Hospital child site requirements

(a) Hospital child site requirements Section 340B(a)(5) of the Public Health Service Act (42 U.S.C. 256b(a)(5)) is amended by adding at the end the following: (E) Hospital child site requirements (i) In general A covered entity described in one of subparagraphs (L) through (O) of paragraph (4) may register an off-campus outpatient facility associated with such covered entity for inclusion in the identification system described in subsection (d)(2)(B)(iv) to participate in the program under this section as an integral part of such covered entity if such covered entity demonstrates to the Secretary, in a manner specified by the Secretary, that such facility satisfies each of the requirements in this subparagraph. For purposes of this section, each facility registered to participate in the program under this section and satisfying the requirements in this subparagraph shall be referred to as a child site. (I) The facility is listed on the covered entity’s most recently filed Medicare cost report on a line that is reimbursable under the Medicare program (or, if the covered entity is a children’s hospital that does not file a Medicare cost report, the covered entity submits to the Secretary a signed statement certifying that the facility would be correctly included on a reimbursable line of a Medicare cost report if the covered entity filed a cost report). (II) Such cost report demonstrates that the services provided at the facility have associated costs and charges for hospital outpatient department services under title XVIII of the Social Security Act (or, if the covered entity is a children’s hospital that does not file a Medicare cost report, the covered entity submits to the Secretary a signed statement certifying that the services provided at the facility include outpatient services). (III) The facility is wholly owned by the covered entity. (IV) The Secretary has made a determination, under the process described in section 413.65(b) of title 42, Code of Federal Regulations (or any successor regulations), that the facility meets the Medicare provider-based standards under section 413.65 of title 42, Code of Federal Regulations (or any successor regulations) for an off-campus outpatient department of the covered entity. (V) The facility provides outpatient health care services that are not limited to only dispensing, administering, or otherwise furnishing covered outpatient drugs. (VI) The facility is subject to and adheres to all charity care and sliding fee scale policies of the covered entity and makes such policies publicly available in a manner consistent with requirements established under section 501(r) of the Internal Revenue Code of 1986 applicable to hospital financial assistance policies. (VII) The facility is located in an area with a shortage of personal health services that is— (aa) initially designated by the Secretary pursuant to section 254b(b)(3) of title 42, United States Code, on or before December 1, 2024; or (bb) designated by the Secretary pursuant to subparagraphs (A) through (C) of section 254b(b)(3) of title 42, United States Code, after December 1, 2024, using the scoring methodology and criteria specified by the Secretary as of December 1, 2024. (VIII) In the case of a covered entity described in one of subparagraphs (L) through (O) of paragraph (4) that is a private nonprofit hospital that has, as the basis for its participation in the program under this section, a contract with a State or local government to provide health care services to low-income individuals who are uninsured, as described in paragraphs (4)(L)(i) and (11), the facility independently complies with all requirements applicable to such covered entity with respect to such contract. (IX) For the most recent year, the facility’s total cost incurred for charity care (as such term is defined in line 23 of worksheet S–10 to the Medicare cost report, or in any successor form) furnished at such facility during such year, as a share of the facility’s total patient service revenue, is greater than or equal to the amount described in item (aa) or item (bb), whichever is greater— (aa) for such year, the total cost incurred for charity care, as a share of total patient service revenue, furnished at the covered entity’s on-campus locations (as campus is defined in section 413.65(a)(2) of title 42, Code of Federal Regulations (or any successor regulations)); or (bb) the average cost incurred for charity care, as a share of total patient service revenue, calculated for the year prior to the most recent year for which data is available, across all hospitals in the State where the facility is located that receive payments for inpatient hospital services under the prospective payment system established under section 1886(d) of the Social Security Act. (X) For the most recent year, the facility’s share of total outpatient services revenue derived from base reimbursement to such entity (excluding supplemental and indirect reimbursement) under title XIX of the Social Security Act (including with respect to individuals also entitled to benefits under part A of title XVIII of such Act or enrolled in part B of title XVIII of such Act) and payments under title XXI of such Act for items and services furnished on an outpatient basis at the facility (including any cost sharing for such items and services) is greater than or equal to the amount described in item (aa) or item (bb), whichever is greater— (aa) for such year, the share of total outpatient services revenue derived from base reimbursement to such entity (excluding supplemental and indirect reimbursement) under title XIX of the Social Security Act (including with respect to individuals also entitled to benefits under part A of title XVIII of such Act or enrolled in part B of title XVIII of such Act) and payments under title XXI of such Act for items and services furnished on an outpatient basis at the on-campus locations of the covered entity with which the facility is associated (including any cost sharing for such items and services) (campus shall have the meaning given such term in section 413.65(a)(2) of title 42, Code of Federal Regulations (or any successor regulations)); or (bb) the average share of total outpatient services revenue derived from