omnibus guidance Reviewing six key points October 19, 2015 Lidia A. Rodriguez-Hupp SVP & 340B Compliance Officer

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1 omnibus guidance Reviewing six key points October 19, 2015 Lidia A. Rodriguez-Hupp SVP & 340B Compliance Officer Dawn C. DeAngelo Chief Pharmacy Officer

2 today s presenters Lidia A. Rodriguez-Hupp 340B Compliance Officer and SVP Dawn C. DeAngelo Chief Pharmacy Officer 2

3 disclaimer Please be advised that the information contained in this document and presentation is provided for reference purposes only. This information does not constitute legal advice and should not be construed as such. The content provided has neither been endorsed nor approved by the Office of Pharmacy Affairs, and is not dispositive in determining participatory status in, or compliance with, the 340B Drug Pricing Program. All clients and 340B stakeholders are solely responsible for determining compliance with the 340B Drug Pricing Program and any other applicable laws, regulations, or statutes. Sentry Data Systems, Inc. encourages each client and 340B stakeholder to enlist legal counsel in ensuring the integrity of its 340B policies and procedures. 3

4 topics for discussion The importance of commenting Six key points to consider: Prescriptions resulting from follow-up care and referrals Infusions administered at hospitals Discharge prescriptions Classification of outpatient medications Provider limitations Bundled drugs Tips for commenting 4

5 the importance of commenting

6 You must act now to protect 340B 6

7 help HRSA understand the impact Who to work with on your response > 340B Health > Attorneys > Compliance officers > Consultants > Internal 340B team Don t forget your legislators > Congressional Representatives > Senators Did you know? Legislators can comment any time even after the commenting period closes 7

8 drafting your comments Points to consider > How well does the proposed guidance reflect your business and clinical realities? > How will the proposed guidance affect your current processes, procedures and technology? What changes will be required? > What is the direct and indirect impact to the patients you serve? > Does the proposed guidance fall within HRSA s rule-making authority? > What is the overall financial impact for both mixed-use departments and contract pharmacy? 8

9 three ways to comment online (preferred) )) US mail Electronically via the Federal erulemaking Portal with RIN 0906-AB08 in the subject line Krista Pedley Director, OPA HRSA 5600 Fishers Lane Mail Stop 08W05A Rockville, MD

10 prescriptions resulting from follow-up care

11 proposed language An individual who sees a physician in his or her private practice which is not listed on the public 340B database or any other non-340b site of a covered entity, even as follow-up care at a registered site, would not be eligible to receive 340B drugs for the services provided at these non-340b sites. 11

12 what would change Follow-up care provided at a location outside the hospital/health center and child sites would not be considered an eligible patient care event Any prescription resulting from this care would not be 340B-eligible 12

13 what to consider > What are the situations when a patient is referred for follow-up care at an affiliated or non-reimbursable clinic or a physician s private practice? > What is the financial impact of prescriptions resulting from follow-up care? > What is the impact to patients if this proposed change is made? 13

14 infusions administered at hospitals

15 proposed language An individual would not be considered a patient of a covered entity whose only relationship to the individual is the dispensing or infusion of a drug. 15

16 what would change Infusions prescribed or ordered outside the hospital would be excluded even when administered at the hospital 16

17 what to consider > This ignores the fact that the hospital is providing a clinical service that depends upon several statelicensed practitioners coordinating services on the patient s behalf no different than physical, speech or occupational therapy > Carving out infusion services for the purposes of 340B is a radical departure from years of clinical and billing standards applied to Medicare and Medicaid services 17

18 what to consider > What would be the financial impact of buying those specific infusion drugs at WAC pricing? > What would be the impact to your patients? 18

19 discharge prescriptions

20 proposed language... an individual cannot be considered a patient of the entity furnishing outpatient drugs if his or her care is classified as inpatient. 20

21 what would change No discharge prescriptions resulting from an inpatient discharge would be 340B-eligible even if the drug is filled, used and billed on an outpatient basis 21

22 what to consider > This contradicts HRSA s current guidance that 340B drugs can be used for discharge prescriptions to the extent that the drugs are for outpatient use. > What would be the impact on medication adherence and readmissions? > If you have a 340B cash card program, or other prescription subsidy program, how would it be affected by this change? 22

