." One of the principal compliance issues in the 340B program, according to the presenters, is anti-diversion and patient eligibility. The definition of "patient" under 340 B includes three criteria:

  • the covered entity must maintain records of the individual’s health care;
  • the individual must be under the care of a physician or other health care professional employed by, under contract with, or in a referral relationship with the covered entity, such that responsibility for the individual’s care remains with the covered entity; and
  • the individual must receive a range of health care services consistent with the services for which grant funding or FQHC look-alike status has been provided to the covered entity (not applicable to hospitals).

In 2019, the Trump Administration issued Executive Order (EO) 13992, under which any enforcement action taken by a federal agency must be supported by statute or regulation, and not guidance. HRSA does not have authority to issue regulations on the definition of "patient." The Biden Administration ultimately withdrew the EO. The same year, a federally qualified health center in South Carolina challenged in court the findings of an HRSA audit on prescriptions written by outside prescribers. The HRSA withdrew the audit.

Relaxation of requirements. HRSA relaxed patient definition policies, allowing prescriptions for self-administered drugs to be filled with 340B drugs if they are written as the result of health care services outside the covered entity and:

  • the physician is employed by, under contract with, or credentialled at, the covered entity;
  • the covered entity has access to the medical records of the prescriber or has a summary of the health care visit that resulted in the prescription;
  • the patient had a prior inpatient stay or outpatient visit at the covered entity; and
  • the prescribed drug is related to the prior inpatient stay or outpatient visit.

Further, HRSA stated in an FAQ that, for hospitals who are unable to register their outpatient facilities for reimbursement because they are not yet on the most recently filed Medicare cost report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity.

Attorneys: Barbara Straub Williams (Powers Pyles Sutter & Verville, PC,). Eva Johnson (Eyman Associates).

IndustryNews: NewsStory 340BNews AccessNews AgencyNews MedicaidNews MedicarePartBNews ProviderPaymentNews

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