Establishing a clear patient definition

(a) In general Section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended by adding at the end the following: (11) Patient defined (A) In general In this section, the term patient means an individual who— (i) has received an outpatient health care service from a prescribing provider at a covered entity within the preceding 24 months, and such health care service— (I) is a service that was reimbursable under title XVIII of the Social Security Act when furnished by a prescribing provider or, in the case of an individual who is not eligible for benefits under such title, would have been so reimbursable had the individual been so eligible; a service shall be considered reimbursable if it is of a type eligible for reimbursement under title XVIII; and (II) in the case of a covered entity described in subparagraphs (A) through (K) of subsection (a)(4), is a service that is within the scope of the grant or designation described in such subparagraph. (ii) received the prescription or order for the covered outpatient drug related to the service described in clause (i); and (iii) has a relationship with the covered entity such that the covered entity creates and maintains auditable health care records which demonstrate that— (I) the covered entity maintains a provider-to-patient relationship with the individual for the healthcare service related to the covered outpatient prescription or order; (II) the prescribing provider has clinical responsibility and oversight for the individual’s health care service related to the prescription or order for the covered outpatient drug with the covered entity; and (III) any other information specified by the Secretary through notice and comment rulemaking. (B) Application For each prescription or order for a covered outpatient drug, an individual shall qualify as a patient under subparagraph (A) only if the requirements of such subparagraph are independently satisfied with respect to that prescription or order. (C) Record retention and auditing A covered entity shall— (i) retain auditable health care records in a form and manner specified by the Secretary through notice and comment rulemaking which demonstrate the existence of a patient relationship in accordance with this paragraph for each prescription or order for a covered outpatient drug for a period of the greater of 5 years or such period as required under applicable State and Federal laws governing medical or pharmacy records; and (ii) no more than one time annually, in accordance with subsection (a)(5)(C), permit the Secretary and the manufacturer of a covered outpatient drug that is subject to an agreement under this subsection, to audit, at the Secretary’s or the manufacturer’s expense, the records of the entity which demonstrate the existence of a patient relationship in accordance with this paragraph and which directly pertain to the entity’s compliance with the requirements of subsection (a)(5)(B).. (b) Additional amendments Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended— (1) in subsection (a), by adding at the end the following: (12) Prescribing provider In this section, the term prescribing provider means a health care provider who, at the time the health care provider orders or prescribes a covered outpatient drug— (A) (i) is an employee or independent contractor of the covered entity such that the covered entity bills for services furnished by the health care provider and is responsible for the care furnished by such provider; or (ii) is an employee or independent contractor of a physician organization affiliate of the covered entity, has assigned their right to bill and collect for professional services to such physician organization affiliate, and furnishes outpatient health care services to patients of the covered entity. (B) has clinical responsibility over the care related to the order or prescription for the covered outpatient drug, as demonstrated by the provider’s signature on the relevant order or prescription for the covered outpatient drug; (C) is enrolled as a provider in the Medicare program under title XVIII of the Social Security Act, or the Medicaid program under title XIX of the Social Security Act; and (D) is not excluded by the Secretary from participation in Medicare and State health care programs pursuant to section 1128 of the Social Security Act (42 U.S.C. 1320a-7).; and (2) in subsection (b), by adding at the end the following: (3) Physician organization affiliate defined For purposes of subparagraph (A)(ii), the term physician organization affiliate means an entity that— (A) is lawfully organized for the purpose of employing or contracting with licensed professionals to furnish clinical services; (B) has an ongoing, legally binding agreement with the covered entity to provide health care services to patients of the covered entity at the covered entity’s locations; and (C) the outpatient healthcare services are provided such that responsibility for the care provided remains with the covered entity and meets the other requirements in this paragraph.. (c) Referral requirements Section 340B of the Public Health Service Act (42 U.S.C. 256b), as amended, is amended by adding at the end the following new subsection: (f) Referral qualifications (1) In general Subject to the requirements of this subsection, in the case of a patient of an eligible covered entity who is referred by such covered entity to a provider outside such covered entity, and such non-covered entity provider prescribes a covered outpatient drug within 24 months of the date of such referral, the eligible covered entity may provide such drug to such patient as a covered outpatient drug pursuant to the drug discount program under this section, in the same manner and under the same conditions as the covered entity would provide such drug had such drug been prescribed by a prescribing provider of such covered entity. (2) Covered entity eligibility For purposes of this subsection the covered entity that dispenses or administers the covered outpatient drug must be— (A) a federally qualified health center, as described in subsection (a)(4)(A), that is also a comprehensive primary care medical home, certified as a Patient-Centered Medical Home by a national accrediting organization; (B) a critical access hospital, as described in subsection (a)(4)(N); or (C) a sole community hospital, as described in subsection (a)(4)(O). (3) Patient eligibility For purposes of this subsection— (A) the individual to whom a covered outpatient drug is dispensed or administered must be a patient of the covered entity meeting the requirements under (a)(11); (B) the individual must have received direct care from the covered entity within 24 months prior to the date on which the individual was referred to receive care by the prescribing entity; (C) the care furnished to the individual by the covered entity that resulted in the