Legal Update. Michael B. Glomb, Partner Marisa Guevara, Associate Elizabeth Issie Karan, Associate September 22, 2015
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1 Legal Update Michael B. Glomb, Partner Marisa Guevara, Associate Elizabeth Issie Karan, Associate September 22, 2015
2 LEGAL DISCLAIMER This presentation is educational in nature and does not constitute legal advice. Our opinions are our own. 2
3 TOPICS FOR TODAY Program Integrity Compliance Audits Program Income Patient Assistance Patient Inducement 3
4 WHAT IS PROGRAM INTEGRITY? HHS: reduc[ing] improper payments in the major programs administered by HHS, while continuing to ensure that HHS programs serve and provide access to their intended beneficiaries. HRSA: ensur[ing] that Federal grant dollars are spent in the way that they are intended. It requires compliance with program expectations, efficient use of Federal funds and fiscal responsibility. 4
5 WHAT DOES PROGRAM INTEGRITY LOOK LIKE? Program integrity is: Compliance Documentation Oversight What are risk areas for HTCs? Audits Program Income Patient Inducement 5
6 AUDITS Who has authority to audit 340B operations of an HTC? A) OPA B) BPHC C) Manufacturers D) States E) A and C F) All of the Above 6
7 AUDIT TRENDS 2012: OPA audited 51 covered entities 2015: OPA on track to audit ~200 covered entities 7
8 AUDIT SANCTIONS AND FINDINGS Key Audit Findings Duplicate Discount Diversion Site Registration Auditable Records HRSA Sanctions Corrective action Manufacturer Repayment Penalties for knowing and intentional diversion Removal and/or disqualification from 340B Program 8
9 AVOIDING AUDIT FINDINGS AND SANCTIONS 340B Program policies and procedures Review contract pharmacy arrangements Routine self-auditing Check the 340B Database Monitor contract pharmacies Review state-specific requirements Preventing Duplicate Discounts Watch for changes in the law Mega-Guidance 9
10 PROGRAM INCOME The following are considered program income for an HTC under an HTC grant: A) 340B revenue B) Medicare and Medicaid payments C) Private grants D) State Grants E) A and B F) All of the Above 10
11 WHAT IS PROGRAM INCOME? Program income is gross revenue earned by the non-federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (45 C.F.R. 75.2) 11
12 HRSA GUIDANCE ON PROGRAM INCOME Program income includes income that a grant recipient or sub-recipient earns as the result of a benefit made possible by receipt of the grant or grant funds Meaning income as a result of drug sales when an HTC is eligible to buy the drugs because it has received a Federal grant is program income 12
13 PROGRAM INCOME The following are considered program income for an HTC under an HTC grant: A) 340B revenue B) Medicare and Medicaid payments C) Private grants D) State Grants E) A and B F) All of the Above 13
14 PATIENT ASSISTANCE What can an HTC give a patient? A) Transportation to appointments B) A new car C) Pamphlets on health maintenance D) Coupons for spa services E) All of the above F) Likely A and C but consult a lawyer! 14
15 PATIENT INDUCEMENT BASICS The Civil Monetary Penalties Law (CMP) prohibits offering or transferring remuneration to a beneficiary of a federal health care program to influence beneficiary selection of a provider Enforced by the Office of the Inspector General in HHS OIG Advisory Opinions 15
16 BENEFICIARY INDUCEMENT EXCEPTIONS Nominal value Limit: $10 per gift and $50 per year Preventive Care Services Incentives given to promote delivery of preventive care services Preventive care services are defined narrowly by the US Preventive Services Task Force Promoting Access to Care Remuneration that promotes access to care and poses a low risk of harm Added under the Affordable Care Act and has been interpreted to allow transportation expenses Final Guidance anticipated November
17 PATIENT ASSISTANCE What can an HTC give a patient? A) Transportation to appointments B) A new car C) Pamphlets on health maintenance D) Coupons for spa services E) All of the above F) Likely A and C but consult a lawyer! 17
18 CONCLUSION Summary Document What and why you do what you do Monitor Are you doing what you say you do? Ask Questions Questions? 18
19 CONTACT INFORMATION Michael B. Glomb Marisa Guevara Elizabeth Karan Feldesman Tucker Leifer Fidell LLP th Street NW, 400 Washington DC
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