Consistent with section 340B(a)(1) of the Public Health Service Act, manufacturers are expected to provide the same opportunity for 340B covered entities and non-340B purchasers to purchase covered outpatient drugs when such drugs are sold through limited distributors or specialty pharmacies. This extends to the manner in which 340B drugs are made available to covered entities (e.g., direct sales versus through wholesalers, specialty pharmacies, or limited distributors.) Additional information can be found in the following Policy Release (Clarification of Non-Discrimination Policy. Release No. 2011-1.1 (May 23, 2012)).
Manufacturers should notify HRSA of its intent to implement a specialty distribution channel to ensure compliance and ensure that entities are aware of the distribution channel for transparency and to limit any disputes.
No. 340B pricing applies to covered outpatient drugs only.
Section 340B(a)(8) of the Public Health Service Act requires the establishment of a prime vendor program (PVP). The purpose of the PVP is to develop, maintain and coordinate a program capable of distribution, facilitation and other activities in support of the 340B Program. The PVP is a voluntary program for 340B covered entities and serves its participants in three primary roles:
- Negotiating sub-340B pricing on pharmaceuticals;
- Establishing distribution solutions and networks that improve access to affordable medications; and
- Providing other value-added products and services.
All covered entities may participate in the PVP including hospitals that are prohibited from purchasing in a group purchasing arrangement.
HRSA considers the 340B ID the unique identifier. While HRSA does not use Health Industry Numbers (HIN) as a method of identifying 340B covered entities, we recognize that HIN and DEA numbers may be used by certain stakeholders, in addition to the 340B ID, to operationalize the 340B Program.
Covered entities should always ensure they are adhering to all federal, state, and local laws. Covered entities contracting with pharmacies to dispense 340B drugs should be aware of the federal anti-kickback statute and the way in which such requirements could apply to their arrangements with contract pharmacies. Cases of suspected violations of the anti-kickback statute should be directly referred to the Office of the Inspector General (OIG) who oversees this provision. The OIG can be reached at:
Online, Phone: 1-800-HHS-TIPS (1-800-447-8477) Fax: 1-800-223-8164
*Note: While you may remain anonymous, in order to accept submissions for review via facsimile, the OIG Hotline requires a complaint to include a formal cover letter or the use of the downloadable complaint submission form, available
Hotline Complaint Submission Form (PDF - 34 KB)
Hotline Complaint Submission Form (MS Word - 178 KB)
The 340B Prime Vendor Program, as part of its agreement with HRSA, provides online tutorials, templates, and other tools to aid in educating and informing 340B Program stakeholders about the program. Specifically, the 340B Prime Vendor offers educational programs, including 340B University and 340B University OnDemand. They also operate a call-center and have a database of FAQs. These educational materials have been reviewed and approved by HRSA. Please visit the 340B Prime Vendor Program website for more information.
340B Program Eligibility
HRSA is now requesting documentation to support the hospital classification selected at the time of registration to further verify eligibility of parent hospital registrations.
The 340B OPAIS will prompt Authorizing Officials and Primary Contacts (AOs and PCs) to upload supporting documentation for the “Hospital Classification” selected at the time of registration of a parent hospital. These include:
- “Private, non-profit which has a contract with a unit of State or local government.”
- “Owned or operated by a State or local government.”
- “Public or private non-profit corporation, which is formally granted governmental powers by a unit of State or local government.”
If a hospital is changing classifications during recertification, they will also be required to upload supporting documents.
A hospital that is private, non-profit with a contract with a state or local government to provide health care services to low income individuals who are not entitled to benefits under Medicare or eligible for State Medicaid, is eligible for the 340B Program. A written contract must exist between the hospital and state or local government to demonstrate the hospital’s eligibility for the 340B Program. The written contract must be current, signed by authorized representatives of the hospital and the state or local government, and specify the hospital’s obligation to provide health care services to low income individuals. The written contract should be in effect prior to registering for the 340B Program and be current throughout the hospital’s participation in the 340B Program. HRSA expects that the written contract will be available upon request.
An entity receiving in-kind contributions through section 317 or 318 may qualify for the 340B Drug Pricing Program provided all the remaining 340B requirements are met. Qualifying in-kind contributions must be paid for by section 317 or 318 grant funds to qualify a site as 340B eligible. In-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and goods and services directly benefiting and specifically identifiable to the project or program. A grantee should contact the granting agency project officer to determine if the in-kind service meets the agency's definition of in-kind.
Yes, it is the covered entity’s responsibility to notify the HRSA Office of Pharmacy Affairs immediately if the entity learns it may no longer be 340B eligible.
