How the 340B "Mega Guidance" will affect your FQHC or Look-Alike

The Draft 340B Drug Pricing Program “Mega Guidance” is an attempt by HRSA to provide clarification relating to 340B implementation. Our analysis addresses the issues which have the greatest potential to affect FQHC programs. This “Mega Guidance” strongly confirms a number of positive issues relating to the program; however the focus is largely on compliance and abuse prevention.  While we support and applaud this effort, in some cases there will likely be potentially detrimental effects to our programs and the patients we serve. 

This Draft Guidance:

• Reaffirms the stated intent of 340B to provide financial support to covered entities so they can “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

• Restricts the definition of an eligible patient for 340B purposes, effectively preventing drugs prescribed by non-FQHC providers from being 340B eligible as they now are.

• Reinforces the concept that the covered entity has the ability to “carve-in” or “carve-out” 340B coverage by site for both fee-for-service and managed Medicaid plans, effectively subordinating Medicaid rebates to 340B discounts.

• Potentially prevents Medicaid recipients from obtaining 340B medications from pharmacies who contract with covered entities such as FQHCs.

• Increases record retention requirements to five years, potentially discouraging independent pharmacies from contracting with 340B covered entities.

• Warns covered entities that contract with pharmacies of potentially increased enforcement of anti-kickback and other violations of program conditions.

• Outlines significantly increased audit expectations.

While the language appears daunting at times, we hope that the FQHC community will take the time to understand the proposed changes, and submit comments by October 27, 2015, in accordance with the instructions provided in the Draft “Mega-Guidance.”  For more information, you can download our Full Analysis of the Draft Guidance, as well as the Complete Document as posted in the Federal Register.


Steve Weinman is a Vice President at FQHC Germane, a health care consulting firm specializing in the needs of established, new and potential Federally Qualified Health Centers (FQHCs).

Read more about Steve here.

To contact Steve, email him at sdweinman@fqhc.org.