Children's Hospitals
The Health Resources and Services Administration (HRSA) published a notice on September 1, 2009 in the Federal Register providing new guidelines for the participation of children's hospitals in the 340B Drug Pricing Program. The guidelines clarify the requirements that must be met by children's hospitals, the process for registration and the obligation of manufacturers to provide 340B priced drugs to registered children's hospitals. The notice (74 FR 45206 (Sept. 1, 2009)) implements Section 6004 of the Deficit Reduction Act (DRA) of 2005 (Pub. L. 109-171). The DRA made it possible to add qualifying children's hospitals to the list of covered entities eligible to access 340B discounted drugs. HRSA will strive to be as flexible as possible with application deadlines and will work with eligible children's hospitals to expedite registration as much as resources and program requirements permit.
Program Information
Children’s hospitals must meet the following requirements defined in the Social Security Act to participate in the Program. The hospital:
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Requirements |
Section of the Act |
| (i) |
is owned or operated by a unit of State or local government |
Section 1886(d)(1)(B)) of the SSA |
| or |
| is a public or private non-profit corporation which is formally granted governmental powers by a unit of State or local government |
| or |
| is a private non-profit hospital which has a contract with a State or local government to provide health care services to low income individuals who are not entitled to benefits under title XVIII of the Social Security Act or eligible for assistance under the State plan under the title |
| (ii) |
had a disproportionate share adjustment percentage greater than 11.75% for the most recent cost reporting period that ended before the calendar quarter involved |
Section 1886(d)(5)(F) of the SSA
|
| or
|
| is eligible under an a separate indigent care calculation, which meets specific criteria including: location in an urban area, has 100 or more beds, and can demonstrate that its net inpatient care revenues (excluding any such revenues attributable to Medicare), during the cost reporting period in which the discharges occur, for indigent care from State and local government sources and Medicaid exceed 30 percent of its total of such net inpatient care revenues during the period. |
(see below for more information)* Section 1886(d)(5)(F)(i)(II) of the SSA (Please contact PSSC for more information)
|
| (iii) |
does not obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement. |
|
| (iv) |
has a Centers for Medicare and Medicaid Services (CMS) designated 3300 series Medicare provider number. |
See below for more information** |
| (v) |
Hospitals that wish to use 340B drugs for their outpatient clinics must certify they are an integral part of the hospital. They must meet the reimbursement requirement in one of the following two ways:
a. hospitals that file Medicare cost reports must certify that the outpatient facilities are an integral part of the hospital and reimbursable on the Medicare cost report
|
|
| or |
| b. hospitals that do not file Medicare cost reports must certify that the outpatient facilities are an integral part of the hospital and meet the CMS provider-based status criteria in 42 CFR 413.65 (d) and (e). |
Provider-based criteria are outlined by CMS in 42 CFR 413.65 (d) & (e). |
| (vi) |
must certify that they will abide by all requirements of Section 340B of the Public Health Service Act (e.g. prohibition on resale of covered outpatient drugs & duplicate discounts or rebates). |
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*Children’s hospitals may satisfy the requirement of demonstrating a DSH adjustment percentage greater than 11.75 by providing one of the following to the OPA:
- An official document from the Department of Health and Human Services or a contractor that is authorized to make official determinations, showing that the hospital meets the DSH adjustment percentage requirement for the most recent cost reporting period.
- If a Medicare cost report is filed, a copy of the relevant pages of the most recently filed Medicare cost report that contains data necessary to calculate the DSH adjustment percentage.
- If a Medicare cost report is not filed with sufficient data to calculate the DSH adjustment percentage, then submit a statement from a qualified, independent auditor.
The documentation above should identify the actual percentage value, a concise description of any mathematical calculations, and the quarter for which the determination was made. OPA will make a determination on eligibility based on a review of the information submitted.
**Hospitals that do not have a 3300 series Medicare provider number should contact CMS to obtain a 3300 series Medicare provider number. Please note for-profit hospitals are ineligible.
Annual Recertification
- The Office of Pharmacy Affairs (OPA) will provide additional guidance on annual recertification. Children’s Hospitals should immediately notify OPA of any change in their eligibility into the 340B Program.
Retroactive Discounts
- Retroactive Discounts may apply to drugs purchased on or after February 8, 2006 when the DRA was enacted. Children’s Hospitals must meet the requirements outlined in the Federal Register Notice before contacting manufacturers for the discounts.
Application Forms
Please complete the following to register for participation in the 340B Drug Pricing Program:
Quarterly Deadlines
The quarterly deadlines for application submission to OPA are a month before the start date in the 340B Program. The deadlines are December 1, March 1, June 1 and September 1.
Program Resources
Pharmacy Services Support Center - provides education, policy analysis, and technical assistance for 340B stakeholders. PSSC Website; Phone: 1-800-628-6297
Prime Vendor Program - provides access to sub-340B prices on outpatient covered drugs and additional discounts on vaccines, pharmacy technologies, and related supplies. Online enrollment available at 340B Prime Vendor Website  ; Phone: 1-888-340-2787
Additional Information
Frequently Asked Questions (FAQ): This is another resource available to Children's Hospitals to obtain answers on frequently asked questions about enrollment and participation in the 340B Program.
Educational Module: OPA has made available through its Pharmacy Services Support Center, an Educational Module that gives an overview of the final guidelines of the Federal Register Notice on Children’s Hospitals and the enrollment criteria.
Reference sheet-one pager: The one-pager is a quick and easy reference sheet that provides the basics on the eligibility criteria and enrollment information.
For more information or if you have any questions about Children’s Hospitals, please call the
Pharmacy Services Support Center (PSSC) at 1-800-628-6297.
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