The 11.75% requirement is waived for a few hospitals known as "Pickle" hospitals (named for a JJ Pickle, a former member of Congress). They are defined in the Section 1886(d)(5)(F)(i)(II) of the Social Security Act as "a hospital that serves a significantly disproportionate number of low income patients and is located in an urban area, has 100 or more beds, and can demonstrate that its net inpatient care revenues (excluding any of such revenues attributable to this title or State plans approved under title XIX) during the cost reporting period in which the discharges occur, for indigent care from state and local government sources exceed 30 percent of its total of such net inpatient care revenues during the period.”
No. Under the final guidelines a facility must be both reimbursable and included in the hospital’s most recently filed Medicare cost report. The outpatient facility guidelines can be found at (59 Fed. Reg. 47884 (Sept. 19, 1994) (PDF - 1 MB).
Off-site outpatient facilities are eligible child sites of a 340B hospital in the following circumstances:
- The outpatient facility is listed as a reimbursable facility on a 340B hospital covered entity’s most recently filed Medicare cost report and have associated outpatient costs and charges. If the facility is a free-standing clinic of the hospital that submits its own cost reports using a different Medicare number (not under the covered entity’s Medicare provider number), then it would NOT be eligible. Specific guidance (PDF - 1 MB) was released in 1994. Hospitals registering outpatient facilities will be asked to enter several figures from Worksheet A and Worksheet C from the latest filed Medicare cost report and the associated trial balance to determine eligibility. For more information on hospital off-site outpatient facility registration requirements, visit Hospital Registration Instructions (PDF).
- For hospitals, all clinics located off-site of the parent hospital, regardless of whether those clinics are in the same offsite building must register as child sites of the parent 340B-eligible hospital if the covered entity purchases and/or provides 340B drugs to patients of those facilities. For example, if the off-site outpatient facility is a hospital, all clinics/departments within that off-site location that plan to purchase and-or provide 340B drugs to its outpatients must register as a child site.
Outpatient clinics/departments within the four walls (i.e., same physical address) of the registered parent 340B hospital do not need to also register/enroll into the 340B Program. However, the covered entity remains responsible for demonstrating that those outpatient clinics/departments are listed as reimbursable on the hospital’s most recently filed Medicare cost report, are only using 340B drugs for eligible outpatients, meet all 340B Program requirements, and maintain auditable records. Clinics at an offsite location from the registered parent must separately register on the 340B database, even if they are located within the four walls of that child site. This applies to all registered areas of offsite (from the parent) clinics/hospitals. Every eligible clinic which will purchase or use 340B drugs within such a hospital must register separately as a child site.
HRSA does 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 and 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 responsibility 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 observations 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.
Only hospital outpatient facilities that appear as reimbursable outpatient cost centers on the hospital’s most recently filed Medicare cost report are eligible to be listed and participate in the 340B Program. HRSA requires each hospital to register all of its off-site outpatient facilities where 340B drugs are purchased and/or provided to patients of that facility. This will ensure that each facility has been reviewed and verified by HRSA as eligible to participate in the program, therefore strengthening the hospital’s compliance efforts.
Pharmacies are not eligible 340B covered entities and therefore, should not be listed as a child site with a 340B ID in the database. It should then be determined whether it is appropriate for the pharmacy to be added as a “ship to” address for the actual covered entity in the database. If the pharmacy is located within an offsite outpatient facility that also provides healthcare services and provides 340B drugs to its patients, the outpatient facility must be registered as a child site with the pharmacy listed as a “ship to” of that outpatient facility. When a pharmacy is supporting multiple child sites of a parent entity, the pharmacy should be listed as a “ship to” address under the parent’s 340B ID.
All sites that purchase and use 340B drugs for their eligible patients must be listed on the 340B OPAIS. In order for non-hospital health care delivery sites to purchase 340B drugs or provide 340B drugs to their patients, they must first be eligible through the (non-hospital) covered entity’s grant and listed on the 340B database. Clinics located off-site of the parent covered entity, regardless of whether those clinics are in the same building, must register with OPA as outpatient facilities of the parent 340B covered entity if the covered entity purchases or provides 340B drugs to patients of those facilities.
