Requirements for nonhospital covered entities and subgrantees

Section 340B(a)(5) of the Public Health Service Act (42 U.S.C. 256b(a)(5)) is further amended by adding at the end the following: (I) Additional requirements for nonhospital covered entities; requirements for subgrantees (i) Additional requirements for nonhospital covered entities A covered entity described in one of subparagraphs (A) through (K) of paragraph (4) shall, as a condition of participation in the program under this section— (I) be a nonprofit or public entity (as determined by the Secretary); (II) be eligible to purchase a covered outpatient drug subject to an agreement under this section only with respect to a patient receiving a health care service at a registered covered entity site, and such service and such drug are within the scope and time period of the Federal grant, project, or Federal grant-authorizing statute, as applicable, that qualifies such covered entity for participation in the program under this section; (III) oversee the participation in the program under this section of any subgrantee with which such covered entity enters into an enforceable written agreement in accordance with subclause (IV) and be directly liable for noncompliance by any such subgrantee with any requirement under this section; (IV) have an enforceable written agreement with any subgrantee, which shall apply to all registered sites of such subgrantee, and require such subgrantee to comply with all requirements under this section otherwise applicable to the covered entity and to maintain written records, which shall be made available to the Secretary upon request, sufficient to demonstrate such subgrantee’s receipt of eligible Federal funds or an in-kind contribution purchased with such funds, as described in clause (iii), and the grant under which such subgrantee receives such funds or contribution; and (V) maintain written records sufficient to demonstrate such entity authorized such subgrantee to, prior to purchasing covered outpatient drugs subject to an agreement under this section, register each subgrantee site in the covered entity identification system established under subsection (d)(2)(B)(iv) to participate in the program under this section as a subgrantee of such entity and provide the Secretary with such registration information as requested to demonstrate such subgrantee’s receipt of eligible Federal funds or an in-kind contribution purchased with such funds, as described in clause (iii), and the grant under which the subgrantee receives such funds or contribution. (ii) Requirements for subgrantees Notwithstanding any other provision in this section, a subrecipient of a Federal grant shall be eligible to participate in the program under this section only if such subrecipient is a subgrantee (as defined in clause (iii)) and such subgrantee— (I) is a nonprofit or public entity (as determined by the Secretary); (II) prior to purchasing covered outpatient drugs subject to an agreement under this section— (aa) enters into an enforceable written agreement with the covered entity providing eligible Federal funds or an in-kind contribution, pursuant to clause (i)(IV); (bb) maintains written records, which shall be made available to the Secretary upon request, sufficient to demonstrate such subgrantee’s receipt of eligible Federal funds or an in-kind contribution purchased with such funds, as described in clause (iii), and the grant under which such subgrantee receives such funds or contribution; and (cc) registers each subgrantee site to participate in the program under this section in the covered entity identification system established under subsection (d)(2)(B)(iv); (III) purchases covered outpatient drugs subject to an agreement under this section only with respect to a patient receiving a health care service at a registered subgrantee site, and such service and such drug are within the scope and time period of the Federal grant, project, or grant-authorizing statute, as applicable, that qualifies such subgrantee for participation in the program under this section; (IV) in the case of a subgrantee that receives an in-kind contribution from a covered entity described in paragraph (4)(K), demonstrates to such covered entity and to the Secretary, upon initial registration to participate in the program under this section and on an annual basis thereafter, that the number of individuals aged 19 to 64 years receiving a health care service at the registered subgrantee site during the most recent calendar year who are enrolled under a State plan under title XIX of the Social Security Act (or a waiver of such plan), as a share of all individuals aged 19 to 64 years receiving a health care service at the registered subgrantee site during such calendar year, exceeds the number of individuals aged 19 to 64 years who reside in the State where such subgrantee site is located and are enrolled under a State plan under title XIX of such Act (or a waiver of such plan), as a share of all individuals aged 19 to 64 who reside in such State, each as measured by data available from the American Community Survey of the Bureau of the Census for the calendar year preceding the most recent calendar year; (V) in the case