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  4. How Hospitals Register for the 340B Program

How Hospitals Register for the 340B Program

To participate in the 340B Program, eligible hospitals must first register in the 340B Office of Pharmacy Affairs Information System (OPAIS). Do this during one of the quarterly registration periods.

Have these documents with you when you register your hospital:

  • Hospital’s latest filed Medicare cost report
  • Worksheet E Part A (line 33)
  • Worksheet S-3 (for children’s hospitals)

What Are the Different Hospital Types in the 340B Program?

DSH Requirement: > 11.75%

  • Disproportionate share hospital (DSH)
  • Free-standing cancer hospital (CAN)
  • Children’s Hospital (PEDS)
    If the children’s hospital doesn’t file a Medicare cost report, your hospital needs an independent audit showing a disproportionate share adjustment percentage that meets the requirement. Review the Guidelines for Children's Hospitals (PDF - 155 KB).

DSH Requirement: ≥ 8%

  • Sole Community Hospital (SCH)
  • Rural Referral Center (RRC)

Which Hospital Classifications Are Eligible for the 340B Program? 

340B(L)(i) of the Public Health Service Act (PDF - 39 KB) defines the hospital classifications that are eligible for the 340B Program.

Your hospital must meet one of these classifications. Please know which classification your hospital will choose during the registration process and have the supporting documents with you.

Owned or operated by a unit of state or local government

Provide an official document that shows that a state or local government owns or operates your hospital.

Examples:

  • Copy of the law that created the hospital
  • Documentation from the state or local government
  • Hospital’s charter or bylaws
  • IRS documents that describe the hospital

Whichever document your hospital submits must clearly state the hospital’s name, its ownership, and the established date of ownership.

Note: Your hospital may need to include more than one document to show eligibility.

Private non-profit which has a contract with a unit of state or local government

Include a copy of the following:

  • Nonprofit status: document that shows the hospital is a private non-profit. Examples:
    • Hospital’s charter
    • Articles of incorporation, bylaws, or other documents
    • Hospital’s latest filed IRS-990 form, or other official IRS document
    Note: Your hospital may need to provide more than one document show eligibility.
  • Contract: copy of the contract that is in place between the hospital and the state or local government unit.

    The contract must provide for health care services to low income individuals who aren’t entitled to benefits under Title XVIII of the Social Security Act or eligible for assistance under the state plan under this title.

    In addition, the contract should include:

    1. Names of the hospital and the government agency
    2. Signatures of hospital and government agency representatives
    3. Dates clearly showing effective dates of the contract

Public or private non-profit corporation which a unit of state or local government formally grants governmental powers

Examples of documents for public corporations:

  • Copy of the law that created the hospital
  • State or local government document that clearly shows ownership
  • Hospital’s charter or bylaws
  • IRS document describing the hospital

Examples of documents for private non-profit corporations:

  • Hospital’s charter
  • Articles of incorporation, bylaws, or other documents from the state
  • A copy of the 501(c)(3) certification
  • Latest filed IRS-990 Form, or other official IRS document

Whichever document your hospital submits must clearly state the hospital’s name, its ownership, and the established date of ownership.

Note: Your hospital may need to include more than one document to show eligibility.

Your hospital must also have documents in place that grants governmental powers. In other words, a state or local government must formally delegate a power to the hospital usually exercised by the state or local government.

This may happen one of these ways:

  • State or local statute or regulation
  • A contract with a state/local government
  • Creation of a public corporation
  • Development of a hospital authority or district to provide healthcare to a community on behalf of the government

Examples of governmental powers may include the power to tax, issue government bonds, or act on the government’s behalf.

Without one of these, powers generally granted to private people or corporations upon meeting of licensure requirements, such as a license to practice medicine or provide healthcare services commercially, do not by themselves constitute governmental powers.

Your hospital must submit documents that contain all of the following:

  • Identity of the government entity granting the governmental powers
  • Description of the governmental power granted to the hospital and a brief explanation as to why you consider the power governmental
  • A copy of any official documents the government issued to the hospital that reflect the formal grant of governmental power

The unit of state or local government must grant governmental powers to your hospital before your hospital registers in the 340B Program.

How Often Does My Hospital Submit These Documents?

We may ask for your hospital's documents again when your hospital recertifies each year or as part of your hospital's 340B Program auditable records.

What Are the Registration Requirements for Parent Hospitals?