Hospitals become ineligible for the 340B Program on the day a Medicare Cost Report (MCR) is filed with Centers for Medicare & Medicaid Services (CMS) with a DSH percentage below the applicable eligibility threshold. Hospital offsite outpatient facilities failing to the meet the registration eligibility requirements (listed as reimbursable on the MCR with associated outpatient costs and charges) become ineligible on the day the hospital files the MCR. If either occurs, the hospital should stop purchasing 340B drugs immediately and terminate their record in 340B OPAIS. If the hospital purchased while they were ineligible, the hospital should send the Office of Pharmacy Affairs (OPA) a self-disclosure to email@example.com. HRSA may accept an amended MCR as long as it is considered the latest filed MCR by CMS. The hospital must submit a signed, dated, and electronically-stamped Worksheet S, along with other requested worksheets, as evidence the MCR was amended and filed with CMS. If the hospital chooses to file an amended MCR, the hospital may resume purchasing 340B covered outpatient drugs after the amended MCR is filed with CMS, sent to HRSA, and subsequently accepted by HRSA. The amended MCR may not be applied retroactively for 340B purposes and HRSA reserves the right to request additional documentation if necessary. The hospital may be liable for any 340B purchases made during the period of ineligibility between when the original MCR was filed to when the amended MCR was filed, depending on the specific circumstances of the case.
HRSA does not authorize covered entities to reclassify a purchase as 340B eligible after the fact. Covered entities participating in the 340B Program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, the covered entity should first notify manufacturers and ensure all processes are fully transparent with a clear audit trail that reflects the actual timing and facts underlying a transaction. Drug transactions may be credited and rebilled within the wholesaler’s contracted and allowed timeframe according to standard business practices, however the covered entity retains responsibility for ensuring full compliance, transparency, and integrity of its use of the 340B Program.
The 340B Program is an outpatient drug program. Enrolled covered entities have the responsibility 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. 340B drugs can be used for discharge prescriptions to the extent that the drugs are for outpatient use. Whether a drug qualifies as outpatient and the individual meets the definition of patient depends upon the factual circumstances surrounding the care of that particular individual. If a covered entity uses 340B drugs, it should be able to explain why the covered entity is responsible for the use of the drugs on an outpatient basis and have auditable records that demonstrate compliance with 340B Program requirements.
A hospital may use 340B drugs for patients treated in mixed-use settings that appear as reimbursable cost centers on the hospital’s most recently filed Medicare cost report and meet patient definition guidelines. The hospital must develop appropriate tracking systems to ensure that covered outpatient drugs purchased through the 340B Program are not used for hospital inpatients. It is the responsibility of the hospital to ensure appropriate safeguards are in place to protect against diversion. If a hospital is unable to implement an effective tracking system, it should not use the 340B Program in that setting.
340B Office of Pharmacy Affairs Information System
The new 340B Office of Pharmacy Affairs Information System (340B OPAIS) replaced the legacy 340B Database in its entirety and includes security updates and enhancements for covered entity/manufacturer registrations, change requests, recertification, and other updates. Some of the key features of 340B OPAIS are:
- Manufacturers’ and covered entities’ ability to manage their own 340B record.
- Improved efficiency through a task-oriented landing page for the covered entities’ and manufacturers’ Authorizing Officials and Primary Contacts. Additionally, covered entities and manufacturers receive e-mail notifications of pending tasks.
- Enhanced security features such as two-part authentication for covered entities and manufacturers.
Individuals from manufacturer or covered entity organizations listed as an Authorizing Official (AO) or Primary Contact (PC) of a manufacturer or covered entity record are required to create a secure user account. The AO or PC then has access to the 340B records the AO or PC are associated. There is only one AO and PC per 340B record. A 340B record is defined as an individual manufacturer labeler code or covered entity 340B ID.
All AOs and PCs for a manufacturer or covered entity are required to log into 340B OPAIS and create a user account before any access is granted to the 340B record. Steps for creating a user account are determined by whether the user is currently listed with a 340B OPAIS record or are a first time user requesting to be associated with a manufacturer or covered entity record.
The login credentials required for 340B OPAIS include a username, which is the email address used to register for 340B OPAIS, and a self-created password. The user will also receive a 6-digit authentication code via email, each time you attempt to login.
To create an account in 340B OPAIS, please use the following steps:
- From the 340B OPAIS home page, click the “I am a Participant” icon or click the “Login” icon in the top menu.
- Click the “Create new account” link.
- Type your email address in the space provided and click “Search.”
- The “Create a New User” registration page will be displayed:
- If your email address is currently associated with an active or approved covered entity or manufacturer record as an AO or PC, your email address, name, title, organization (if available), phone number and extension will be populated automatically.
- If your email address has not been previously associated with a covered entity or manufacturer, enter your name, title, organization name (employer), phone number, and extension in the spaces provided before proceeding. All fields are required except phone extension.
- For “Parent Entity Type,” select either covered entity or manufacturer.
- Type your password and then type it again to confirm.
- Type the CAPTCHA code displayed in the image in the text box.
