Patient definition

(a) Patient definition (1) In general Section 340B(b) of the Public Health Service Act (42 U.S.C. 256b(b)) is amended to add at the end of the following: (3) Patient (A) In general In this section, the term patient, with respect to a covered entity, means an individual who— (i) has received an outpatient health care service from the covered entity at any point within the preceding 2 years; (ii) has a relationship with the covered entity such that the covered entity creates and maintains an auditable medical record in a form and manner consistent with State and Federal law, that demonstrates the existence of a patient relationship in accordance with this paragraph for each prescription or order for a covered outpatient drug, and maintains such record for a period of at least 3 years, or longer if required by State or Federal law; and (iii) received a prescription or order for a covered outpatient drug— (I) from a practitioner as a result of an outpatient health care service described in clause (i); or (II) as a result of a referral described in subsection (a)(13). (B) AIDS drug purchasing assistance program patients An individual registered in the program of a covered entity described in subsection (a)(4)(E) is a patient of the covered entity for purposes of this paragraph. (C) State or political subdivision of a State receiving funding under section 318 An individual who receives a drug purchased by a State or political subdivision of a State, for the treatment of a disease or condition for which the State or political subdivision of a State has received such award under section 318, is a patient exclusively of the State or political subdivision of the State for the purpose of qualifying that prescription for 340B pricing under this section. (D) Exclusions For purposes of this section, an individual shall not be considered a patient of a covered entity if the outpatient health care services received by the individual consist only of— (i) the administration of a drug, or the dispensing of a drug for subsequent self-administration or administration in the home setting; or (ii) an infusion of a drug. (E) Exception for discharge prescriptions In the case of a patient discharged from an emergency department or inpatient hospital stay from a covered entity described in any of subparagraph (A) through (O) of subsection (a)(4) that results in an outpatient prescription, a covered entity may provide such drug to the individual as a covered outpatient drug pursuant to the program under this section, and shall be deemed to meet the requirements for establishment of a patient under subparagraph (A) in the same manner and under the same conditions as the covered entity would provide such drug to such patient had the covered entity prescribed the drug. (4) Outpatient health care service The term outpatient health care service means an outpatient health care service— (A) that was furnished pursuant to a valid, written order that is documented or a referral that is documented in the medical record for the patient that is maintained by the covered entity; and (B) (i) for which reimbursement under title XVIII or XIX of the Social Security Act would be available when the services were furnished; (ii) that can be identified by a CPT established by the American Medical Association or HCPCS code established by the Centers for Medicare & Medicaid Services as of the date the services were furnished; or (iii) in the case of covered entity described in any of subparagraphs (A) through (K) of subsection (a)(4), that is a service that is consistent with the scope of the grant or designation described in the applicable such subparagraph. (5) Practitioner The term practitioner means a health care practitioner who— (A) (i) is an employee or independent contractor of a covered entity, and the covered entity bills for such services and is responsible for the care furnished by such practitioner; or (ii) furnishes health care services under an ongoing contractual obligation to a covered entity, cooperative arrangement pursuant to section 330 with a covered entity described in subsection (a)(4)(A), or, only in the case of a covered entity that is prohibited to enter into contractual obligations, pursuant to medical staff membership with a covered entity, such that the covered entity maintains clinical responsibility for the health care services that resulted in the patient receiving a prescription or order for the covered outpatient drug; and (B) is not excluded, pursuant to section 1128 of the Social Security Act, from participation in the Medicare program or a State health care program (as defined in section 1128(h) of the Social Security Act).. (2) Audits Section 340B(a)(5)(C) of the Public Health Service Act (42 U.S.C. 256b(a)(5)(C)), as amended by section 3(e), is further amended by adding at the end the following: (iii) Audits relating to patient status (I) In general A covered entity providing covered outpatient drugs pursuant to an agreement under paragraph (1) shall permit the Secretary and the manufacturer to audit, at the Secretary’s or manufacturer’s expense, the records of the entity with respect to drugs of the manufacturer that directly pertain to the entity’s compliance with— (aa) treating individuals as patients of the entity only as described in subsection (b)(3); and (bb) the requirements for providing such drugs to referred patients pursuant to paragraph (13). (II) Auditing The Secretary shall audit