Child sites

(a) In general Section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)), as amended by section 4(c), is further amended by adding at the end the following: (14) Child sites (A) In general A covered entity described in subparagraph (L), (M), (N), or (O) of paragraph (4) that owns and operates a child site that participates in the drug discount program under this section shall maintain documentation of, and annually recertify to the Secretary through such certification processes established under title XVIII of the Social Security Act, that each such child site is wholly-owned by the entity and clinically and financially integrated with the covered entity and providing care consistent with the policies of the covered entity, including by— (i) registering each child site with the Secretary, which, in the case of a child site that is eligible for participation as described in subparagraph (B)(ii), shall include submission of the attestation (absent billing requirements) that the child site meets the Medicare provider-based rules under section 413.65 of title 42, Code of Federal Regulations (or any successor regulations); (ii) applying the same financial assistance policy for patients as applies with respect to other sites operated by the covered entity; and (iii) ensuring that each child site complies with the Medicare provider-based rules under section 413.65 of title 42, Code of Federal Regulations (or any successor regulations), or meets the requirements of subparagraph (B)(i). (B) Eligibility for child sites (i) In general A child site is eligible for participation in the drug discount program under this section, through the eligibility of the covered entity that owns and operates such child site, only if the covered entity demonstrates that the child site meets the following requirements: (I) The child site applies the same financial assistance policy for patients as the covered entity. (II) The child site ensures that the providers who order or dispense covered outpatient drugs purchased under this section at the child site or a contract pharmacy of the covered entity have clinical responsibility for health care services that result in the receipt of a prescription or order of the covered outpatient drug purchased under this section that is dispensed. (III) The child site provides a clinically meaningful range of services, as determined by the services that providers or suppliers employed by, contracted with, or authorized to provide services at, the child site are qualified to deliver. (IV) The child site is operated under the same license as the covered entity, except in areas where the State requires a separate license for the child site, or in States where State law does not permit licensure of the child site and the covered entity under a single license. If a State health facilities cost review commission or other agency that has authority to regulate the rates charged by providers in a State finds that a child site is not part of the covered entity, the child site shall not be eligible for the drug discount program under this section. (V) The clinical services of the child site and the covered entity are integrated as evidenced by the following: (aa) Professional staff of the child site have clinical privileges at the covered entity. (bb) The covered entity maintains the same monitoring and oversight of the child site as for any other owned entity or subsidiary of the covered entity. (cc) The medical director of the child site maintains a reporting relationship with the chief medical officer or other similar official of the covered entity that has the same frequency, intensity, and level of accountability that exists in the relationship between the medical director of a department of the covered entity and the chief medical officer or other similar official of the covered entity, and is under the same type of supervision and accountability as any other director, medical or otherwise, of the covered entity. (dd) Medical staff committees or other professional committees at the covered entity are responsible for medical activities in the child site, including quality assurance, utilization review, and the coordination and integration of services, to the extent practicable, between the child site and covered entity. (ee) Medical records for patients treated in the child site are integrated into a unified retrieval system, or have the ability to be readily accessed by the covered entity. (ff) Inpatient and outpatient services of the child site and the covered entity are integrated, and patients treated at the child site who require further care have full access to all services of the covered entity and are referred where appropriate to the corresponding inpatient or outpatient department or service of the covered entity. (VI) The financial operations of the child site are fully integrated within the financial system of the covered entity, as evidenced by shared income and expenses between the covered entity and the child site. For purposes of the Medicare program under title XVIII of the Social Security Act, the costs of a child site are reported in the appropriate cost center or cost centers of the covered entity, and the financial status of any child site is incorporated and readily identified in the covered entity’s trial balance. (VII) The child site is held out to the public as part of the covered entity, such that, when patients enter the child site, they are aware that they are entering the covered entity. (VIII) The child site is operated under the ownership and control of the covered entity, as evidenced by the following: (aa) The business enterprise that constitutes the child site is 100 percent owned by the covered entity. (bb) The covered entity and the child site have the same governing body. (cc) The child site is operated under the same organizational documents as the covered entity, and is subject to common bylaws and operating decisions of the governing body of the covered entity. (dd) The covered entity has final responsibility for administrative decisions, final approval for contracts with outside parties, final approval for personnel actions, final responsibility for personnel policies (such as fringe benefits or code of conduct), and final approval for medical staff appointments at the child site. (IX) The reporting relationship between the child site and the covered entity have the same frequency, intensity, and level of accountability that exists in the relationship between the covered entity and its other departments, as evidenced by compliance with the following requirements: (aa) The child site is under the direct supervision of the covered entity. (bb) The child site is operated under the same monitoring and oversight by the covered entity as any other department of the covered entity, and is operated as any other department of the covered entity with regard to supervision and accountability. The director or individual