How important is 340B Program revenue to your Hospital’s fiscal health? Can you survive without it?
The COVID-19 Public Health Emergency (PHE) created a sense of urgency for many hospital providers that participated in the 340B Program. With declining inpatient volumes influenced by the PHE, many disproportionate share hospitals (DSH), sole community hospitals (SCH), rural referral centers (RRC), children’s hospitals (PEDS), and free standing cancer hospitals (CAN) were subject to termination from the 340B Program due to their inability to meet the Medicare DSH percentage of greater than 11.75% for DSH, PEDS, and CAN and 8% for SCH and RRC.
Section 121 of the Consolidated Appropriations Act of 2022 (Act) created an eligibility exception for certain hospitals terminated from the 340B program. For the cost report period beginning October 1, 2019 and ending no later than December 31, 2022, impacted hospitals were permitted to apply for reinstatement to the 340B program by completing an attestation and submitting to the Health Resources and Services Administration (HRSA).With the expiration of this provision of the Act in 2023, hospitals participating in the 340B Program are back to square one with having to meet the Medicare DSH percentage thresholds without eligibility assistance from HRSA.
With the expiration of the HRSA eligibility assistance, what can you do to ensure that your hospital will meet the Medicare DSH percentage threshold and continue to participate in the 340B Program? For starters, you will want to ensure that you have captured all Medicaid paid days for the cost reporting period in question. Your states Medicaid program should be able to provide this information. Also, ensuring that you have captured all Medicaid eligible days that are not also eligible for Medicare, both in-state and out-of-state, is another important factor.
There are other factors for consideration that will help improve your organization’s Medicare DSH percentage…The reimbursement team at Microscope can assist your hospital with meeting the Medicare DSH target that will keep your hospital participating in the 340b program. Our experienced team of professionals will do a deep dive into your patient data to ensure your hospital is maximizing your Medicare DSH percentage.
For more information, please contact:
Richard T. (Terry) Lang, CPA, FHFMA - Managing Principal, Reimbursement