the records of covered entities with respect to records described in this clause not less frequently than every 3 years, and shall audit high-risk and high-volume, as defined by the Secretary, covered entities more frequently, in a manner that is not overly burdensome to the covered entity. The Secretary shall establish a mechanism for manufacturers to request and authorize audits specific to referral prescription eligibility under paragraph (13) upon demonstration of a credible allegation of non-compliance. (III) Authority to establish process The Secretary shall establish, through notice and comment rulemaking, a process for manufacturers and covered entities to make a good faith attempt to resolve any concerns identified by a manufacturer prior to the initiation of an audit under this clause. A manufacturer shall provide to the covered entity the same materials that the manufacturer provided to the Secretary to support a credible allegation under this clause, as determined by the Secretary.. (3) Enforcement Section 340B(a)(5)(D) of the Public Health Service Act (42 U.S.C. 256b(a)(5)(D)) is amended— (A) by striking subparagraphs (A) and inserting subparagraph (A); (B) by striking If the Secretary and inserting the following: (i) In general If the Secretary; and (C) by adding at the end the following: (ii) Sanctions for noncompliance with patient status requirements If the Secretary determines, after an audit described in subparagraph (C)(iii), a covered entity to not be in compliance with the requirements of treating an individual as a patient of the covered entity as described in subsection (b)(3) or the requirements of paragraph (13)— (I) the covered entity shall develop a corrective action plan, which shall be subject to approval and monitoring by the Secretary; and (II) if the Secretary determines that the covered entity has not adequately corrected its noncompliance in accordance with such plan— (aa) the covered entity shall be ineligible to participate in the drug discount program under this section for a period determined by the Secretary, not to exceed 3 years; and (bb) the Secretary may order the covered entity to pay civil monetary penalties, pursuant to subpart O of part 1003 of title 42, Code of Federal Regulations (or any successor regulations), with respect to any covered outpatient drugs purchased by the covered entity during the period in which the covered entity was found to be not in compliance with the requirements of treating an individual as a patient of the entity as described in subsection (b)(3) or the requirements of paragraph (13).. (b) Covered entity registration 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) Covered entity registration As a condition for participation in the drug discount program under this section, a covered entity shall register with the Secretary and be listed on the 340B Office of Pharmacy Affairs Information System (or a successor to such system).. (c) Treatment of certain prescriptions for patients referred to non-340B providers Section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)), as amended by section 3(b), is further amended by adding at the end the following: (13) Referral prescriptions (A) In general In the case of a patient of an eligible covered entity who is referred by such covered entity to a prescribing provider who is not providing care on behalf of a covered entity, and such prescribing provider prescribes a drug within 12 months of the patient receiving such referral, the eligible covered entity may provide such drug to such patient as a covered outpatient drug pursuant to the program under this section, in the same manner and under the same conditions as the covered entity would provide such drug to such patient had the covered entity prescribed the drug, in accordance with the requirements under subparagraph (C). (B) Eligible covered entity For purposes of this paragraph, a covered entity is an eligible covered entity if such entity is— (i) an entity described in any of subparagraphs (A) through (K) or (N) of paragraph (4); or (ii) a sole community hospital described in paragraph (4)(O). (C) Requirements (i) In general An eligible covered entity may provide a drug to a patient as described in subparagraph (A) only if— (I) the covered entity has a documented relationship with the patient, as described in subsection (b)(3), and has documentation of the provision of care provided by the covered entity and the prescribing provider and consultation with the prescribing provider regarding such patient, including documentation of the referral and the prescription; (II) the patient was referred to the prescribing provider who prescribed the drug by the covered entity; (III) the prescription is filled at the covered entity's wholly-owned pharmacy or contract pharmacy; (IV) the covered entity maintains, for a period of at least 3 years, documentation of compliance with this paragraph, including all documents subject to audit under paragraph (5)(C); (V) the covered entity does not share the savings received from purchasing the covered outpatient drug with the prescribing provider; and (VI) the covered entity meets such other requirements as the Secretary may establish through notice and comment rulemaking. (ii) Excepted drugs (I) In general Except as provided in subclause (II), a covered entity may not provide a patient a covered outpatient drug pursuant to subparagraph (A) if such drug— (aa) is an infused drug; (bb) is a