August 14, 2013—Rural and cancer hospitals will get their first hands-on experience complying with the new 340B orphan drug exclusion regulation beginning next Monday, the start of the four-week period during which they and all other 340B hospitals must recertify their eligibility for the drug discount program.[ms-protect-content id=”2799″]
The second annual recertification of 340B hospitals gets underway on Aug. 19. Hospitals will have until Sept. 13 to affirm that they and all of their outpatient sites are properly listed in the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs’ (OPA) 340B database and that they obey all 340B program requirements. Those that fail to recertify will be removed from the program effective the first day of the next quarter, which in this case is Oct. 1.
Oct. 1 also happens to be the effective date of HRSA’s 340B orphan drug exclusion final rule. It will forbid rural and cancer hospitals from buying orphan drugs through the 340B program only when they use such drugs for the indications for which the drugs received an orphan designation. Disproportionate share (DSH) and children’s hospitals are not subject to the exclusion.
While rural hospitals (critical access hospitals, sole community hospitals, and rural referral centers) are not bound by the 340B statute’s separate prohibition on buying drugs through group purchasing organizations (GPOs), the prohibition does apply to cancer hospitals. HRSA, however, has determined that when a cancer hospital dispenses or administers an orphan drug for the indication for which it received its orphan designation, it is no longer a “covered outpatient drug” for 340B purposes.
Upon enrolling in 340B and/or during annual recertification, HRSA is requiring the hospitals to pick between two options:
- They will buy their orphan drugs through 340B and keep auditable records to demonstrate their compliance with the orphan drug exclusion; or
- If they cannot or do not wish to keep such records, they will buy their orphan drugs outside of 340B regardless of the indication for which the drug is used (and, for cancer hospitals, they will not use a GPO to buy those drugs).
Hospitals can change their 340B “opt-in/opt-out” status for orphan drugs on a quarterly basis by notifying HRSA.
Even though the orphan drug regulation is not legally binding until Oct. 1, HRSA is requiring affected hospitals to comply with its recertification provisions as if it were already in place.
This Friday, Aug. 16, HRSA is sending all 340B hospitals’ 340B authorizing officials and primary contacts an email alert that on Monday the 19th the authorizing official will be getting a second email containing the user name and password they need to complete the recertification process online.
HRSA has asked groups representing 340B hospitals to advise their members to:
- Update the hospital authorizing official’s email spam filter to allow emails from 340b.recertification@hrsa.gov.
- Make a printout of the 340B recertification user’s manual.
- For hospital types that require a designated minimum Medicare disproportionate share adjustment percentage to be eligible for 340B, have a copy of the hospital’s latest filed Medicare cost report Worksheet E, Part A.
- Remember that the authorizing official alone is responsible for completing the recertification process.
- Contact 340B Prime Vendor Program at ApexusAnswers@340bpvp.com or 1-888-340-2787 if they have questions and, when doing so, make sure to have the hospital’s 340B ID number.[/ms-protect-content]