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340B MEGA GUIDANCE – WHAT NOW?HFMA REGION 6 DECEMBER 16, 2015
Brian [email protected]
Claire [email protected]
• The Health Resources and Services Administration (HRSA) has published the long-awaited 340B Drug Pricing Program Omnibus Guidance, more commonly referred to as the Mega Guidance. This presentation will cover recommended changes & clarifications to a number of 340B Drug Pricing Program items, including the Group Purchasing Organization (GPO) Exclusion, patient definition & Medicaid Managed Care Organizations (MCO)
MATERIAL COVERED TODAY
• This presentation has been designed to discuss certain proposed changes, as well as discuss areas where covered entities may see greatest impact to their 340B Drug Pricing Program (340B Program)
• This presentation should not be relied upon as legal advice
MATERIAL COVERED TODAY
Has your organization reviewed the Mega Guidance and analyzed how this may impact your 340B Drug Pricing Program?
Yes
No
Unsure
QUESTION 1
1994 19961992
2000 2010 20112012 2013
340B started with Public
Health Services Act
Guidance on outpatient
clinics released by HRSA
Audit guidelines established.
Patient definition clarified.Contract pharmacy process
established
Medicaid duplicate discount prohibitioncarve-in/carve-out
HRSA guidance on contract pharmacies allowing multiple
relationships.ACA expands eligibility to include five new entities
Orphan drug exclusion
HRSA begins audits & recertification process
established
GPO prohibition guidance
HRSA issues final rule on orphan drug exclusion
2014
Federal judge invalidates HRSA’s
orphan drug regulation
On August 28, 2015, HRSA
released 340B Omnibus Guidance (Mega Guidance)
EVOLUTION OF 340B
2015 Future• Compliance• Independent Audits – Quarterly• Auditable Records
340B PROGRAM OVERVIEW – PURPOSE
• Federally mandated drug pricing program• Part of Public Health Service Act, section 340B & Medicaid rebate program
Drug manufacturers must provide front-end discounts on covered outpatient drugs purchased by covered entities
• Provides discounts on outpatient drugs purchased by “safety net” providers for eligible patients
Intended to provide financial relief to facilities that provide care to medically underserved
• Average savings of 25 - 50% for eligible covered entities on outpatient drugs• Purpose of savings
Provide discounts on
drugs to patients
Expand services by provider to
patients
Provide services to more patients
HRSA AUDIT RESULTS
MANUFACTURER AUDITS
Manufacturer Audit Guidelines
May only conduct after showing of
“reasonable cause”
Manufacturer inquiries to covered
entity may help support
“reasonable cause”
Important for covered entities to
respond to manufacturer
inquiries, failure to respond could result
in audit
Details are not publicly available
Has your entity undergone an HRSA or manufacturer audit?
HRSA
Manufacturer
Both
Unsure
QUESTION 2
https://www.federalregister.gov/articles/2015/08/28/2015-21246/340b-drug-pricing-program-omnibus-guidance
TIMELINE & PROCESS• August 28, 2015 – Proposed guidance released by HRSA• October 27, 2015 – Comments on proposed guidance
were due Mega Guidance is proposed guidance & not formal regulation. HRSA
does not have formal rule-making authority; however, HRSA can issue interpretation &guidance. Guidance is currently proposed & may never be final interpretation
• Advocates & opponents that submitted comments 340B Health Pharmaceutical Research and Manufacturers of America American Hospital Association Healthcare Financial Management Association BKD also submitted comments
• Covered entities should be preparing to evaluate impact when finalized
GPO EXCLUSION CLARIFICATION• For hospitals enrolled as DSH, children’s hospital or
freestanding cancer hospital• This clarification extends GPO prohibition to any
pharmacy owned or operated by a covered entity registered as a DSH entity
• If a covered entity purchases from GPO as a last resort & documents appropriately, covered entity will not be considered in violation of GPO exclusion Extremely important due to drug shortages
• Prime vendor program is not considered a GPO subject to this prohibition
PATIENT DEFINITION• Service provided in a location not listed in 340B database is not
considered an eligible location
Ensuring child sites are registered will continue to be a critical compliance element
• An individual is not considered a covered patient of covered entity if his or her care is classified as inpatient & billed as inpatient
Historically, a patient who was in emergency room, observation or other outpatient area & was later admitted as an inpatient was eligible for 340B drugs up to time of admission
Prescription must be written or ordered while patient is classified as outpatient based on payor billing rules
• Prescriptions written as part of an inpatient stay (discharge prescriptions) often filled under meds-to-beds program or subsequently through contract pharmacy relationships are no longer considered 340B-eligible dispensations
PATIENT DEFINITION• An individual who receives follow-up care at a private practice (non-covered entity)
location is not eligible to receive 340B drugs• Individuals must receive health care services from a provider either employed by or
an independent contractor of covered entity such that covered entity may bill for services on behalf of provider Previously HRSA required that the provider be employed by, contracted with or had other
arrangements with the covered entity
• Faculty practice arrangements & established residency, internship, locum tenens & volunteer health care provider programs are examples of covered entity-provider relationships that would qualify
• Physician privileges or credentials at a covered entity are not sufficient to demonstrate an individual is a patient of the covered entity for 340B purposes
• Referral prescriptions will only be 340B eligible if eligible provider has written prescription
• Covered entity must maintain records of individual’s health care• Employees must qualify as an eligible patient & are not automatically 340B eligible
due to employment with covered entity• An individual would not be considered a patient of a covered entity whose only
relationship to individual is dispensing or infusion of a drug. Dispensing of or infusion of a drug alone, without a covered entity provider-to-patient encounter, does not qualify an individual as a 340B-eligible patient
Does your entity currently utilize contract pharmacy relationships?
