UPDATED on 3/22/2022
In a move welcomed by the growing number of hospitals forced out of the 340B Program due to falling disproportionate share hospital (DSH) adjustment percentages, Congress has passed a measure offering a chance to rejoin. Tucked away in the 2022 Consolidated Appropriations Act signed into law March 15, 2022, the bill provides a temporary re-enrollment path for hospitals that lost their 340B eligibility during the COVID-19 pandemic due to falling below the minimum DSH threshold required by the 340B statute (11.75% for DSH, free-standing cancer (CAN), and children’s (PEDS) hospitals, 8% for sole community (SCH) and rural referral center (RRC) hospitals).
While the parameters of the relief are not yet fully defined, here’s what we know so far:
- To qualify for temporary 340B Program re-enrollment, the hospital must:
- Meet all 340B Program eligibility requirements other than the minimum DSH adjustment percentage threshold
- Have been an active and registered 340B Covered Entity at least one day before the Public Health Emergency began
- Have lost 340B eligibility due to its DSH adjustment percentage falling below the required threshold during a Medicare cost reporting period that began in 2020 or a subsequent year but that does not end after Dec. 31, 2022
- Eligible hospitals must file “an attestation that contains information on any actions taken by or other impact on such hospital in response to or as a result of the COVID-19 public health emergency that may have impacted the ability to meet the applicable requirement for the disproportionate share adjustment percentage”
- For hospitals that previously lost 340B eligibility during the pandemic, attestations must be filed within 30 days of the bill’s March 15, 2022 enactment date
- For hospitals that lose their 340B eligibility after March 15, 2022, attestations must be filed within 30 days of the date eligibility was lost
- The Health Resources and Services Administration (HRSA) has begun contacting Covered Entities terminated during the pandemic and providing them with a formal attestation form to complete. Covered Entities must, among other items, submit a narrative explaining how the Covered Entity’s COVID-19 response led to its DSH adjustment percentage dropping below minimum eligibility thresholds
- If approved, HRSA will reinstate all registrations (including child sites and contract pharmacies) that were active at the time of the Covered Entity’s termination. 340B eligibility would extend through the hospital’s cost reporting period (but would extend no later than December 31, 2022). It is unclear at this stage if a hospital will have to file multiple attestations if its DSH adjustment percentage fell or will fall below the minimum threshold for multiple cost reporting periods in the defined timeframe
- If approved, 340B eligibility would only begin on the date of the bill’s enactment and would not apply retroactively
Quarles & Brady will continue to update this post as more information and guidance is released.
If your hospital recently lost 340B eligibility and is interested in filing an attestation for re-enrollment, please contact your Quarles & Brady attorney or:
- Michael French: (312) 715-5261 / michael.french@quarles.com
- Brenda M. Maloney Shafer: (602) 229-5774 / brenda.shafer@quarles.com
- Richard B. Davis: (414) 277-5844 / richard.davis@quarles.com