Healthcare Non-Labor Cost Reduction

On March 15, 2022, President Biden signed the 2022 Consolidated Appropriations Act into law. In addition to funding the federal government for the remainder of fiscal year 2022, the act will protect some hospitals from losing 340B Drug Pricing Program (340B) eligibility due to COVID-19. This includes hospitals that already lost eligibility during the pandemic by reporting a DSH percentage lower than what is required to participate in the 340B Program.

The provisions will protect:

  • Disproportionate share hospitals (DSH)
  • Freestanding children’s and cancer hospitals (PED & CAN)
  • Rural referral centers (RRC)
  • Sole community hospitals (SCH)

For hospitals that have not lost eligibility but will upon filing a new Medicare cost report, the protection will begin the date the cost report is filed. Retroactive relief will not be provided for hospitals that previously lost eligibility. Relief was effective as of March 15, 2022. In addition, the hospital is required to have participated in the 340B Program prior to the start of COVID-19 (recognized as January 31, 2020).

Attestation must be provided to the U.S. Department of Health & Human Services (HHS) regarding how COVID-19 impacted the hospital's ability to meet the DSH requirements.

  • If your hospital already lost eligibility, you must submit an attestation within 30 days of the law’s date of enactment (March 11).
  • If your hospital will lose eligibility upon filing a new Medicare cost report, an attestation must be submitted within 30 days of filing the new report with an insufficient DSH adjustment percentage.
  • This form will be used to complete the attestation.

It is expected that the Health Resources & Services Administration (HRSA) is reaching out to impacted covered entities. If you believe your hospital may be eligible for this exception and have not yet been contacted by the HRSA, contact the 340B Prime Vendor Program at 1.888.340.2787 (Monday through Friday, 9 a.m. to 6 p.m. Eastern time) or Requests will be evaluated on a case-by-case basis.   

All protections will end on December 31, 2022. If you have any questions or require assistance, please reach out to your advisor or submit the Contact Us form below.  

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