Is your organization compliant with 340B drug pricing program requirements?

Many safety-net healthcare organizations rely on savings generated from participation in the 340B Drug Pricing Program (340B program) to stretch scarce federal funding and resources, reach more eligible patients, and provide more comprehensive services to their communities.

While the 340B program comes with many benefits, it also has significant regulatory and compliance requirements. Failure to meet these requirements can result in repayment to manufacturers and possible termination from the 340B program.

Background

Congress expanded the Medicaid drug rebate program to safety-net providers in 1992 to provide relief from high drug costs afforded through Medicaid rebate regulations. These regulations were an enactment of Section 340B of the Public Health Service Act, created under Section 602 of the Veterans Healthcare Act of 1992.

Manufacturers enter into pharmaceutical pricing agreements (PPA) with the U.S. Secretary of Health and Human Services. Rather than a rebate, manufacturers agree to provide a front-end discount on covered outpatient drugs purchased by participating healthcare providers, known as covered entities (CE), under the 340B program.

The Health Resources Services Administration (HRSA) is responsible for 340B program oversight, and the Office of Pharmacy Affairs (OPA) operates as the administrator of the 340B Program under HRSA. The Centers for Medicare and Medicaid (CMS) has authority over the billing requirements of 340B program-covered drugs.

Participation in the 340B program

Not-for-profit healthcare organizations that have specified federal designations or receive funding from specified federal programs are eligible to participate in the 340B program.

A qualifying safety-net provider can apply to participate in the 340B program as a CE through the HRSA–OPA website. Qualifying entities include, but aren’t limited to, Federally Qualified Health Centers, Critical Access Hospitals, Title X Family Planning Clinics, and Rural Referral Centers.

Once a CE is approved to participate in the program, it must meet myriad compliance requirements to maintain eligibility. These include the following:

• Performing an annual recertification
• Maintaining up-to-date and accurate records in the in the Office of Pharmacy Affairs Information System (OPAIS)
• Preventing diversion to ineligible patients