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The defining legislation for Freestanding Cancer Hospitals is Section 1886(d)(1)(B)(v) of the Social Security Act.
Freestanding Cancer Hospitals are independent, non-profit hospitals that treat patients with cancer. For-profit hospitals are not eligible to participate in the 340B program.
To be eligible to participate in the 340B Program and purchase outpatient drugs at significantly discounted prices, Freestanding Cancer Hospitals must be one of the following classifications:
- A private nonprofit hospital under contract with state or local government to provide health care services to low income individuals who are not eligible for Medicare or Medicaid; or
- Owned or operated by a unit of state or local government; or
- A public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government.
For-profit hospitals are not eligible to participate in the 340B program.
To be eligible to participate in the 340B Drug Pricing Program, Freestanding Cancer Hospitals must either
- Have a disproportionate share adjustment percentage greater than 11.75% for the most-recently filed cost report; or
- Be eligible under a separate indigent care calculation that meets specific criteria including location in an urban area, 100 or more beds and net inpatient care revenues (excluding Medicare) for indigent care of more than 30% of net during the cost reporting period in which the discharges occur. This indigent care revenue must come from state and local government sources and Medicaid.
Eligible in Multiple Categories
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.
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