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Association Urges HRSA to Clarify 340B Eligibility for Offsite Locations

In a letter to the Health Resources and Services Administration (HRSA), America’s Essential Hospitals urged the agency to clarify that 340B Drug Pricing Program hospitals may continue using 340B discounted drugs for patients at offsite outpatient locations before those sites appear on the hospital’s most recently filed cost report.

The May 11 letter expressed concern with reports that HRSA will reverse its June 2020 policy allowing hospitals to administer 340B drugs to eligible patients in offsite outpatient locations of the hospital that have not yet appeared on a filed Medicare cost report. The June 2020 guidance, issued through FAQs on HRSA’s COVID-19 resource page, noted that hospitals could begin to use 340B drugs for eligible patients of offsite outpatient locations before the location appeared on a filed hospital cost report. A hospital would still register the offsite location with HRSA once it appeared on the most recently filed cost report but would not have to wait to begin dispensing and administering drugs to patients seen at the offsite location. Due to the time lag in filing a cost report and registering an offsite location, the reversal of this policy will delay availability of 340B drugs for eligible patients of offsite locations.

HRSA since has removed its COVID-19 resource page, which included the guidance in question, due to the May 11 COVID-19 public health emergency (PHE) expiration. On its website, HRSA provides an update on the removal of the resource page, noting that “covered entities should continue to comply with the 340B Program statute and all applicable regulations, guidance and policies.” When HRSA announced the policy in June 2020, it had indicated that although the FAQs were housed on the COVID-19 resource page, the question specific to offsite outpatient locations was a permanent policy and not tied to the duration of the COVID-19 PHE.

In its letter to HRSA, the association highlights that the HRSA did not provide notice that the June 2020 policy would expire at the end of COVID-19 PHE flexibility. Additionally, the association emphasized that the sudden reversal without adequate notice and lack of explanation for this reported change are inconsistent with requirements under federal administrative law and would have a profound impact on essential hospitals and the populations they serve.

The association urged swift communication from HRSA that would allow the use of 340B drugs in offsite outpatient locations for the benefit of underserved communities and the stability of the 340B program.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Faridat Animashaun is a policy associate at America's Essential Hospitals.

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