By Kristin Fox-Smith and Bill Wood

The summer 340B Coalition Conference took place July 11-13. Visante’s team of 340B Program consultants was on hand to gather important and timely information related to compliance and program protection. Some of those key findings are described here.

Record attendance

This meeting yet again broke the attendance record, with almost 1,400 registrants. Attendees represented a variety of backgrounds, such as government, state Medicaid agencies, covered entities, technology providers, PhRMA, wholesalers, vendors and consultants. Each of these groups has a vested interest in learning about 340B program trends and news.

 Status of the ‘mega-guidance’

Interestingly, the 340B Program Omnibus Guidance, known as the ‘mega-guidance’, was not a focus of this recent meeting. However, since the mega-guidance is one of the bigger issues on the minds of those impacted by 340B, it is important to know that there is a possibility that the mega-guidance could be released as early as December 2016. However, there is no requirement that HRSA/OPA meet this deadline, and to date, 340B Health has heard nothing official from HRSA about the release date or what the final guidance may look like. No hints, no leaks, nothing at all.

With concern to mega-guidance comments, HRSA received a total of 1,264 sets of comments from 340B stakeholders, with each set containing multiple comments. There will most likely be several iterations of the guidance before it is made final and, even in its final form, the guidance does not have the force of law.

Audit focus increasing

As expected, HRSA’s audit focus continues to increase. As such, HRSA announced that a manufacturer audit is scheduled for FY16 and five additional audits are scheduled for FY17. There were 200 covered entity audits for FY 2015, and there have been 140 thus far in FY 2016. Captain Pedley repeated that OPA audits are ONLY allowed to the current regulation/guidance, not the proposed or “potential” guidance.

Medicare Part B demo and Site Neutral law

While no additional 340B-related legislation has been or is expected to be introduced, we anticipate both the Medicare Part B demo and Site Neutral law to have some impact.

Medicare Part B demo

The demo is intended to reduce the cost paid by Medicare for clinic administered drugs, but is being met by pushback from both parties. The demo will proceed but may be scaled back. It will require drugs separately payable under Medicare Part B to be reimbursed at ASP + 2.5% rather than the current ASP + 6% (The sequester reduced the add‐on payment to 4.3%). In addition, the demo will pay an add-on fee of $16.80.

Site Neutral Section

Passed into law as Section 603 of the Bipartisan Budget Act of 2015, this law requires that hospital outpatient clinics and surgery centers will be paid the same as independent facilities.

Although CMS states that Section 603 clinics are part of the hospital, CMS has not ruled whether these clinics will be listed in a reimbursable section of the Medicare Cost Report. If they were not listed on a reimbursable line, these clinics would NOT be eligible for 340B.

Drug shortages and 340B

In the past, critics of the 340B Program have claimed the Program is a contributing cause of drug shortages. However, the Government Accountability Office (GAO) recently released a 76-page report concerning drug shortages and did not make mention of 340B Program as a contributing factor. As these findings are consistent with other reports on the same subject, we expect that this report will put an end to critics’ claims on this topic.

If you have questions about the recent conference, or would like to learn more about how Visante’s 340B Program consulting team can support your organization’s compliance and audit readiness, please contact Kristin Fox-Smith at

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