23 classification of outpatient medications

24 proposed language An individual is considered a patient if his or her health care services is billed as outpatient to the patient s insurance or third-party payor. 24

25 what would change Drugs provided to outpatients would not be 340B-eligible if those services end up being billed as inpatient Examples: the Medicare 72-hour rule, observation days or other factors 25

26 what to consider > The determination of inpatient versus outpatient services would be determined by the way the service is billed, not the patient s status at the time the service is provided > How realistic is it to rely upon a third-party payor s determination to classify a patient s status at the time of service, when we have a proven and reliable method that meets the current definition for patient status at time of service? 26

27 what to consider > The covered entity would be required to maintain auditable records to document changes in patient status due to insurer determinations even though there are currently no standards for doing so > How would you manage this operationally, across 30,000 different self-insurance plans, 835 insurance companies, and more than 24,000 different insurance policy types? 27

28 provider limitations

29 proposed language The individual receives a health care service provided by a covered entity provider who is either employed by the covered entity or who is an independent contractor for the covered entity, such that the covered entity may bill for services on behalf of the provider. 29

30 what would change You would need to exclude all prescriptions written by providers who are not employees or independent contractors of the covered entity and where the covered entity may not be billing on behalf of the provider 30

31 what to consider > This language contravenes the initial guidance > The change could significantly decrease the number of eligible providers writing 340B prescriptions and the number of patients who ultimately benefit from the 340B program > What would be the financial impact to your organization? > Which services could suffer as a result of this change? 31

32 what to consider > This proposed change does not adequately consider the realities of healthcare, where employed physicians and independent contractors are a minority of hospital medical staff > Only allows for the following arrangements: Faculty practice arrangements Residency and intern programs Volunteer health care provider programs 32

33 what about... > State statutes that specifically prohibit hospitals from employing providers, such as in California and Texas? > Physicians contracted under a professional organization? > A hospital contracted with a group practice for clinical positions, such as emergency physicians, hospitalists, anesthesiologists, or radiologists? 33

34 bundled drugs

35 proposed language Further, the limiting definition in section 1927(k)(3) to exclude covered outpatient drugs for purposes of the 340B Program only applies when the drug is bundled for payment under Medicaid... 35

36 what would change You would need to exclude all Medicaid bundled drugs 36

37 what to consider > How would you track Medicaid bundled separately from all bundled drugs? > How would you monitor and manage hard-totrack drugs like anesthesia gases, IV fluids and contrast media? > What would be the financial impact of purchasing these drugs on GPO or WAC if you cannot track them separately? 37

38 tips for commenting

39 be proactive Consult Prepare Consider Share with subject matter experts first to determine your talking points and get required approvals comments on behalf of each hospital and child site, rather than one set of comments for multiple sites how the six critical aspects of the proposed guidance will affect each site your response with your state legislators so they know how the proposed guidance could impact your ability to provide crucial patient services 39

40 You must act now to protect 340B 40

41 estimating the financial impact > You should have received this from us with instructions for requesting a financial impact report > Reach out to the 340B Compliance and Audit Team for help: 340BTeam@sentryds.com 41

42 three ways to comment online (preferred) )) US mail Electronically via the Federal erulemaking Portal with RIN 0906-AB08 in the subject line Krista Pedley Director, OPA HRSA 5600 Fishers Lane Mail Stop 08W05A Rockville, MD

43 how to submit comments online Go to federalregister.gov Do a search for 340B and click on first result: 340B Drug Pricing Program Omnibus Guidance Submit comments on behalf of each hospital and child site Commenting period ends October 27,

44 Contact your legislators They can continue to comment after the commenting period ends 44

45 Sentry is here for you In addition to helping you estimate financial impact 340B Health partnership and Alliance support Provides strengthened bench support Attends educational programs on changes Proactively reviews system to plan for anticipated changes Offers meetings at ASHP and 340B Coalition Monitors future audit activity related to proposed changes 45

46 thank you sentry data systems, inc. 800 Fairway Drive, Suite 400 Deerfield Beach, FL phone 2015 Sentry Data Systems, Inc. All rights reserved. No unauthorized reproduction. About Sentry Data Systems, Inc. We provide technology solutions that help hospitals address their three biggest challenges: reducing costs, managing compliance and producing better outcomes.

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