- Click “Register.”
The 340B OPAIS will check for an existing account with your email address and validate the account. OPA Staff will review new user account requests and confirm or deny access to the 340B record.
These steps along with your account validation activity are found in the 340B OPAIS Public User Guide (PDF - 5 MB) on the 340B website, specifically the section on creating an account.
For authorized users with an existing account in 340B OPAIS, you can use the following steps to log into 340B OPAIS:
- Click “Login” in the top menu of the 340B OPAIS homepage or click the “I Am a Participant” icon.
- Type your email address and password in the spaces provided.
- Click “Sign In.”
- If your login credentials are correct and you have an active account, the system will display the “Two-Step Authentication” page and send you an email containing a 6-digit authorization code.
- Copy the authentication code from that email, paste it in the “Code” text box
- Click “Submit Code.”
- The system will prompt you to agree to the “340B OPAIS Rules of Behavior.”
- Click on the checkbox next to the acknowledgement of responsibilities statement.
- Click “Agree” or “Cancel” button.
These steps can be found in the 340B OPAIS Public User Guide (PDF - 5 MB) on the 340B website.
Please use the following steps to reset your password in 340B OPAIS:
- From the login page, click “Recover Your Account” link.
- Type your email address.
- Click “Reset Password.”
- An email will be sent to you containing a password reset URL.
- Click the URL in the email message.
- Enter and confirm your new password.
- When reset is complete, you may proceed to log in as usual.
These steps can be found in the 340B OPAIS Public User Guide (PDF - 5 MB) on the 340B website.
If the user is already registered in 340B OPAIS and the user no longer has access to the registered email address, the user will need to create a new account via the online change request process. HRSA’s Office of Pharmacy Affairs (OPA) will review and determine whether to approve the submitted change request.
If you are using your current email address to access 340B OPAIS, but would like to change that email address, you will need to submit a change request via the online change request process.
The step-by-step instructions for submitting a change request can be found in the 340B OPAIS Public User Guide (PDF - 5 MB) on the 340B website.
Except for new account creation, only a covered entity or a manufacturer AO or PC can submit an online change request. Only an AO has the ability to approve on behalf of the covered entity or manufacturer and submit a change request. Manufacturers will no longer have a paper change request process and will follow the same online change request process as covered entities.
For help on how to submit a change request please refer to the 340B OPAIS Public User Guide on the 340B website.
340B OPAIS has public search and reports functionalities, with limited public viewing privileges, that will still be available. Covered entity, manufacturer, and contract pharmacy profiles are still accessible for public viewing. All registration, recertification, change and termination requests for covered entities and manufacturers can perform these actions in 340B OPAIS and are only accessible by their respective AO and PC.
In 340B OPAIS, contract pharmacy registrations can be submitted concurrently with the associated Covered Entity registration by either the AO or the PC. Only the AO is able to approve and submit the contract pharmacy registration.
Authorized covered entities and manufacturers are only granted one AO and one PC per 340B record. A 340B record is defined as an individual manufacturer labeler code or covered entity 340B ID. For covered entity hospitals and their outpatient facilities, as well as community health centers and their associated grant sites, each record has one AO and one PC per record. There is a requirement for hospital covered entity types that the AO be the same for all child sites, but the PC may be a separate person for each record. For example, hospital A with three outpatient facilities has the same AO for all records, but may select a separate PC for each record. While each record has only one AO and PC, the PC is not required to be the same person on each record. Manufacturers with multiple labeler codes may select different AOs and PCs for each labeler code.
An associated site is terminology used by HRSA’s OPAIS to indicate sites that share grant numbers (CHCs) or a designation number (Federally Qualified Health Center Look-alikes). Prior to September 2017, these covered entity types had a parent-child relationship. The 340B ID numbers of these entity types will not changing only the terminology: from parent-child to “associated sites.” No other type of covered entity will have the associated site terminology.
For recertification in 340B OPAIS, the AO is notified of dates, times, and requirements of recertification via their listed email in 340B OPAIS. The AO has access via their 340B OPAIS user account-landing page where the AO has access to all 340B records their linked to and those that require annual recertification. At the start of covered entity recertification, a task is created in the PC’s task list for each 340B record that must be recertified. The same task is created in the AO’s task list. Either the PC or the AO can complete recertification for a covered entity record, but only the AO can attest and submit it to OPA. If the PC completes recertification for a covered entity record, that creates a task in the AO’s task list. The AO can make changes if necessary before attesting and submitting to OPA.
