July 3, 2013  

Covered entities that are currently enrolled or will soon enroll as a disproportionate share hospital, sole community hospital, critical access hospital, children's hospital or rural referral hospital ("340B Hospital") must have a written contract in place with a state or local government to provide healthcare services to low-income individuals who are not entitled to benefits under Title XVIII of the Social Security Act (Medicare) or eligible for assistance under the State plan of Title XIX under the Act (Medicaid). This contract must contain very specific language as required by the Office of Pharmacy Affairs (OPA). The contract must be valid and enforceable at all times during the 340B hospital's participation in the 340B program. The 340B hospital's participation in Medicare, Medicaid or the general provision of charity care does not satisfy this 340B eligibility requirement.

Failure to comply with all of the eligibility requirements stated in the Act could expose the hospital to fines, sanctions, or possibly program exclusion. Covered entities that applied to become 340B providers prior to 2012 should call us to confirm they meet this important requirement. Murer Consultants can assist you in drafting the document and include the appropriate language to meet this eligibility requirement.

Another extremely important 340B program topic is the rapidly approaching date for compliance with the OPA's recent Group Purchasing Organization (GPO) Prohibition Policy Statement. On February 7, 2013, the OPA released a statement reconfirming that disproportionate share hospitals, children's hospitals, and freestanding cancer hospitals should not utilize a GPO for any out-patient drugs covered by the 340B program, including carved out Medicaid drugs. The OPA also clarified that original purchases under a virtual inventory system should be ordered from a non-GPO account, such as a wholesale acquisition cost (WAC) account. The OPA learned that many 340B covered entities were non-complaint with this requirement and provided an interim delay in enforcement to provide time to reach compliance. This grace period ends on August 7, 2013, and it will not be extended. Failure to comply with this change could result in the termination of the 340B program.

The professionals at Murer Consultants have extensive experience in all facets of the 340B program. Murer Consultants assists 340B covered entities with OPA audit preparation, including policy review, mock audits, and staff education.   If you would like more information on this subject, please contact Murer Consultants by phone at (815) 727-3355 or by email at mmurer@murer.com.

We would be happy to assist you with any of our broad consulting services or whenever you have any questions, comments or concerns.