beyond the pharmacy Common 340B program concerns for hospitals
Making sure expectations meet realityMarch 13, 2015
Lidia A. Rodriguez-HuppSVP & 340B Compliance Officer
Christopher BolesRegional VP, Sales
CONFIDENTIAL | © 2015 Sentry Data Systems, Inc. | No unauthorized reproduction.
course overview
340B overview: compliancethrough the years
Developing policies and procedures to address compliance risks
Enforcingcompliance with HRSA audits
Tailoring a compliance plan for your organization
340B compliance: it’s everybody’s business
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the intent of 340B
To stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services*
* H.R. Rep. No. 102-384(II), at 12 (1992)
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what is 340B
A federal drug discount program that requires manufacturers to provide outpatient drugs at greatly discounted prices to covered hospitals or entities
locationsstrictly-outpatient settingsPhysician-owned clinics
mixed-use settingsDepartments such as ED,where patients can be bothinpatient and outpatient
OP discharges toOP pharmaciesHospital-owned or contractpharmacies, such as CVS orWalgreens
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recertify
register
to participate in 340B, an entity must
ensure it has the capability to follow and maintain auditable records documenting compliance with program rules
on the HRSA 340B database
with HRSA 340B annually
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annual 340B recertification
> Offsite clinics and departments associated with a child site of a parent hospital must individually register as child sites of the covered entity• Even when they share the same building or have been registered
previously as a single child site
> Outpatient clinics and individual parent hospital departments do not need to register separately • Must maintain auditable records
As of 2012, HRSA rules require that all covered entities recertify their compliance with all 340B program rules on an annual basis
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340B GPO and orphan drug
Applies to less than 500 of the 2,600 drugs with orphan status
Requires participating entities to track use, ensure drugs are not purchased under 340B for those conditions and diseases it has received orphan drug designation, and maintain auditable compliance records
Drugs can be sold at 340B prices if being used to treat conditions/ diseases other than those for which the drug received designation
The GPO prohibition pertains to these entities:
Drug purchases through GPO (Group Purchasing Organization) contracts cannot be used for outpatients covered by 340B
The orphan drug exclusion pertains to:
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historical review of audits*
*134 of the 145 HRSA audits have posted results
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HRSA audits
> Number of outpatient facilities
> Number of contract facilities
> Complexity of the 340B program
> Volume of 340B purchases
> Parent sites in the program for more than 1.25 years are not subject to audit selection through risk-based factor
Risk-based factors related to selection include: Target audits
focus on specific violations or allegations regarding diversion or duplicate discount
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avoiding duplicate discountsDrug manufacturers cannot be subject to both the 340B discount and the Medicaid rebate. Hospitals dispensing outpatient drugs in a mixed-use setting must choose either a carve-in or carve-out policy to prevent double discounts
Covered entities (CEs) decide they will use 340B-priced drugs for their Medicaid patients in the outpatient settingCEs must submit billing transactions with 340B acquisition prices for the drugs being dispensed
Depending on the entity type, CEs decide they will use either wholesaler acquisition cost (WAC) or their GPO account for their Medicaid patients in the outpatient setting340B drugs are only dispensed to non-Medicaid outpatients
carve-in carve-out
Note: Contract pharmacies primarily exclude Medicaid and Medicaid Managed Care, unless under other arrangement with the state.
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GPO exclusion
> The hospital should establish a non-340B, non-GPO (e.g., wholesale acquisition cost (WAC)) account for instances where drugs cannot be purchased using the hospital’s 340B or GPO account
> First purchase of any outpatient NDC should be made using a WAC account
> CII narcotics
DSH, children’s and freestanding cancer hospitals are prohibited from obtaining covered outpatient drugs through group purchasing organization (GPOs)
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patient eligibility and diversion
> This includes ineligible facilities and excluded services within the covered entity
> The covered entity must consider: • Mixed use settings • Covered and non covered areas within same facility • Inventory tracking systems and audit trails • Security and theft risks
Anti-diversion requirements prohibit the resale or transfer of 340B outpatient discounted drugs to individuals not considered patients of the covered entity
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eligibility requirements
Patient• Has an established relationship with
the CE, which maintains care records• Receives an outpatient service from
an eligible provider• Excludes lab and diagnostic-only
services
Provider• Employed by, or under contractual
arrangement with, the CE • Provides care to the patient
Drug• The drug is on the 340B list,
limited to outpatient use and provided to an eligible patient
Location• The location is 340B eligible and above
the line on the Medicare cost report
Medicaid• Carve-in or carve-out considerations
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where GPO can be used
> In the hospital’s inpatient areas
> In certain offsite outpatient facilities if the following criteria are met:• Located at a different physical address• Not registered on the 340B database• The hospital maintains records demonstrating that
drugs purchased through the GPO are not utilized or otherwise transferred to the parent hospital or registered outpatient facilities
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Medicaid and duplicate discounts
> Double-dipping occurs when a state seeks a Medicaid rebate on the same drug a manufacturer sold to a CE at a discounted price under the 340B program.• Double-dipping prohibition puts onus on the CE and the state
> OPA Medicaid exclusion files: CE must include provider numbers if they are billing Medicaid (carve-in) and the state must check file prior to applying for rebates.