Manufacturers must submit 340B pricing information to HRSA, which will begin within a two week period starting on or about day 45 of the quarter. The pricing component of the 340B OPAIS will send an email alert to the registered authorizing official and primary contact of the manufacturer when the two-week window for reporting is open, as well as daily reminders that tasks are pending within the pricing component of the 340B OPAIS.
Manufacturers may log into the 340B OPAIS Pricing application and upload a formatted text/instrument file or manually enter the required data points containing their quarterly data. Specifics on the text/instrument file upload format can be found in the manufacturer user guide.
No, the 340B OPAIS pricing system is only available to actively participating covered entities. Once terminated, covered entities will no longer have the ability to log into the pricing system.
The hospital’s authorizing official upon enrollment, attests that the hospital “...will not participate in a group purchasing organization or group purchasing arrangement for covered outpatient drugs as of the date of this listing on the OPA website.”
The GPO prohibition applies to all disproportionate share hospitals, children’s hospitals, and freestanding cancer hospitals enrolled in the 340B Program. The GPO Policy Release does not apply to entities registered as any other type of covered entity.
The answer depends on how the HTC is registered with respect to the hospital. If the HTC is within the four walls of a parent hospital subject to the GPO prohibition and not separately registered for the 340B Program with a 340B ID beginning with “HM”, the HTC may not use an outpatient GPO. If the HTC is registered as an off-site outpatient clinic of a hospital subject to the GPO prohibition, the HTC may not use an outpatient GPO. If the HTC is an off-site outpatient facility of a hospital subject to the GPO prohibition, but is not registered for the 340B Program (as a child site of the hospital) and meets all of the following, if may use a GPO for covered outpatient drugs: 1. Is located at a different physical address than the parent; 2. Is not registered on the OPA 340B database as participating in the 340B Program; 3. Purchases drugs through a separate pharmacy wholesaler account than the 340B participating parent; and 4. The hospital maintains records demonstrating that any covered outpatient drugs purchased through the GPO at the HTC are not utilized or otherwise transferred to the parent hospital or any outpatient facilities registered on the OPA 340B database. If the HTC is otherwise an eligible entity and registered as such (340B identification number beginning with “HM”), then it is not subject to the GPO prohibition with respect to its own patients. In no circumstances may the HTC’s permitted use of a GPO be used to circumvent the GPO prohibition for a hospital and its outpatient clinics subject to the GPO prohibition.
A covered entity that is subject to the GPO prohibition may not use a GPO for covered outpatient drugs at any point in time. However, if a covered entity is unable to purchase a covered outpatient drug at the 340B price, they should first try and work with the manufacturer to obtain the product at the 340B price. If they are still unable to obtain the product at the 340B price, they should then try to obtain the product at WAC. If they are also unable to purchase the product at WAC, entities may use a GPO only if they then immediately notify OPA detailing the covered outpatient drug(s) involved, the manufacturer, and the communication between the parties as to why the product was not available at 340B or WAC, by submitting the HRSA Template Notification Tool: Unavailable 340B Price (DOCX - 59 KB). In situations where a product is unavailable at 340B or WAC, and the covered entity can document that all other options have been exhausted, the covered entity should maintain auditable records demonstrating the circumstance, and show they attempted to purchase the product at 340B every time an order was made. Covered entities may not use the fact that they were unable to obtain a product on one day, to then use a GPO for an extended period of time.
The definition of covered outpatient drug is found in section 1927 (k) of the Social Security Act. The availability of a 340B price is not dispositive in determining whether that drug meets this definition of a covered outpatient drug.
Yes. Covered entities should maintain auditable records and policies and procedures related to the definition of covered outpatient drug and the use of a GPO that is consistent with the 340B statute.
No. Under section 340B(a)(4)(N) of the Public Health Service Act, as amended by the Affordable Care Act, the prohibition against participation in GPO arrangements does not apply to critical access hospitals, rural referral centers, or sole community hospitals. The GPO prohibition only applies to 340B-enrolled disproportionate share hospitals, children's hospitals, and free-standing cancer hospitals.
The hospital must keep auditable records demonstrating that accumulation occurs for inpatient GPO or outpatient 340B for eligible patients (as defined by current patient definition guidelines (61Fed. Reg. 55156 (Oct. 24.1996)). A non-GPO outpatient account should be available for replenishment for covered outpatient drugs in the event a 340B product is not available.
The 340B participating hospitals within the hospital system in this scenario have separate 340B registrations. For the hospitals registered for the 340B Program as a DSH, children’s hospital or freestanding cancer hospital, conducting price negotiations for covered outpatient drugs with any other hospital would create a prohibited group purchasing arrangement. The hospital system may negotiate prices for inpatient drugs only.