If your hospital is registering for the first time, have your hospital's latest filed Medicare care cost report with you to confirm that the data your hospital received from the Centers for Medicare and Medicaid Services (CMS) is current and complete.

The 340B Program uses the CMS Hospital Cost Report Information System (HCRIS) data to verify eligibility. Your hospital will need all of the following:

  • Signed and digitally stamped Worksheet S
  • Worksheet S-2
  • Worksheet E Part A

What Are the Registration Requirements for Hospital Off-site Outpatient Facilities (Child Sites)?

If and then
your hospital has clinics and services located off-site from the parent hospital your hospital plans to use or buy 340B drugs for your patients your hospital must register in the 340B OPAIS

We will verify eligibility of off-site outpatient facilities using your hospital’s most recently filed Medicare cost report, as outlined in the 1994 Outpatient Hospital Facilities Federal Register Notice. Your hospital must list its off-site facilities as reimbursable on your hospital’s most recently filed Medicare cost report, with associated outpatient costs and charges.

If your hospital registers off-site outpatient facilities, your hospital must enter several figures from Worksheet A and Worksheet C from the latest filed Medicare cost report and the associated trial balance. These include:

  • Total costs from the cost center/line associated with the off-site outpatient facility your hospital registered (Worksheet A, column 7);
  • Outpatient charges associated with the cost center/line your hospital registered (Worksheet C, column 7); and

If the costs and charges from more than one clinic, service, facility, or location roll up to a single cost center, your hospital will need the specific and unique costs and charges for each child site registered from the hospital’s working trial balance. For cost centers/lines that reflect only a single outpatient clinic, service, or facility, these figures will come directly from Worksheet A, Column 7 and Worksheet C column 7.

We work closely with CMS to ensure that the most recent cost report and provider enrollment data are available for 340B Program registration.

We verify your hospital's information on net costs and outpatient charges with CMS data. If the data your hospital entered during registration doesn’t match the latest CMS data, your hospital will receive an alert to upload documentation into the registration.

If your hospital's documentation isn’t uploaded with the registration, we won’t review your hospital's registration and we’ll reject it.

We’ll contact your hospital if we need to clarify anything to complete the registration review. We reserve the right to ask your hospital for more information to fully verify eligibility.

How To Upload Documents?

We’ll alert your hospital when your hospital needs to upload documentation.

You can find help on these pages:

You can also learn more about the uploading process on our 340B Office of Pharmacy Affairs Information System webpage.

When To Provide Medicaid Information?

If your hospital plans to bill Medicaid for 340B drugs for Medicaid patients, your hospital will need to provide the Medicaid billing number or National Provider Identifier and associated state.

We’ll enter these numbers in the Medicaid Exclusion File (MEF) and post each quarter on the 340B OPAIS. The MEF is the official data source to prevent duplicate discounts. Refer to December 2014 Policy Release No. 2014-01, “Clarification on Use of the Medicaid Exclusion File” (PDF - 60 KB) for additional information.

How To Change Hospital Entity Types?

There are six hospital types eligible to participate in the 340B Program:

  • Disproportionate Share Hospitals (DSH)
  • Sole Community Hospitals (SCH)
  • Rural Referral Centers (RRC)
  • Critical Access Hospitals (CAH)
  • Children’s Hospitals (PEDS)
  • Free-Standing Cancer Hospitals (CAN)

Your hospital must choose one type to participate in the 340B Program and comply with the requirements. Your hospital must meet the definition of your chosen hospital type when you register your hospital. It‘s your hospital's responsibility to understand what the different hospital types don’t allow. Section 340B(a)(4)(L-O) of the Public Health Service Act (PDF - 39 KB) describes hospital types.

If your hospital wants to change hospital types, contact the 340B Prime Vendor Program for technical assistance immediately. If your hospital acts before any of the program requirements change, your hospital may be able to change the hospital type. When changing your hospital entity type, your hospital must re-register your main hospital, all child sites, and contract pharmacies for us to verify eligibility.

The regular quarterly registration periods apply and hospitals must remain 340B eligible during the transition from one hospital type to another. Your hospital can participate in the 340B Program only after we have approved your hospital's qualifications.

What Are Some Prohibitions for Hospitals in the Program?

Group Purchasing Organization (GPO) prohibition:

  • DSH
  • CAN
  • PEDS

Orphan Drug prohibition:

  • CAN
  • RRC
  • SCH
  • CAH

For more information about the GPO and orphan drug prohibitions, visit:

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