[Federal Register Volume 61, Number 207 (Thursday, October 24, 1996)]
[Notices]
[Pages 55156-55158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27344]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Resources and Services Administration
[0905-ZA92]
Notice Regarding Section 602 of the Veterans Health Care Act of
1992 Patient and Entity Eligibility
AGENCY: Health Resources and Services Administration, HHS.
ACTION: Final Notice.
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SUMMARY: Section 602 of Public Law 102-585, the ``Veterans Health Care
Act of 1992,'' enacted section 340B of the Public Health Service Act
(``PHS Act''), ``Limitation on Prices of Drugs Purchased by Covered
Entities.'' Section 340B provides that a manufacturer who sells covered
outpatient drugs to eligible entities must sign a pharmaceutical
pricing agreement with the Secretary of Health and Human Services in
which the manufacturer agrees to charge a price for covered outpatient
drugs that will not exceed an amount determined under a statutory
formula.
The purpose of this notice is to inform interested parties of final
guidelines regarding a definition of covered entity ``patient.''
FOR FURTHER INFORMATION CONTACT: Annette Byrne, R.Ph., Attn: Drug
Pricing Program, Bureau of Primary Health Care, 4350 East-West Highway,
10th Floor, Bethesda, MD 20814, Phone (301) 594-4353.
EFFECTIVE DATE: October 24, 1996.
SUPPLEMENTARY INFORMATION:
(A) Background
Proposed guidelines were announced in the Federal Register at 60 FR
39762 on August 3, 1995. A period of 30 days was established to allow
interested parties to submit comments. The Department received 15
letters including comments concerning legal authority for developing
the proposed guidelines and a need for a more specific definition.
Comments were received on issues not within the scope of the definition
of covered entity ``patient'' and were not addressed.
The following section presents a summary of all major comments
relevant to the definition of ``patient'' and a response to each
comment. The guidelines are adopted as proposed.
(B) Comments and Responses
Comment: The Federal Register notice was not promulgated in
accordance with the Administrative Procedure Act (APA) and contains
procedural irregularities. The Department has issued eight Federal
Register notices containing drug pricing program guidelines and has not
proposed a single regulation pursuant to APA requirements. Because of
this, the program guidelines are invalid.
Response: During the early months following enactment, it became
clear that there were many gaps in the legislation and some form of
program structure was necessary to move the program forward. There were
approximately 11,500 eligible entities, 500 participating
manufacturers, numerous wholesalers and many Federal programs affected
by this legislation and all seeking guidance. It was incumbent upon the
Department, acting through the Health and Resources and Services
Administration, Bureau of Primary Health Care, Office of Drug Pricing
(ODP), to implement this difficult congressional mandate in an
expeditious manner.
Interpretive rules and statements of policy were developed to
provide necessary program guidance. The Department has published these
guidelines in the Federal Register, used a Federal review process
(including review by the Office of Management and Budget) and provided
a public comment period to obtain both Federal as well as public input
into guideline development. The Department considered all comments in
developing these final guidelines.
The guidelines explain how the Department intends to administer the
340B program, further explain the statutory language by clarifying the
meaning given by the Department to particular words of phrases, and do
not exceed the purpose of 340B or conflict with any of its provisions.
We believe that these guidelines create no new law and create no new
rights or duties; therefore, they are not subject to the Administrative
Procedure Act's requirement of notice and comment. Nevertheless, the
Department chose to solicit and respond to public comment.
Comment: The Federal Register notice has not complied with the 60
day comment period required by the Social Security Act, 42 U.S.C.
1395hh(b).
Response: Section 340B is part of the Public Health Service Act,
and its implementation is not subject to the provisions of the Social
Security Act.
Comment: The definition of a ``patient'' is ambiguous and difficult
to
[[Page 55157]]
administer from a drug diversion standpoint.
Response: The definition of a ``patient'' was developed in order to
identify those individuals eligible to receive 340B drugs from covered
entities. Because of the large number of covered entities and the wide
diversity of eligible groups (e.g., hemophilia, HIV, black lung,
migrant health, and family planning services), it was essential that we
work closely with each Federal program office to develop a definition
flexible enough to describe accurately each covered entity's patient
while at the same time not excluding eligible patients. In addition,
not only comments received in response to this notice but also comments
from prior Federal Register notices (59 FR 25111, May 13, 1994, and 59
FR 47886, September 19, 1994) were incorporated into the definition. By
using such input, we are confident that the definition will assist
covered entities and manufacturers in determining which individuals are
eligible to receive 340B drugs.
Comment: Covered entities should be required to restrict purchases
to drug products that are directly related to the provision of services
for which Federal funding has been provided.
Response: We do not consider a limitation on which drug products a
covered entity may purchase to be a reasonable component of the
definition of covered entity ``patient.'' To the extent that purchasing
certain drugs would contravene a Federal or State law or certain PHS
grant principles (and this information is brought to the Department's
attention), the Department reserves the right to take such action as it
deems appropriate.