Yes. All covered entities may participate in the PVP, although disproportionate share hospitals, children's hospitals, and freestanding cancer centers that participate in the 340B Program are prohibited from purchasing covered outpatient drugs through a GPO. 340B Prime Vendor participation is voluntary, and there are no restrictions placed on covered entities electing to participate. Most alternative purchasing groups serving 330 grantees and other entities encourage participation in the 340B PVP to ensure members have access to best pricing on pharmaceuticals while offering members their own contract portfolios of medical/surgical, dental, office, and other non-pharmacy supplies, which tend to be complementary to the 340B PVP pharmacy portfolio. On occasion, there may be an alternative purchasing group that does not permit a member to simultaneously access their own contracts and 340B PVP contracts due to existing business relationships with a supply partner. In this situation, the covered entity may be required to notify the alternative purchasing group to cancel its membership before the selected pharmacy wholesaler will load the 340B PVP pricing available to the entity's pharmacy account.
The purpose of the PVP sub-WAC pricing in the non-GPO/WAC account is to support compliance for hospitals subject to the GPO Prohibition. Hospitals subject to the GPO Prohibition (DSH, PED, CAN) access the sub-WAC contracts in the non-GPO/WAC account as part of the Prime Vendor Program. This account was not intended for covered entities such as federally qualified health centers that are not subject to the GPO Prohibition.
Covered entities may only distribute 340B drugs to their employees that meet section 340B(a)(5)(B) of the Public Health Service Act. the patient definition guidelines set forth under the 340B Program. For more information, current patient definition guidelines, see 61 Fed. Reg. 55156 (Oct. 24, 1996). The 340B Program is limited to patients of the covered entity and has never been a general employee pharmacy benefit or self-insured organization pharmacy benefit. Evidence of an employer relationship or insurer relationship alone is insufficient to determine 340B patient eligibility.
Yes, as long as they are patients of the covered entity.
STD (318 grantee) clinics that participate in the 340B Program may purchase 340B drugs (including prescribed contraceptives), for grantee patients that meet the patient definition criteria [61 Fed. Reg. 55156 (Oct. 24, 1996)]. The covered entity may purchase and dispense any 340B drugs associated with a service for which the covered entity is responsible, including contraceptives, to that patient, to the extent it aligns with patient definition and is consistent with the scope of the grant.
No. Covered entities are free to choose how they will provide 340B pharmacy services to their patients, subject to federal and state laws. Options include contracting with a retail pharmacy, providing in-house pharmacy services, administering drugs to patients, etc. For more information, including tools and technical assistance in providing 340B pharmacy services, contact Apexus Answers at 888-340-2787, or ApexusAnswers@340bpvp.com.
340B drugs may not be used for Medicaid FFS patients at a contract pharmacy, absent an arrangement between the contract pharmacy, covered entity, and state Medicaid agency to prevent duplicate discounts. Any such arrangement shall be reported to the HRSA Office of Pharmacy Affairs by the covered entity. Once HRSA reviews and approves the arrangement, HRSA posts contract pharmacies that use 340B drugs for Medicaid FFS patients on the 340B OPAIS. For additional information, see the Federal Register notice (PDF - 268 KB).
The “ship to bill to” procedure refers to an arrangement set up by the covered entity who is responsible for purchasing 340B drugs from wholesalers and/or manufacturers and directs those 340B drugs to be shipped to the contract pharmacy. In other words, the covered entity maintains title of the 340B drugs as required, but the contract pharmacy(ies) houses the drugs and provides dispensing services to patients of the covered entity.
HRSA audits of covered entities include contract pharmacy arrangements. The covered entity must have fully auditable records that demonstrate compliance with all 340B Program requirements and the entity remains responsible for ensuring their contract pharmacy arrangements meet statutory obligations to ensure against diversion or duplicate discounts. HRSA recommends that covered entities perform quarterly internal audits and annual independent audits (or more frequent as necessary) of all their utilized contract pharmacies to ensure 340B Program compliance. HRSA also recommends that covered entities maintain written policies and procedures to describe contract pharmacy oversight activities, including effective procedures for review of the patient eligibility determination system used at contract pharmacies, and reconciliation of dispensing, purchasing, and billing records to ensure that diversion and duplicate discounts have not occurred.
If the covered entity determines that drug diversion or duplicate discounts occurred or that it is otherwise unable to comply with its responsibility to reasonably ensure compliance, the covered entity can you use this Self Disclosure tool to disclose the violation to HRSA. This information should be mailed to: Health Resources and Services Administration, Office of Pharmacy Affairs, 5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857.
