Legal Update, March 2020

Legal Update

Why and How HTCs Can Use Referral Arrangements in the 340B Program
By Elizabeth Karan

In a specialty area with constantly changing forms of treatment, hemophilia treatment centers (HTCs) may need to prepare for limited distribution networks from product manufacturers. In short, limited distribution networks mean that the manufacturer only will ship certain products to particular providers with which they contract. For HTCs not within these networks, this may mean that patients must go somewhere else to receive their preferred treatment. However, this does not necessarily mean that the HTC’s 340B Program cannot continue to serve the patient.

The patient definition in the 340B Program states that an individual must receive health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements such that responsibility for the care provided remains with the covered entity (61 Fed. Reg. 55156 (October 24, 1996). Therefore, if an HTC can document that it retained responsibility for the health care services provided to the referred individual, then that individual may be eligible to receive 340B drugs from the HTC. Importantly, HTCs’ written policies and procedures should address referrals under the 340B Program. Additionally, the use of 340B-purchased products still is limited to outpatient settings only.

In the context of a limited distribution network, an HTC wishing to retain a patient in their 340B Program, who goes to another entity for treatment, must enter into an arrangement with that entity. Such an arrangement must ensure that the HTC receives documentation of the care the patient received at the outside entity, which then is incorporated into the HTC’s records.

If both the HTC and the outside entity are eligible to participate in the 340B Program, only one may claim 340B eligibility on a specific product for a particular patient. As such, we recommend working together in advance of the care to resolve any issues specific to claiming 340B eligibility for a patient. Additionally, covered entities that utilize a replenishment model must have systems in place that ensure that the product provided was not already purchased under 340B and maintain auditable records that demonstrate compliance.

If you have questions regarding referrals in the 340B Program, please contact Elizabeth Karan at

Also in this Issue…

Notes from Joe
· Coronavirus Update

Alliance Update
· Webinars on COVID 19 and Changes in Healthcare
· Alliance Meeting for New HTC Personnel is Postponed
· Contract Data Reporting
· 2020 Meeting Schedule

Washington Update
· Policymakers Respond to COVID-19
· Virtual Hill Day Details

Payer Update

Notes from the Community
· Hemophilia Alliance Foundation Announces New “Large” Grant