Comment: The definition of a ``patient'' establishes a requirement
that a State must register eligible individuals who may then receive
services for which funding has been provided under Title II of the Ryan
White Act of 1990.
Response: The proposed patient definition does not impose a new
requirement that States register individuals as eligible for benefits
under the Ryan White Act. Instead, the definition reflects the States'
current practice of recording and verifying patient eligibility through
a registration mechanism. An individual listed in a State Ryan White
Title II drug assistance program will, for purposes of the patient
definition, be considered a patient of the entity.
Comment: The definition would permit a patient to obtain one
medical treatment from a covered entity at any time in his or her
lifetime and then continue (forever) to purchase drugs through
prescription refills by using such services as mail order. The proposed
patient definition should require that a covered entity patient be
currently receiving care, and an additional section should be added to
address the frequency of medical care.
Response: All covered entities must establish a relationship with
their patients such that the entity will maintain records of the
individuals' health care. The entity will document in the record the
care provided and, when appropriate, the prescriptions written. It
would be inappropriate for the Department to proceed further and
dictate to health care providers guidelines regarding the
appropriateness of certain prescriptions. We understand that States
typically regulate the refilling of prescriptions.
Comment: Employees of covered entities should be either
specifically precluded or included as eligible patients to receive
discounted drug products.
Response: Any employee of a covered entity who meets the criteria
of the definition of covered entity ``patient'' would be eligible to
access 340B pricing.
Comment: Private patients of a physician who is under a contract to
provide services to a covered entity should be considered patients of
the entity.
Response: Entity health record documentation (section one of the
patient definition) and responsibility for care provided (section two
of the patient definition) must remain with the covered entity. A
physician, under contract with a covered entity, may see an individual
and provide care for a medical indication. However, if care is provided
outside of the contractual arrangement with the covered entity, the
individual would not be considered a patient of the entity.
Comment: The pharmacy of a covered entity should be required to
have access to the records of the individual's health care maintained
by the entity.
Response: This type of requirement deals with the professional
practice of pharmacy and not with the issue of identification and
clarification of who is or is not a patient.
Comment: The phrase in section one of the patient definition is not
clear as to if ``records of the individual's health care'' is
equivalent to the term ``medical record(s).''
Response: The phrase ``records of the individual's health care''
was specifically used to avoid the term ``medical record,'' as the
latter term may have different meanings in various locations. In
addition, some covered entities may not, at the present time, use
health records that comply with certain legal definitions of the term
``medical record.'' The wording permits the use of health care
documentation presently contained in a ``medical record,'' if such is
the current health record system maintained by an entity.
Comment: The requirement in section one of the patient definition
that ``the covered entity maintain records of the individual's health
care'' could establish a requirement that such health records be
centralized at one location.
Response: The requirement that covered entities maintain the
records of an individual's health care does not establish a requirement
that such health records be centralized in one location.
Comment: The exclusion of individuals who receive no health care
services from the covered entity other than the dispensing of a drug
for subsequent self-administration or administration at home may
exclude otherwise legitimate patients from receiving ``refills'' of
prescribed medications previously authorized by the covered entity's
health care provider.
Response: A ``refill'' of a medication previously prescribed by an
authorized entity health care provider, as part of the health care
services provided by the covered entity, would meet the requirements of
the patient definition. The ``refill'' would be a continuation of
responsibility for the health care services provided by the covered
entity. The covered entity would document the initial prescription for
treatment in the record of health care, and the ``refill'' would be
part of the range of health care services provided.
(C) Definition of a Patient
An individual is a ``patient'' of a covered entity (with the
exception of State-operated or funded AIDS drug purchasing assistance
programs) only if:
1. the covered entity has established a relationship with the
individual, such that the covered entity maintains records of the
individual's health care; and
2. the individual receives 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 (e.g. referral for
consultation) such that responsibility for the care provided remains
with the covered entity; and
3. the individual receives a health care service or range of
services from the covered entity which is consistent with the service
or range of services for which grant funding or Federally-qualified
health center look-alike status
[[Page 55158]]
has been provided to the entity. Disproportionate share hospitals are
exempt from this requirement.
An individual will not be considered a ``patient'' of the entity
for purposes of 340B if the only health care service received by the
individual from the covered entity is the dispensing of a drug or drugs
for subsequent self-administration or administration in the home
setting.
An individual registered in a State operated or funded AIDS drug
purchasing assistance program receiving financial assistance under
title XXVI of the PHS Act will be considered a ``patient'' of the
covered entity for purposes of this definition if so registered as
eligible by the State program.
Dated: October 21, 1996.
Ciro V. Sumaya,
Administrator, Health Resources and Services Administration.
[FR Doc. 96-27344 Filed 10-23-96; 8:45 am]
BILLING CODE 4160-15-P