responsible for daily operations at the child site— (AA) maintains a reporting relationship with a manager at the covered entity that has the same frequency, intensity, and level of accountability that exists in the relationship between the covered entity and its existing departments; and (BB) is accountable to the governing body of the covered entity, in the same manner as any department head of the covered entity. (X) The following administrative functions of the child site are integrated with the functions of the covered entity: billing services, records, human resources, payroll, employee benefit package, salary structure, and purchasing services. Either the same employees or group of employees handle such administrative functions for the child site and the covered entity, or the administrative functions for both the child site and the covered entity are— (aa) contracted out under the same contract agreement; or (bb) handled under different contract agreements, with the contract of the child site being managed by the covered entity. (XI) (aa) The child site 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 does not file a Medicare cost report, the covered entity submits to the Secretary a signed statement certifying that the site would be correctly included on a reimbursable line of a Medicare cost report if the covered entity filed a cost report). (bb) Such cost report demonstrates that the services provided at the child site have associated costs and charges for covered entity outpatient department services under title XVIII of the Social Security Act (or, if the covered entity does not file a Medicare cost report, the covered entity submits to the Secretary a signed statement certifying that the services provided at the child site include or consist solely of outpatient services). (ii) HRSA deeming (I) In general If the Administrator of the Centers for Medicare & Medicaid Services has determined a site to be qualified as a provider-based entity and in compliance with the provider-based requirements under section 413.65 of title 42, Code of Federal Regulations (or any successor regulations), the Secretary shall deem the site to have met the requirements described in clause (i). (II) Rule of construction This clause shall authorize the Secretary to establish a process to determine whether a child site, as determined by the Administrator of the Centers for Medicare & Medicaid Services, complies with the Medicare provider-based rules under section 413.65 of title 42, Code of Federal Regulations (or any successor regulations). (iii) Process for registration The Secretary shall develop a process for the registration of child sites that are eligible for participation under clause (i) or (ii). (iv) Eligibility delay for certain child sites (I) Newly acquired sites (aa) In general Except as provided in item (bb), a child site acquired by a covered entity after the date of enactment of the SUSTAIN 340B Act that was not eligible to participate in the drug discount program prior to such date shall not be eligible to participate in the drug discount program under this section until the date that is 3 years after the date of such acquisition. (bb) Hardship exemption The Secretary may, on a case-by-case basis, determine that a newly acquired child site will be eligible to participate in the drug discount program under this section on a specified date within 180 days after the date of acquisition by the covered entity. (II) Newly constructed sites A newly constructed child site that began operations after the date of enactment of the SUSTAIN 340B Act shall not be eligible to participate in the drug discount program as described in clause (i) unless such site meets all of the requirements under this subparagraph. (C) Inappropriate treatment of a provider as a child site Not later than 180 days after the first recertification of the covered entity that occurs after the date of enactment of the SUSTAIN 340B Act, the Secretary shall establish a process through notice and comment rulemaking for determining the status of a child site that, prior to such date of enactment, was deemed qualified as a child site but that does not meet the criteria set forth in this subsection. (D) Reports (i) GAO report on program integrity Not later than 3 years after the date of enactment of the SUSTAIN 340B Act, the Comptroller General of the United States shall submit to the appropriate committees of Congress a report that analyzes relevant data, including data made available pursuant to subsection (d)(5), and makes recommendations with respect to any policies needed to address program integrity issues associated with child sites in the drug discount program under this section. (ii) HHS reports to Congress Not later than 2 years after the date of enactment of the SUSTAIN 340B Act, and every 2 years thereafter, the Secretary shall submit to the appropriate committees of Congress a report that analyzes the use of child sites in the drug discount program under this section, and that— (I) characterizes the scope and nature of child sites in the drug discount program under this section, including— (aa) the number of newly acquired child sites; (bb) the number of newly constructed child sites; (cc) the concentration of the child sites across geographic areas; and (dd) the payer-mix of the child sites; (II) assesses the effect of eligibility delays described in subparagraph (B)(iv); and (III) makes recommendations with respect to policies needed to address any issues identified in such report. (iii) GAO report on best practices Not later than 1 year after the date of enactment of the SUSTAIN 340B Act, the Comptroller General of the United States shall submit a report to the appropriate committees of Congress that— (I) analyzes input solicited from relevant stakeholders, including covered entities and manufacturers, regarding potential best practices for ensuring savings received by child sites through participation in the drug discount program under this section are used to meaningfully improve access to care, including by expanding access to health care services or health-related benefits for patients and communities served by the covered entity, including child sites of the covered entity; and (II) makes recommendations to the Secretary and appropriate committees of Congress with respect to implementation of best practices identified and analyzed pursuant to subclause (I).. (b) Recordkeeping Section 340B(a)(5) of the Public Health Service Act (42 U.S.C. 256b(a)(5)), as amended by section 4(b), is further amended by adding at the end the following: (F) Child site recordkeeping In the case of a covered entity that has registered a child site pursuant to paragraph (14), the covered entity shall maintain auditable records for a period of at least 3 years and be subject to audits by the Secretary of records that pertain to the compliance of the covered entity and child site with the provisions of paragraph (14)..