base reimbursement (excluding supplemental and indirect reimbursement) under title XIX of the Social Security Act (including with respect to individuals also entitled to benefits under part A of title XVIII of such Act or enrolled in part B of title XVIII of such Act) and payments under title XXI of such Act for items and services furnished on an outpatient basis (including any cost sharing for such items and services), calculated for the year prior to the most recent year for which data is available, across all hospitals in the state where the facility is located that receive payments for outpatient hospital services under the prospective payment system for covered outpatient department services established under section 1833(t) of such Act. (XI) The covered entity certifies, at the time such facility is initially registered for inclusion in the identification system described in subsection (d)(2)(B)(iv) to participate in the drug pricing program under this section and annually thereafter as part of the recertification process, that the facility satisfies all applicable requirements under this subparagraph. (ii) Limitation Only an off-campus outpatient facility that meets each of the requirements under this subparagraph may purchase covered outpatient drugs under the 340B program or use covered outpatient drugs purchased under the 340B program by another part of the covered entity that is authorized to participate in such program. Any transfer of 340B drugs to another facility or another part of a covered entity that is not authorized to participate in the 340B program shall be deemed a violation of subparagraph (B). (iii) Deregistration If at any time following registration a requirement described in clause (i) is no longer fully satisfied with respect to a facility, the covered entity described in such clause shall immediately notify the Secretary that such facility no longer fully satisfies the relevant requirement, deregister the facility from the program under this section, remove the facility from the identification system described in subsection (d)(2)(B)(iv), and take all necessary actions to prohibit such facility from making any purchases under the program under this section or representing to third parties that such facility may purchase covered outpatient drugs under such program. (iv) Obligation to self-disclose A covered entity described in clause (i) shall immediately disclose to the Secretary and the manufacturer of the affected covered outpatient drug any purchase made under the program under this section by or on behalf of the covered entity with respect to a facility that, at the time of the purchase of such drug, did not fully satisfy the requirements in such clause. Any such purchase shall require the covered entity to promptly conduct an audit supervised by the Secretary to identify the full scope of noncompliance with such requirements and to provide the written results of such audit to the Secretary and the manufacturer of the affected covered outpatient drug. The covered entity shall be liable to the manufacturer of the covered outpatient drug that is the subject of the noncompliance in an amount equal to the reduction in the price of the drugs provided under paragraph (1), plus interest on such amount, which shall be compounded monthly and equal to the current short-term interest rate as determined by the Federal Reserve for the time period for which the covered entity is liable. (v) Civil monetary penalty Where a covered entity knowingly and intentionally violates clause (ii) or otherwise fails to satisfy a requirement in clause (iii) or clause (iv), the covered entity shall be required to pay a civil monetary penalty equal to $2,500 for each such violation, which amount shall be adjusted for inflation annually to reflect the rate of change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics. The provisions of section 1128A of the Social Security Act (other than subsections (a) and (b)) shall apply to a civil monetary penalty under this clause in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). The Office of Inspector General of the Department of Health and Human Services shall carry out the provisions related to the imposition of civil monetary penalties under this clause. (vi) Secretarial publication of reports On an annual basis, the Secretary shall prepare and make available to the public in an electronic, machine readable format separate reports listing facilities that satisfy the requirements in each of subclauses (IX) and (X) of clause (i).. (b) Effective date The provisions in section 340B(a)(5)(E) of the Public Health Service Act, as added by this Act, shall become effective 120 days after the date of enactment of this Act. (c) Implementation of hospital child site standards Not later than 60 days prior to the effective date of section 340B(a)(5)(E) of the Public Health Service Act, as added by this Act, the Secretary shall issue program instructions directing each covered entity described in section 340B(a)(5)(E)(i) of the Public Health Service Act, as amended by this Act, to, before the effective date of section 340B(a)(5)(E) of the Public Health Service Act, as added by this Act, register in the identification system described in section 340B(d)(2)(B)(iv) of the Public Health Service Act, or update existing registrations in such system for, off-campus outpatient facilities associated with such covered entity that satisfy the requirements in such section. Such instructions shall direct each such covered entity to, on or before the effective date of section 340B(a)(5)(E) of the Public Health Service Act, as added by this Act, remove from such system the existing registration of any off-campus outpatient facility associated with such covered entity that does not satisfy the requirements in section 340B(a)(5)(E)(i) of the Public Health Service Act. Clauses (iii) through (v) of section 340B(a)(5)(E) of the Public Health Service Act shall apply with respect to any covered entity described in one of subparagraphs (L) through (O) of section 340B(a)(4) of the Public Health Service Act that fails to remove a facility described in the immediately preceding sentence on or before the effective date of section 340B(a)(5)(E) of the Public Health Service Act, as added by this Act.