Outpatient Prescriptions from Covered Entity Internal Hospitals With & Without Child Site Registrations

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Outpatient Prescriptions from Covered Entity Internal Hospitals With & Without Child Site Registrations

Happy Summer Everyone, as we are just wrapping up the July OPAIS registration period and the 340B hospitals are ramping up for recertification, it seemed a great time to talk about hospital child site registration or the lack there of and how this impacts 340B prescription eligibility. This blog is intended to build on Rich Bucher’s article from last month. During the last year, I have encountered a number of hospitals with OPAIS database listings which include a historic registration of “child site hospitals” as well as individual registrations for each of the departments within the child site hospital. During discussions onsite, the 340B teams are often leery of removing these registrations as they still intend to capture 340B discharge prescriptions from the “child site hospital”

Apexus FAQ ID: 1295, last modified: 03/12/2019 addresses the question of child site registrations:

Question: How should a hospital covered entity determine if an off-site outpatient facility is eligible for 340B as a child site and should be added to 340B OPAIS?

Answer: Off-site outpatient facilities are eligible child sites of a 340B hospital in the following circumstances:

1. 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 was released in the 1994 in the following link.

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 HRSA.

2. 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.

As stated above, for a location to be registered as a child site, it must be 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.  This raises the question about what to do with areas of the hospital which are outside of the four-walls with inpatient-only revenue and expenses. These areas are inpatient only, are present on the cost report and are integral parts of the registered covered entity hospital. An example of this would be an inpatient psychiatric care unit, in its own building separate from the main hospital (parent site) which only has inpatient revenue and expense. Based on the FAQ 1295 above there is no way to register these facilities on OPAIS since the required outpatient revenue and expense are not present on the cost report.

To address this concern OPA recently released a FAQ through Apexus to address this question, FAQ 2693, last modified: 05/21/2019.

Question:  Can a covered entity use 340B for discharge prescriptions from a child site hospital that does not have outpatient clinics to register?

Answer:  Discharge prescriptions are allowed as long as the prescription originated from a location that is considered an integral part of the covered entity and has reimbursable costs and charges on the covered entity’s Medicare Cost Report.

While FAQ clarifies that discharge prescriptions from hospital locations that do not have outpatient clinics registered are in fact 340B eligible, the use of the term child site hospital may still lead to a little confusion about the need for “child site hospital” registration. It may be more clear to consider FAQ 2693 in light of the example given at the end of FAQ 1295 where it refers to “off-site outpatient facility is a hospital”   In the example it states that all clinics/departments within that off-site location that plan to purchase and-or provide 340B drugs to its outpatients must register on OPAIS but in this case since there are no outpatient clinics there is nothing to register.

Have I confused you yet? I am hoping not but I have been mulling this conundrum over since FAQ 2693 was published since per FAQ 1295 covered entities are only to register outpatient facilities, present on the MCR with outpatient revenue and expense, hence there really are no child site hospitals but only off-site outpatient facilities which are hospital with child site departments and clinics.

Because of the potentially conflicting wording of these two FAQ’s, Turnkey reached out to the team at Apexus for confirmation of HRSA/OPA’s intended meaning for FAQ 2693. Apexus confirmed that covered entities are only to register departments with outpatient revenue and expense on OPAIS and that while  they do not register off-site inpatient facilities, they are still 340B eligible so long as they have revenue and expense, are an integral part of the parent hospital, and fall on the CE’s most recently filed MCR.

With all of this in mind, I encourage you to look for historic registrations of “child site hospital” which are not for departments or clinics present on the Medicare Cost Report with  outpatient revenue and expenses and terminate them from your covered entities 340B child site registrations in the upcoming annual recertification period. Leaving historic registration like this on the OPAIS data based could result in the potential for inaccurate OPAIS data base finding or areas for improvement during a HRSA audit.

I would suggest you read FAQ 2693 this way: Question: Can a covered entity use 340B for discharge prescriptions from an off-site inpatient facility that does not have outpatient clinics to register? Answer: Discharge prescriptions are allowed as long as the prescription originated from a location that is considered an integral part of the covered entity and has reimbursable costs and charges on the covered entity’s Medicare Cost Report. Before unregistering any sites, always verify that there will never be outpatient charges before unenrolling.

If you would like further clarification on this topic, do not hesitate to reach out to us for more information.


About Author

Felicity Homsted, PharmD, MBA

Lead pharmacist auditor, provides support for onsite audits. Felicity served as Chief Pharmacy Officer at a Federally Qualified Health Center from 2012-2018, responsible for four retail pharmacies, integrated clinical pharmacy services, three pharmacy residency programs and 340B program management. Felicity was also Chief Pharmacy Officer for Community Care Partnership of Maine, an accountable care organization comprised of 11 different health systems, where she supported pharmacy operations and 340B compliance for all member organizations. Felicity represented her entity as a HRSA 340B leading practice peer to peer site during 2013 to 2015. Felicity served as a subject matter expert for the Apexus 340B Prime Vendor program, speaking as faculty at 340B University on contract and in-house pharmacy operations, authoring the contract pharmacy modules for the 340B ACE Operations Certificate. She has presented on 340B program operations and compliance at 340B Coalition, National Association of Community Health Centers, and American Pharmacy Association meetings.

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