When Does 340B Eligibility Begin for FQHCs?

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When Does 340B Eligibility Begin for FQHCs?

As the second largest covered entity (CE) type after hospitals, Federally Qualified Health Center (FQHC) specific 340B information and application can often lag behind. Within the last few years, Apexus begun offering 340B University OnDemand  for FQHCs, as well as periodically offering 340B University Live for FQHCs only, in conjunction National Association Community Health Center (NACHC) conferences. NACHC too provides some great resources on the program including the NACHC 340B Manual for Health Centers (2nd Edition, March 2018) and Noddlepod – Pharmacy Access for Health Centers a listserv based “peer group for sharing information and resources related to 340B and other pharmacy issues impacting health centers and their patients.” All FQHCs are welcome to join Noddlepod, even if you are not a member of NACHC and it is a great place to learn from peers. You will even see me periodically posting content there!

If you are a member of the Health Center 340B community, you may or not have noticed the flurry of communications and excitement last month as HRSA’s Office of Pharmacy Affairs (OPA) and Apexus released a variety of Frequently Asked Questions (FAQ) relating to when 340B eligibility begins for new services and offsite locations of hospital Covered Entities. The FAQs clarified that so long as policies and procedures support the practice and patient eligibility requirements are met, hospitals may consider the new service or location 340B eligible prior to its registration becoming active on the Office of Pharmacy Affairs Information System (OPAIS). Prior to this clarification hospitals could experience 340B eligibility delays of up to twenty-two months before becoming active on OPAIS. This is because hospital child site registrations cannot occur until the service is listed on a filed Medicare Cost Report (MCR).

Since the Electronic Handbook (EHB) is updated in real-time, the registration delays experienced by FQHCs are significantly shorter, but can stretch to up to eight and a half months in a worst-case scenario. The time between opening a clinic location, and it becoming active on OPAIS can result in significant 340B savings opportunity loss. While HRSA periodically offers the opportunity to register outside of the first 15 days of each quarter (as they are now related to the COVID-19 state of emergency), there can still be a two month delay before the associated site becomes active on OPAIS.

Having said all of this, FQHCs should not feel excluded from the recent attention shed in this area by OPA and Apexus. The nature of FAQs is that they raise a specific question to be answered which has applicability beyond the exact scenario raised to other similar situations. FQHCs and hospital covered entity types are similar in the eyes of HRSA, in that the covered entity is inclusive of all of the eligible locations that make up the organization. Outside of FQHC-Lookalikes, this is not the case for the other types of 340B eligible Federal grantees, where HRSA considers each 340B registration to be a separate and distinct covered entity.

Because of the aggregate covered entity registration models used for both hospitals parent and child sites and FQHCs (associated sites), logic would suggest that the newly published FAQs (included for reference below) would also be applicable to health centers registered as covered entities. To validate this reasoning, we reached out to Apexus and posed this question:

Turnkey Question: For hospitals, FAQ 4301 makes it clear that 340B eligibility may begin prior to OPAIS registration, can we also conclude that this logic applies to the FQHC associated sites? That once they are active on the EHB, they would be able to consider patients 340B eligible, so long as patient definition is met, and then register the location on OPAIS in the next registration window?

Needless to say, we were very appreciative and excited for the impact this would have for our FQHC clients when Apexus confirmed our logic answering:

Apexus Answer:  Yes, the patients could be eligible. As stated in the FAQ, the covered entity should evaluate whether the patients of the new site would be considered eligible patients with the patient definition and defined in your policies and procedures.

Knowing that with the right supporting policies, procedures, and processes are in place, OPA permits 340B utilization to begin prior to an associated site becoming active on OPAIS, you are likely wondering what policy language would look like. Policy and procedure must outline this new consideration and how auditable records must be maintained. When updating your policy, be sure to address necessary changes to definitions, as well as procedures for determining eligibility and enrollment.