of a subgrantee that receives an in-kind contribution from a covered entity described in paragraph (4)(K), submits to such covered entity and to the Secretary, upon receipt of each in-kind contribution described in clause (iii)— (aa) a written plan in a form specified by the Secretary describing how such contribution will be used to further the goals of the relevant Federal grant, how such subgrantee will ensure that purchases of covered outpatient drugs under the program under this section are consistent with the goals of such grant, and how such subgrantee will ensure compliance with the requirements under subparagraph (A) and (B); and (bb) a written plan in a form specified by the Secretary and using criteria established by the Secretary to determine the date upon which its eligibility to participate in the program under this section, as a result of such contribution, shall terminate (absent such subgrantee’s receipt of additional funds or contributions described in clause (iii)); (VI) subject to subclause (VII), immediately notifies the Secretary, disenrolls from the program under this section, and discontinues making purchases under such program and representing to third parties that it may purchase under such program as of the date described in subclause (V)(bb) or if, at any time during its participation in the program under this section, it no longer meets one or more applicable requirements under this section; and (VII) not later than 30 days following the date on which the covered entity with which such subgrantee has an agreement pursuant to clause (i) ceases participation in the program under this section, such subgrantee either— (aa) disenrolls from the program under this section and discontinues making purchases under such program and representing to third parties that such subgrantee may purchase under such program; or (bb) enters into an enforceable written agreement with a different covered entity described in one of subparagraphs (A) through (K) of paragraph (4) that is participating in the program under this section, and satisfies all applicable requirements under this section with respect to such different covered entity. (iii) Subgrantee defined (I) In general In this subparagraph, the term subgrantee means a subrecipient of a Federal grant that— (aa) receives eligible Federal funds from a covered entity described in one of subparagraphs (A) through (K) of paragraph (4) in the form of nonnominal and ongoing payments by such covered entity directly to such subrecipient to directly support the provision of health care services by such subrecipient to individuals within the scope and time period of the Federal grant, project, or Federal grant-authorizing statute, as applicable, that qualifies such covered entity for participation in the program under this section; or (bb) receives in-kind contributions from a covered entity described in paragraph (4)(K) and such contributions— (AA) are ongoing and are in the form of real property, equipment, supplies, or services; (BB) subject to subclause (II), have a value exceeding $25,000 per year, which 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 and determined by the subrecipient and approved by the covered entity providing such contribution in a manner specified by the Secretary; (CC) are specifically identifiable and provided by such covered entity directly to such subrecipient; and (DD) directly support the provision of health care items and services by such subrecipient solely to individuals within the scope and time period of the Federal grant that qualifies such covered entity for participation in the program under this section. (II) Exclusion The requirement specified in subclause (I)(bb)(BB) shall not apply with respect to a subrecipient of a Federal grant that receives in-kind contributions from a covered entity described in paragraph (4)(K) if— (aa) as of January 1, 2025, such subrecipient is participating in the program under this section as such a subrecipient and is in compliance with all requirements under this section otherwise applicable to such subrecipient; and (bb) with respect to any in-kind contribution such subrecipient receives after January 1, 2025, such subrecipient has continuously participated in the program under this section as such a subrecipient in compliance with all requirements under this section for the period beginning on January 1, 2025, and continuing through the date on which program participation ends as determined in the plan submitted to the Secretary pursuant to clause (ii)(V)(bb) or any such earlier date on which program participation ends. (iv) Rule of construction For purposes of this section, any subgrantee that is not itself a covered entity described in one of subparagraphs (A) through (K) of paragraph (4) shall be subject to the obligations under this section applicable to the covered entity with which such subgrantee has an enforceable written agreement pursuant to clause (i). Further, for purposes of this section, each registered site of such subgrantee shall be subject to the requirements set forth in subparagraph (F) as if such site were the covered entity with which such subgrantee has an enforceable written agreement pursuant to clause (i)..