The Authorizing Official (AO) and Primary Contact (PC) should review the covered entity’s 340B OPAIS record to ensure the record is accurate and correct. Any inaccurate information should be corrected in advance of recertification by submitting an on-line change request.
Yes. Covered entities should not confuse change requests and recertification. Covered entity’s required to notify the 340B Program as soon as possible after the entity’s information changes to keep the record up to date. Recertification is required annually to meet the statutory requirement of keeping the entity’s record up to date and certifying compliance with the 340B Program requirements.
HRSA strongly recommends that the covered entity review and update its 340B database entry using the change request process prior to recertification. Once recertification starts, the listed Authorizing Official will receive a user name, password, and recertification user guide to perform annual recertification and attest to the covered entity’s 340B Program compliance.
The Authorizing Official is responsible for ensuring 340B Program compliance for the covered entity. Recertification covers the parent-covered entity and all registered child sites in the 340B Program database.
Medicaid and 340B
As outlined in a HRSA Policy Release (“Clarification on Use of the Medicaid Exclusion File,” No. 2014-1), the MEF does not apply to 340B drugs that are billed under Medicaid managed care organizations (MCO). While HRSA has not established policy for how to handle MCO drugs for purposes of prohibiting duplicate discounts, we are aware that some covered entities have already worked with MCOs and state partners to develop models for the prevention of duplicate discounts.
In addition, the Centers for Medicare & Medicaid Services (CMS) has developed an Information Bulletin (PDF - 171 KB) that describes best practices that states can use to avoid 340B duplicate discounts in Medicaid. HRSA encourages 340B covered entities to work with their state to develop strategies to prevent duplicate discounts on drugs reimbursed through MCOs.
The date in the “start date” column is the first date that the entity began participating in the 340B Program. The date in the “term date” column is the effective date the entity is no longer participating in the 340B Program. These dates DO NOT relate to the covered entity’s MEF determination as carve in or carve out for Medicaid fee-for-service. To download the MEF for a specific quarter, on the MEF homepage in the 340B OPAIS a quarterly date range must be selected and those dates reflect the effective dates of the selected MEF download. Please note that the MEF only applies to Medicaid fee-for-service.
A change to the 340B MEF may be requested at any time, but changes do not take effect until the 1st day of the following quarter and only if approved by OPA before the time it takes a quarterly snapshot of carve in/carve out decisions. Covered entities should time their 340B Medicaid billing practice to coincide with the first day of the quarter that reflects the new billing status. The 340B OPAIS takes a snapshot of carve in/out decisions at 12:01am ET on the 16th day of the month prior to the start of each quarter, irrespective of weekends or holidays. Covered entities are therefore encouraged to submit carve in/carve out decisions before HRSA takes its quarterly snapshot to provide sufficient time to process and approve the request. To access the current Medicaid Exclusion File, visit "Medicaid Exclusion File."
A covered entity site can remove its 340B ID from the MEF to reflect that it will carve out all state Medicaid for the quarter. A covered entity site can add its 340B ID to the MEF to reflect that it will carve in at least one state Medicaid for the quarter. A covered entity site that carves-in, may add or remove state(s) it will bill 340B drugs during the quarter. A covered entity site that carves-in, may add or remove the billing number(s) it will use to bill a specific state for 340B drugs during the quarter.
HRSA generally does not make retroactive changes to the quarterly MEF once it is published. On rare occasion, a technical system issue may warrant an immediate modification. If retroactive changes are necessary, HRSA will communicate this to the 340B Program stakeholders.
If a covered entity site (340B ID) answers “yes” to the following question in 340B OPAIS, “At this site, will the covered entity bill Medicaid fee-for-service for drugs purchased at 340B prices?” the site must also provide each Medicaid state it plans to bill, and the billing number(s) it will list on the bill to the state. This only applies to Medicaid fee-for-service. Billing number(s) may include the billing provider’s national provider identifier (NPI) only, state assigned Medicaid number only, or both the NPI and state assigned Medicaid number. This information listed for each covered entity site (340B ID) in 340B OPAIS is used to generate a quarterly Medicaid Exclusion File, which is an official data source used by stakeholders to determine which covered entity sites bill Medicaid fee-for-service for 340B drugs.
For more information, contact the 340B Prime Vendor at 1-888-340-2787 or via email at ApexusAnswers@340bpvp.com.
To carve out Medicaid, a covered entity chooses to forego the 340B discount drugs for Medicaid patients. In this arrangement, 340B drug inventory is dispensed only to non-Medicaid patients. The covered entity would not be included on HRSA’s 340B Medicaid Exclusion File.