referral must be— (i) in the case of a federally qualified health center described in paragraph (2)(A), within the scope of the grant application made to the Secretary under section 330(k)(1); (ii) in the case of a critical access hospital described in paragraph (2)(B), within the scope of the agreement with the State under section 1820(c)(2) of the Social Security Act; and (iii) in the case of a sole community hospital described in paragraph (2)(C), within the scope of the request made to the Secretary for such classification under section 1886(d)(5)(C)(iii) of the Social Security Act; (D) the covered entity must have— (i) Referred the individual to the prescribing entity; (ii) Consulted with a clinician at the prescribing entity regarding the individual’s care; and (iii) Provided care to the individual after dispensing or administering the prescription, as appropriate; and (E) in the case of a federally qualified health center described in paragraph (2)(A), a prescription generated as a direct result of an emergency department visit or hospital discharge. (4) Exclusions The following categories of drugs shall not be eligible for discounts under this subsection— (A) orphan-designated drugs; or (B) in the case of a prescription written by a federally qualified health center described in paragraph (2)(A), a drug that is infused or that requires a clinician to administer, except for those entities providing infusions as of the date of enactment of this Act and subject to the limitation described in paragraph (5). (5) Documentation requirements (A) In general In association with any covered outpatient drug receiving a discount under this subsection, the individual’s medical record must include documentation to demonstrate compliance with the requirements of paragraph (3), including— (i) documentation of the direct care provided to the individual by the covered entity prior to the referral to the prescribing entity; (ii) documentation of the referral from the covered entity to the prescribing entity; (iii) documentation of direct care received by the individual from the covered entity that resulted in the referral and that occurred within 24 months prior to the initial referral; (iv) documentation of care received by the individual from the prescribing entity within 24 months of the covered entity referral, which may take the form of receipt of consult notes or documentation of a discussion between the covered entity and prescribing entity regarding the care furnished by the prescribing entity; (v) documentation of ongoing consultation between the covered entity and the prescribing entity as appropriate for the covered entity’s ongoing responsibility of the individual’s care, consistent with the scope of care described in paragraph (3)(C); and (vi) documentation of the prescribing entity’s prescription to be dispensed or administered by the covered entity and updated through the qualified entity’s medication list for the patient. (B) Document retention All documentation described under this paragraph shall be maintained for a period of the greater of 5 years or such period as required under applicable State and Federal laws governing medical or pharmacy records as auditable records that demonstrate compliance with the requirements of this subsection. (6) Referral audits based on volume (A) In general The Secretary shall conduct audits of any eligible covered entity that meets the following conditions in a given year— (i) referral prescriptions described in paragraph (1) exceed 25 percent of the total number of covered outpatient drugs purchased and dispensed by the covered entity for the year; (ii) referral prescriptions described in paragraph (1) are in the 75th percentile of all reporting covered entities by covered entity classification; or (iii) referral prescriptions exceeding the average annual percentage for that covered entity classification over the most recent 3-year period, of the total number of covered outpatient drugs purchased and dispensed by the qualified referral covered entity. (B) Transparency of information The Secretary shall make public aggregate information on eligible covered entities audited under subparagraph (A) available on a website of the Health Resources and Services Administration, in such form and manner that the Secretary determines appropriate. (7) Additional audits (A) In addition to audits conducted under paragraph (6), the Secretary shall audit any covered entity receiving discounts under this subsection for compliance with requirements of this subsection every four years and, in the case of covered entities receiving abnormal volumes of discounts as compared to such covered entity’s discounts over the previous three year period, more frequently (but no more than one time annually). (B) The Secretary shall through notice and comment rulemaking establish a process for manufacturers to request audits of discounts provided under this subsection at any time the manufacturer provides documentation to the Secretary of suspected non-compliance with the requirements of this subsection, with information received by the manufacturer from the clearinghouse established under section 1150D of the Social Security Act that provides credible evidence of non-compliance serving as acceptable documentation for this purpose. (8) Enforcement (A) Loss of referral authorization (i) A covered entity for which the Secretary determines through an audit conducted pursuant to or otherwise authorized under this section that the share of referral prescriptions during the previous calendar year exceeds 35 percent of the covered entity’s total number of covered outpatient drugs purchased and dispensed by the covered entity in the applicable year, may be subject to a Corrective Action Plan in accordance with the corrective action plan process established under subsection (d)(2)(B)(vii). (ii) A covered entity that fails to implement a Corrective Action Plan required under clause (i) and comply with the timeline for correction set forth in such Corrective Action Plan shall immediately lose eligibility under this subsection for a period determined by the Secretary through notice and comment rulemaking, but no more than 1 year. (iii) The Secretary and the Administrator of the Health Resources and Services Administration shall develop a process through notice and comment rulemaking for covered entities that lose eligibility for discounts under this section pursuant to clause (ii) to complete the Corrective Action Plan and resume referrals under the program. (B) Monetary penalties The Secretary may impose civil monetary penalties on covered entities for any discounts under this section later deemed ineligible on the grounds the covered entity is found to be noncompliant with the requirements of this subsection with respect to the relevant prescription. The amount of such civil monetary penalties shall be paid to the affected manufacturer..