340B hospitals can register certain outpatient locations with the Health Resources & Services Administration (HRSA) as 340B child sites, which allows them to use 340B drugs. HRSA recently announced some changes to how it had been determining this eligibility during the COVID-19 public health emergency. How have these changes affected 340B hospitals, particularly those that had planned new child sites under the previous policy? For the answers to this question and more, we spoke to Chuck Stubbs, a 340B pharmacist with Intermountain Health based in Salt Lake City. 

How new hospital child sites gain 340B eligibility

Chuck explains that 340B child sites are outpatient departments that are not on the main hospital campus but are fully integrated with the hospital parent site. To start using 340B drugs at a new child site, the location must appear on a filed Medicare cost report with associated costs and charges and then be registered with the HRSA Office of Pharmacy Affairs Information System (OPAIS).

What changed during the pandemic

Prior to the COVID-19 pandemic, the process to start using 340B drugs at a new child site could involve up to nearly two years. Chuck notes that during the pandemic, HRSA indicated that child sites that had not yet been registered could begin using 340B drugs right away if they were for eligible patients. Hospitals believed that shift in policy would be permanent.

Where things stand now

The COVID-era child site eligibility changes did not last. In October 2023, HRSA ended what it called a temporary flexibility, citing the termination of the public health emergency in May 2023. Although HRSA granted a grace period for hospitals to come into compliance, that did not provide protections for planned child sites that had not yet been using 340B drugs. Chuck explains how this affected one of Intermountain’s planned sites, and he shares advice for hospitals that are in similar situations.

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Resources:

1. HRSA Announces Policy Restricting Use of 340B at New Child Sites After Transition Period