Review federal and state policy
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contract pharmacy agreements
> All contract pharmacies are registered with OPA and appear on the OPA website
> The CE has the accountability for compliance with 340B program requirements
> Patients are free to choose any pharmacy
> Hospital is billed for 340B drugs shipped to contract pharmacy
Agreements should address all compliance elements suggested by HRSA Contract
pharmacy registration deadlines
10/15 for 1/1/14 listing
1/15 for 4/1/14 listing
4/15for 7/1/14 listing
7/15 for 10/1/14 listing
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what happens in a HRSA audit
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OPA / HRSA audit components
> Medicaid testing
> Split-billing software review
> Program registration review
> Policies & procedures review
> Adherence to the GPO prohibition
> Interview of key hospital participants
> Patient testing and tracking for eligibility
> Program understanding and resource allocation
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evaluating your 340B solutions
Looking under the hood
Reports
Does your solution offer easy-to-assess reporting that can be set to run automatically?
Audit tool
Does your solution offer a built-in, easy-to-use audit tool?
Configuration options
Does your solution offer multiple configuration options to meet the unique needs of your organization?
Compliance / audit support team
Does your vendor offer you support and a dedicated team to assist you and your consultants?
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data required for audits
Provider file
340B inventory
Organizational chart
340B purchase orders
Contract pharmacy listing with contracts
340B certification documentation
> Drug
> Payer
> NCD number
> Provider name
> Unique ID number
> Patient ID number
> 340B acquisition price
> Quantity dispensed or issued
Plus six months of drug data:
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fundamental elements
Develop and adhere to policies and procedures that configure to vendor software
Provide appropriateemployee education and training
Investigate and report detected offenses and develop an action plan
Develop and follow through on enforcement of disciplinary standards
Create an environment ofopen communication and information sharing
Enlist senior leadership as part of your multidisciplinary compliance team
Continue to demonstrate the community benefit that is a direct result of your 340B-generated savings
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annual monitoring and auditing
> If using vendor software, learn how the solution is configured • Does the configuration align with your organization’s P&Ps?• Some software vendors have tools and staff to assist you
in self audits/mock audits and can provide training on their systems for your consultants.
> Understand the reports available from your 340B vendor system, the information contained in them and the suggested frequency of review
> Do not assume staff are accessing reports
Perform an annual review of overall systems and a monthly sampling of dispensations
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responsibilities (HRSA website)
> Prevent duplicate discounts
> Prevent diversion to ineligible patients
> Maintain auditable records documenting compliance
> Keep 340B database information accurate and up to date
> Register new outpatient facilities and contract pharmacies (if applicable)
> Recertify eligibility every year
> Not participate in a GPO for covered outpatient drugs (as applicable to particular CE)
To purchase drugs at the 340B price, covered entities must:
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stakeholder involvement
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ongoing learning support
• Your state association
• 340B University• SNHPA
• HMFA• Others
Continually educate your internal resources on current federal and state policies
Encourage annual and as-needed education, much like we do for HIPAA and other areas
Make resources available including conferences, webinars, articles and reports
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references
> 340B Drug Pricing Updates: Healthcare Accounting News http://www.fdcpa.com/Healthcare/0214-healthcare-340b-drug-pricing-program-updates.htm
> Program Integrity Audit Results: http://www.hrsa.gov/opa/programintegrity/auditresults/index.html
> Orphan Drug List http://www.accessdata.fda.gov/scripts/opdlisting/oopd/index.cfmOR http://www.hrsa.gov/opa/programrequirements/orphandrugexclusion/orphandruglist.pdf
> Recertification Overview http://www.hrsa.gov/opa/programrequirements/recertification/index.html
> Database Guide to Recertification http://opanet.hrsa.gov/opa/Manuals/OPA%20Database%20Guide%20for%20Public%20Users%20-%20Recertification.pdf
> SNHPA 340B compliance checklist, last updated October 18, 2013: contact SNHPA at 202.552.5851
> Accountable vs Responsible http://www.diffen.com/difference/Accountability_vs_Responsibility
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