We do not require a child site hospital location to register inpatient locations with observation beds. However, if a child site hospital voluntarily submits a registration for an inpatient location with observation beds, OPA will review the registration. In such a case, the hospital must provide Worksheets A and C and the associated trial balance to support the registration. HRSA reserves the right to ask for additional supporting documentation if necessary.
The 340B Program is an outpatient drug program. Enrolled covered entities have the duty to ensure that drugs purchased under the 340B Program be limited to outpatient use and provided to individuals who meet the requirements of the current patient definition. HRSA acknowledges that 340B eligible patients may receive healthcare services in observation beds located in inpatient sections of the hospital. If a hospital uses 340B drugs for patients receiving healthcare in observation beds, the hospital must be able to explain how the covered entity is responsible for the use of the drugs on an outpatient basis and have auditable records and policies and procedures that demonstrate compliance with 340B Program requirements. Policies and procedures should specifically address how the hospital defines inpatient and outpatient for purposes of the 340B Program, and how that relates to observation beds. HRSA’s audits will ensure the hospital is following those policies and procedures.