Yes – more than five
Yes – less than five
No
Unsure
QUESTION 3
MEDICAID & MEDICAID MANAGED CARE• Covered entities are now able to make a determination for
both Medicaid Fee for Service & Medicaid Managed Care Organizations when determining to carve in or carve out Medicaid
• Prevention of duplicate discounts remains requirement of covered entity
• Critical for covered entity to maintain dialogue with state Medicaid agencies to prevent duplicate discounts
CONTRACT PHARMACY ARRANGEMENTS• HRSA defines a contract pharmacy as a pharmacy not
covered by covered entity or child site
• Under contract pharmacy arrangements, both Medicaid FFS & Medicaid MCO dispensations will be excluded from 340B Drug Program unless a well-documented plan from covered entity, managed care company & state Medicaid agency clearly states how duplicate discounts will be mitigated. Plan must be submitted to & approved by HRSA
INDEPENDENT AUDIT EXPECTATION• Mega Guidance emphasizes continued importance &
expectation of an annual independent audit being performed• HRSA is proposing standards for audits & quarterly reviews of
contract pharmacy arrangements to ensure compliance efforts result in Early identification of problems Implementation of corrections Corrective action plans Prevention of future compliance issues
• Maintain auditable data for a period of not less than five years
INDEPENDENT AUDITS – HRSA’S VIEW• HRSA believes covered entities that do not have regular
reviews and audits completed of their contract pharmacy operations are at increased risk for compliance issues
• Annual audit of each location will provide covered entities with Regular opportunity to review & reconcile 340B patient eligibility
information Prevent diversion
• Covered entity should compare 340B prescribing records with contract pharmacy’s dispensing records on at least a quarterly basis to prevent Diversion Duplicate discounts
• Conducting these audits using an independent auditor will ensure pharmacy is following all 340B program requirements & provide covered entity with ability to timely report any violations, if applicable
RECENT DEVELOPMENTS
• Orphan drug ruling
• Bipartisan Budget Act of 2015
Did your organization submit a comment letter on the proposed guidance on how you may be impacted?
Yes
No
Unsure
POLLING QUESTION 4
SEVEN KEY COMPLIANCE AREAS
WHAT ARE YOUR TOP RISKS RELATED TO 340B?
• Do you know what your top risks are?
• Do your risks include all your registered sites, contracting pharmacies, etc.?
• How do you plan to minimize these risks?
• How will these risks be identified?
COMPLIANCE – REGISTRATION
25 // experience
access
• Covered entity must register with HRSA
• Each eligible entity location that plans to use 340B drugs (clinic or offsite outpatient department) must be separately registered
• Information should be collected by the authorizing official during the annual recertification process
• Recertification process for all covered entity types is required annually or covered entity will be removed from the Program
• Authorizing official must attest to eight statements
COMPLIANCE – DIVERSION• Diversion
– Drugs can only be used on an outpatient basis for covered entity’s patients as defined by HRSA
– Use for other individuals constitutes prohibited diversion
– Focus on defining “patient” & “covered entity”
• What is “covered entity”?– Where services are provided
– Physicians must be employed or under a contractual or other arrangement
– Entity should have a listing of approved 340B physicians
26 // experience
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COMPLIANCE – DUPLICATE DISCOUNTS
• Duplicate discounts
– 340B laws prohibit application of both 340B price discount (front end) and payment of pharmacy rebate to state Medicaid (back end) on same drug claim
– General options for covered entities
• Carve-out Medicaid - from 340B drug purchases
• Carve-in Medicaid - requires verifying Medicaid exclusion file is accurate
– Medicaid managed care
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COMPLIANCE – DUPLICATE DISCOUNTS
• Medicaid duplicate discount
– Some states have been slow to establish and communicate Medicaid billing requirements and potential modifiers
– Transition to Medicaid managed care has created confusion
– Contract pharmacies should not “Carve-in” unless arrangement with state Medicaid exists
– Recommendation – Engage in ongoing dialogue with Medicaid pharmacy directors of the states where you file claims―a “win-win” solution may be available
THE RESPONSIBILITY FOR AVOIDING DUPLICATE DISCOUNTS IS ON THE COVERED ENTITY!!
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COMPLIANCE – CONTRACT PHARMACY
• Contract Pharmacy
– HRSA allows providers to enter into arrangements with
multiple contract pharmacies to dispense 340B drugs to
qualifying patients of providers
– Covered entity is responsible for compliance & must monitor
contract pharmacies
– HRSA recommends independent audits
29 // experience
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COMPLIANCE – GROUP PURCHASING ORGANIZATION
30 // experience
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GPO Restriction
• The GPO Prohibition pertains to DSH, Pediatric Hospitals and Cancer Centers
• Drug Purchases through GPO contracts cannot be used for outpatients covered by 340B
COMPLIANCE – CONSEQUENCES OF NOT COMPLYING
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• Understand how these proposed changes may impact your 340B Program Make certain to have up-to-date & robust
policies & procedures
Form a 340B compliance committee that meets several times a year• Include CEO, CFO, CNO, pharmacy, IT, medical records
Perform audits & compliance reviews regularly
Understand your 340B Program benefits & how those benefits are used by your covered entity
RECOMMENDATIONS
ADDITIONAL RESOURCES
QUESTIONS?
FOR MORE INFORMATION
THANK YOU!Brian Bell Claire TorrellaDirector [email protected] [email protected] 513.562.5558