Turnkey has drafted potential policy language to address the clarification made by the HRSA and Apexus FAQs:

340B Eligible Location:  A clinic location that is an integral part of a 340B federally qualified health center (FQHC) covered entity, is within scope of the grant and actively listed on the EHB. Both associated sites actively registered on  the OPAIS and new locations that are not yet actively registered as associated sites on OPAIS but are within Covered Entity’s scope of grant and actively listed on the EHB, are 340B Eligible Locations where 340B drugs can be purchased and/or used. 340B Eligible Locations shall be registered as associated sites on OPAIS during the OPA registration window which follows the site becoming active on the EHB.

Associated Site Participation: New associated site approval: CE ensures that each new associated site (i.e. new service delivery site) is assessed/approved internally before beginning participation in the 340B Program:

  • FQHC’s 340B Oversight Committee evaluates a new service delivery site of CE to determine if the location is eligible for participation in the 340B Program as an associated site of CE. 
  • The 340B Oversight Committee validates that the new service delivery site is added to the Electronic Handbook (EHB) prior to being enrolled as a new associated site of “FQHC” on the OPAIS.
  • At the 340B Oversight Committee’s recommendation, the Authorizing Official documents his/her approval of the new associated site’s participation in the 340B Drug Pricing Program in writing to the 340B Oversight Committee, including to CE’s accountable 340B staff member.

New Associated Site Participation: The 340B Oversight Committee validates that each new associated site approved by CE is enrolled and listed on the EHB before participating in the 340B Drug Purchasing Program.

New Associated Site Enrollment/Registration:

  • The Authorizing Official enrolls each new associated site approved by CE on the HRSA/OPA 340B database during the next available online OPA registration period.
  • The 340B Oversight Committee validates that each new associated site participating in the 340B Program is registered as associated sites on OPAIS during the OPA registration window which follows the site becoming active on the EHB.
  • For example, if a new associated site is enrolled/registered on January 1-15, 2021, the next available active OPAIS listing date is April 1, 2021. 

It is important to note that information regarding 340B eligibility is not a new policy from OPA but is instead a clarification of existing policy.

Turnkey’s Suggested New Associated Site 340B Eligibility Determination Process

Here are the newly approved FAQs:

Unpublished FAQ 1318 (5/29/20) Question:  Hospitals that have only ‘costs’ associated with that cost center/dept have been rejected from 340B registration because they had to wait for revenue to be on the MCR for that cost center/dept. Does worksheet A (and/or C) have to show costs, revenue, or both? For example, a clinic might just be opened and have costs, but has not seen patients (no revenue on cost report). Would such a clinic be eligible?
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Unpublished FAQ 1648 (5/29/20) Question: Our hospital subject to the GPO Prohibition moved a clinic outside the four walls but didn’t register it on the 340B OPAIS. It is not on the most recently filed cost report at that location but will be on our next cost report as a reimbursable clinic. Will OPA consider the site “continuously eligible?”
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Published FAQ ID: 4301 (06/04/2020) Question: Are hospital covered entities able to register offsite, outpatient facilities before being listed as reimbursable on their Medicare Cost Report?
Answer: In order to register for the 340B Program and be listed on the 340B Office of Pharmacy Affairs Information System (340B OPAIS), HRSA must first verify that the offsite, outpatient facility is listed as reimbursable on the hospital’s most recently filed Medicare cost report and has associated outpatient costs and charges as outlined in HRSA’s 1994 Outpatient Hospital Facilities GuidelinesHRSA notes that for hospitals who are unable to register their outpatient facilities because they are not yet on the most recently filed Medicare Cost Report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility. These situations should be clearly documented in the covered entity’s policies and procedures. In addition, a covered entity is responsible for demonstrating compliance with all 340B Program requirements and ensure that auditable records are maintained for each patient dispensed a 340B drug.

Published FAQ ID: 1193 (06/02/2020) Question: May an outpatient facility that is reimbursed by CMS as a provider-based facility, but not included on the most recently filed Medicare cost report, participate in the 340B Program?
Answer: A facility must be both reimbursable and included in the hospital’s most recently filed Medicare cost report with associated outpatient costs and charges to access the 340B Program and register in 340B OPAIS. HRSA’s outpatient facility guidelines can be found at in HRSA’s 1994 Outpatient Hospital Facilities Guidelines.

Please don’t hesitate to reach out if you have specific questions on this new development.


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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