clinician-administered drug; or (cc) otherwise requires administration by a clinician. (II) Exceptions A covered entity may provide a patient a covered outpatient drug described in subclause (I) pursuant to subparagraph (A) if— (aa) the eligible covered entity is a covered entity described in paragraph (4)(A) and was providing infusion services necessary to deliver a required primary health service or an additional health service (as defined in section 330(b)(1)) pursuant to funding received under section 330, as of the date of enactment of the SUSTAIN 340B Act; or (bb) the Secretary determines, through notice and comment rulemaking, that low-income, medically underserved residents of the service area of the eligible covered entity lack access to infusion services within a reasonable distance and based on this determination, the eligible covered entity receives approval from the Secretary to provide these services pursuant to funding provided under section 330, subject to all the requirements of that section. (D) Rule of construction Nothing in this paragraph shall be construed to affect the application of subsection (e). (E) Addressing significant volume of drugs provided to referred patients (i) In general The Secretary shall audit any eligible covered entity that, in any year, provides covered outpatient drugs to patients who received a prescription for such drug from a provider who is not a covered entity in a volume that exceeds the lesser of— (I) 20 percent of the total number of covered outpatient drugs purchased by the covered entity at or below the applicable ceiling price and dispensed by the covered entity for the year; or (II) the average annual percentage over the most recent 3-year period, of the total number of covered outpatient drugs purchased by the covered entity at or below the applicable ceiling price for the year and dispensed by the covered entity to patients, that were dispensed to patients who received a prescription for such drug from a provider who is not a covered entity. (ii) Hardship exceptions The Secretary shall develop specific criteria for a hardship exceptions process, that is not overly burdensome to a covered entity, under which an eligible covered entity may exceed the threshold established under clause (i) without requiring an audit described in such clause only if the eligible covered entity provides required information to the Secretary to demonstrate such hardship, such as a medical need or workforce shortage, in accordance with the criteria established by the Secretary. (iii) Reporting A covered entity shall report annually to the Secretary— (I) the percentage of the covered entity’s revenue under the drug discount program derived from drugs prescribed by a prescribing provider pursuant to this subsection; and (II) the percentage of the total number of covered outpatient drugs purchased by the covered entity that were prescribed by a prescribing provider pursuant to this subsection. (iv) Public availability of information The Secretary shall make aggregate information on eligible covered entities identified under clause (i) available on the website of the Health Resources and Services Administration, in such form and manner that the Secretary determines appropriate, and shall not identify any specific covered entity. (F) Enforcement (i) Corrective action plan In the case that the Secretary finds that a covered entity has failed to comply with any requirement under this paragraph, such covered entity shall be required to submit a corrective action plan to the Secretary, which shall be subject to approval and monitoring by the Secretary. (ii) Loss of referral authorization A covered entity that fails to comply with a corrective action plan within 180 days of approval of such plan by the Secretary under clause (i) shall become ineligible to provide covered outpatient drugs to referred patients under subparagraph (A) for such period of time determined by the Secretary under the corrective action plan, not to exceed 3 years. (iii) Monetary penalties The Secretary may impose civil monetary penalties, pursuant to subpart O of part 1003 of title 42, Code of Federal Regulations (or any successor regulations), on a covered entity for any discounts received by such entity on covered outpatient drugs provided to referred patients under this paragraph, if the covered entity is found to be noncompliant with the requirements of this paragraph with respect to the relevant drug. (G) Definitions For the purposes of this paragraph— (i) the term prescribing provider means a licensed health care provider who prescribes a drug to a patient of a covered entity based on the referral of the patient by the covered entity to the provider; and (ii) the term referral means a written, electronic, or otherwise documented order by a licensed health care provider ordering, or the recertifying of the need for, a health service.. (d) OIG report on referral prescriptions The Inspector General of the Department of Health and Human Services shall— (1) during the 12-year period beginning on the date of enactment of this Act, conduct an annual study on covered outpatient drugs provided pursuant to prescriptions for referred patients under paragraph (13) of section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)), as added by subsection (c); and (2) not later than 2 years after the date of enactment of this Act, and for each of the next 10 years, submit to Congress a report on the study under paragraph (1).