Proposed Definition of a Patient

340B Drug Pricing Program

Marc Levy, Healthcare Consulting Senior Manager
September 2015

The Health Resources and Services Administration (HRSA) recently released proposed guidance relative to the 340B outpatient drug discount pricing program. The purpose of this guidance was, among other topics, to provide further guidance for both drug manufacturers and covered entities regarding who is eligible to participate, audits and an expanded definition of what is considered to be a patient for 340B drug discount purposes.

The current guidance as to what is considered a patient of the covered entity, was issued in 1996 and required that all of the following criteria be met in order to be considered a patient of the covered entity:

  1. The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual’s health care;
  2. The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and
  3. The individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-qualified health center look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement.

HRSA is proposing to expand the criteria that in order to be considered a patient of the covered entity, the patient must meet ALL of the following criteria:

  1. The individual receives a health care service at a facility or clinic site which is registered for the 340B Program and listed on the public 340B database.
  2. The individual receives a health care service provided by a covered entity provider who is either employed by the covered entity or who is an independent contractor for the covered entity, such that the covered entity may bill for services on behalf of the provider.
  3. An individual receives a drug that is ordered or prescribed by the covered entity provider as a result of the service described in (2).
  4. The individual’s health care is consistent with scope of the Federal grant, project, designation, or contract.
  5. The individual’s drug is ordered or prescribed pursuant to a health care service that is classified as outpatient.
  6. The individual’s patient records are accessible to the covered entity and demonstrate that the covered entity is responsible for care.

In the proposed guidance, HRSA gives detailed explanations of each of these criteria. In addition, HRSA makes it clear that covered entities must be able to prove that each of the above criteria has been met for each individual patient should that covered entity be audited and a detail patient listing or sample is requested.

We recommend that covered entities review their current records to ensure that they meet the new definition and criteria of being a patient covered by the 340b drug pricing program. An internal or external audit of your records would allow the covered entity to determine any vulnerabilities or deficiencies and address them before these rules are implemented and the audits begin.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.