Covered entity sites will be responsible for updating their response to the modified Medicaid billing question (At this site, will the covered entity bill Medicaid fee-for-service for drugs purchased at 340B prices?) in the 340B OPAIS by the end of their next annual recertification submission.
Covered entity sites will continue to be responsible for listing the billing number(s) used to bill 340B drugs to Medicaid fee-for-service on the HRSA Medicaid exclusion file (MEF). In addition, covered entity sites may continue to submit change requests to change their information listed on the HRSA MEF. Note that a covered entity site may request a change to its listing on the HRSA MEF at any time; however, changes only take effect the following quarter, and only if OPA receives, approves, and processes the change request before the 16th day of the month prior to the start of the quarter.
The effective date for the 340B Ceiling Price/CMP regulation (82 FR 1210, January 5, 2017) is January 1, 2019. The rule will be applied prospectively. Manufacturers that offer 340B ceiling prices as of the quarter beginning January 1, 2019 must comply with the requirements of the final regulation.
The 340B Ceiling Price and CMP Regulation replaces former "Clarification of Penny Pricing" policy release (2011-2 (November 21, 2011)) and the final guidelines in 1995 describing ceiling price calculations for new drugs (60 FR, 51488 (October 2, 1995)).
When the 340B ceiling price calculation results in an amount less than $0.01, the 340B ceiling price will be $0.01. For more information, please visit the 340B Ceiling Price and Civil Monetary Penalties final rule (82 FR 1210, January 5, 2017) (PDF - 404 KB).
Manufacturers who participate in Medicaid are required to participate in the 340B Program and provide a 340B ceiling price for all covered outpatients drugs. To view which manufacturers participate in the 340B Program, please visit the 340B OPAIS Search page. A 340B participating manufacturer must provide a 340B price on all the covered outpatient drugs that meet the definition in section 1927(k) of the Social Security Act.
Pursuant to section 340B(a)(1) of the Public Health Service Act and the 340B Ceiling Price and Civil Monetary Penalty final rule (82 FR 1210, January 5, 2017), the 340B ceiling price for a covered outpatient drug is equal to the Average Manufacturer Price (AMP) from the preceding calendar quarter for the smallest unit of measure minus the Unit Rebate Amount (URA). The 340B ceiling price is calculated using six decimal places and HRSA publishes the price rounded to two decimal places.
Pursuant to a delegation of authority, the HHS Office of the Inspector General (OIG) has the authority to impose CMPs utilizing the definitions, standards, and procedures under 42 CFR Parts 1003 and 1005, as applicable. For additional information, see the delegation of authority Federal Register Notice (82 FR 1356, January 5, 2017) (PDF - 404 KB).
HRSA requires manufacturers to refund covered entities on all drug overcharges and should work with the covered entities in good faith to make repayments. Specifically for new drugs and as outlined in the CMP final rule, manufacturers are required to calculate the actual 340B ceiling price and offer to refund or credit the covered entity the difference between the estimated 340B ceiling price and the actual 340B ceiling price within 120 days of the determination by the manufacturer that an overcharge occurred. For overcharges on other drugs, HRSA expects repayment procedures to follow similar processes that align with standard business practice and be documented in the manufacturer’s policies and procedures.
The 340B ceiling price is defined in statute (section 340B(a)(1) of the Public Health Service Act) and implementing regulations (42 CFR §10.3 and §10.10(a)). The 340B ceiling price is the maximum statutory price a manufacturer can charge a covered entity for the purchase of a covered outpatient drug and is equal to the average manufacturer price (AMP) from the preceding calendar quarter for the smallest unit of measure minus the unit rebate amount (URA). HRSA calculates the 340B ceiling price at six decimal places and then subsequently publishes the 340B ceiling price in the 340B OPAIS rounded to two decimal places.
HRSA also publishes a package adjusted price for each covered outpatient drug in the 340B OPAIS. HRSA publishes the package adjusted price as a courtesy to assist manufacturers and covered entities in evaluating the 340B ceiling price. The package adjusted price is calculated using the 340B ceiling price, the package size (PS), and the case pack size (CSP) for a covered outpatient drug, and represents the price that the covered entity actually pays for the drug.
The PS is the quantity of a unit of measure contained in one package sold by a manufacturer under a particular 11 digit NDC. The CSP is the number of salable units in the shipping container. HRSA publishes the package adjusted price in 340B OPAIS rounded to two decimal places.
The exception to this rounding convention occurs when the 340B ceiling price is less than $0.01. In these cases, the 340B ceiling price rounded to two decimal places will be multiplied by the package size and case pack size to equal the package adjusted price. This is consistent with the Final Rule.