Disproportionate Share Hospitals serve a significantly disproportionate number of low-income patients and receive payments from the Centers for Medicaid and Medicare Services to cover the costs of providing care to uninsured patients. Disproportionate share hospitals are defined in Section 1886(d)(1)(B) of the Social Security Act. For more information, see the disproportionate share hospitals fact sheet (PDF - 1.1 MB).
To be eligible to participate in the 340B Drug Pricing Program, disproportionate share hospitals must meet the requirements of 42 USC 256b(a)(4)(L).
Disproportionate share hospitals may also register their outpatient clinics.
If the information received from CMS is current and correct, submission of worksheets and trial balances is not required. If a more recently filed cost report is available, or the hospital otherwise submits changes to the pre-identified information, the required documents must be submitted on the same day the registration is submitted. For details, please refer to the Hospital Registration Instructions (PDF - 267 KB).
Many hospital registrations do not require the submission of additional supporting documents. Hospitals will only need to submit documents when specifically alerted to do so during the registration process. If the hospital is unsure as to whether any alerts were received, OPA advises you submit the requested supporting documents as outlined in the Hospital Registration Instructions (PDF - 267 KB).
Government ownership/operation or contractual arrangements are verified electronically. Paper certification forms are no longer accepted. The Government Official (GO) you list on the registration will receive an automated email from OPA, and will have five business days to attest to the information. Non- responses from the GO will result in the registration being deleted without review.
Hospitals are encouraged to have the relevant documents available when registering to confirm that the data received from CMS is current and complete. Hospitals registering additional outpatient sites will also be asked to enter several figures from Worksheet A, Worksheet C, and the associated working trial balance from the hospital's latest filed cost report:
OPA and CMS are working closely to ensure that the most recent cost report and provider enrollment data are available to facilitate 340B registration. OPA verifies information on net expenses and outpatient charges with CMS data. Information on service/clinic cost and revenue entered by the hospital must be verifiable by supporting documentation. This documentation should be submitted only if requested.
When to submit supporting documents: If the data entered by the hospital regarding qualification information, net expenses, and/or outpatient charges, differs from what CMS provided to OPA, an alert will appear. In these cases, the hospital must submit supporting documents as described in the Hospital Registration Instructions (PDF - 267 KB). The hospital must submit the required documents by email or fax on the same day as the registration. When submitting documents via email, hospitals MUST include their Medicare provider number in the subject line of all communication with OPA. Affected registrations submitted without these documents will be deleted without being reviewed.
Whether the requested data is received from CMS or by email/fax directly from the hospital, the review steps are the same. OPA staff will ensure that the hospital meets the eligibility criteria established in the 340B statute and will reach out to the authorizing official listed on the registration for any necessary clarifications. Specific considerations include but are not limited to:
1. Ownership classification – To qualify for the 340B program, registrants must be:
If non-profit status for hospitals reporting eligibility via a government contract or grant of governmental powers cannot be verified by the information received from CMS, the registrant must also provide independent verification (e.g., articles of incorporation or IRS exemption determination/affirmation letter).
Important: New/parent hospital registrants must provide the name, title, organization, and contact information, including a valid email address, for a government official that can certify the public ownership/operation and/or an appropriate contractual relationship. That individual will be contacted by email and requested to verify the registrant’s status by following the link provided in the email within the next five calendar days, or by the end of the registration period, whichever comes first. If the government official fails to respond to the email within this time frame, the hospital’s registration will be deleted without further review.
2. Hospitals - For all hospital registrations, OPA reviews information from the following Medicare cost report worksheets (or their electronic equivalents) to ensure that the hospital meets 340B program eligibility requirements.
3. Outpatient Facilities - For outpatient facility registrations, OPA reviews information from the Medicare cost report worksheets as described under section 2 above. OPA also reviews Worksheets A and C, and a working trial balance or similar budget document.
Important note: All outpatient clinics and services that are located outside of the four walls of the hospital and that intend to use or purchase 340B drugs for its patients must register with the 340B program. They must appear on the hospital’s most recently filed cost report in order to register.
If an off-site location is actually a separate hospital or medical center, or even a small office with several services being provided, each clinic/department/service must be registered separately in the 340B program database. For example, if there is a single off-site location that provides radiology services, physical therapy services, and pediatric services, the covered entity should register each service individually to establish its eligibility for 340B drugs.
Once approved, an email confirming successful enrollment in the 340B Program will be sent to the authorizing official designated in the registration. This email will include the date on which you may begin purchasing 340B discounted drugs and your entity’s 340B identification number. The 340B identification number is your entity’s unique number that manufacturers, wholesalers, and others will use to verify your participation in the 340B Program. You should also use this number to regularly verify that your entity’s information is up-to-date in the 340B Program database. It is the covered entity’s responsibility to ensure that covered entity database information is current at all times.
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Hospitals that are eligible to participate in the 340B Drug Pricing Program in more than one category may select one. For example, a hospital that is both as a Disproportionate Share Hospital and a Sole Community Hospital may choose either type of eligibility and must abide by requirements and guidelines for that type of eligible organization/covered entity once enrolled.