Jeremiah McWilliams, PharmD
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1 Jessica Blackburn Vice President, 340B Advisors, LLC Attorney, Pointer Law Office, P.C. Jeremiah McWilliams, PharmD Senior Director, 340B Account Services Wellpartner, Inc
2 HRSA Audits began 2012 Total audits between = ~400 74% of audits have been of hospitals 80% had a finding 2015 Findings: Diversion Duplicate discount Inaccurate database record Eligibility
3 Notification Pre-Audit Data Request Onsite Audit Post Audit
4 Letter to Authorizing Official Objective of audit Policies/procedures Eligibility GPO Compliance Drug Procurement Duplicate Discount Outline of Audit Process Regional auditor Onsite audit needs Workspace, internet, access to required 340B documents
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7 Length 1-3 days typical Process Review B eligible claims 30 contract pharmacy Want to see physical prescriptions 30 in-house/mixed-use Discuss 340B policies Visit with buyer(s) Visit contract pharmacies Visit child-site
8 Diversion means: a drug is provided to an individual who is not a patient of that entity Section 340B(a)(5)(B) of the PHSA Required to follow patient definition guidelines -61 Fed. Reg (October 24, 1996) Elements of patient definition
9 Covered entity has a relationship with the individual and maintains records of the individual s health care Make sure the episode of care resulting in each 340B drug is supported by health care records maintained by the covered entity Covered entity health care records Individual receives health care services from a health care professional Employed by entity; or Under contractual or other arrangements (e.g., referral for consultation) with entity
10 Duplicate Discount = Receiving the 340B Discount and Medicaid rebate on same drug Medicaid Exclusion File on HRSA s public website Medicaid Exclusion File must be complete and accurate Carve-In = use 340B drugs when billing Medicaid Carve-Out = do not use 340B drugs to bill Medicaid If contract pharmacy uses 340B drugs to bill Medicaid, the CE must make arrangements with contract pharmacy and state Medicaid agency and MUST notify OPA Covered entity must know how they bill Medicaid and how state prevents duplicate discounts
11 Definition of Eligible Safety Net Providers Hospitals - Medicare Cost Report Additional Hospital Eligibility Issues Non-profit Contract with State or Local Government (most hospitals) Compliance with GPO Prohibition (DSH) Hospitals - Medicare Cost Report Covered Entity must register all outpatient facilities that purchase dispense, administer or other otherwise generate 340B eligible prescriptions Key Documents Hospitals Medicare Cost Report
12 Verify accuracy of all information on 340B database For each site registered: Entity name and addresses Authorizing Official Primary Contact Medicaid Exclusion File Orphan Drug Exclusion (if applicable) Contract pharmacies (if applicable) Signed written contract with every location specified within the contract Meets all required elements in contract
13 Current turnaround: approximately 3 months following audit. Will set forth Findings and Areas of Improvement Findings must be addressed in appeal or corrective action plan; areas of improvement do not. Deadlines Appeal: 30 days Submission of Corrective Action Plan (CAP): 60 days HRSA may grant an extension HRSA may provide template for the CAP, complete with each item to be addressed.
14 Plan of action to correct problems which led to findings Process for periodic assessment (i.e., external audits) Policies and Procedures Plan to contact manufacturers Continuous monitoring (i.e., internal audits with description of process, frequency and sample size) Internal communication and education strategy within and across departments Completion dates Responsible individuals
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17 Update 340B policies and procedures and plan for ongoing update and review. Increasing frequency of audits (internal and external) Implementing 340B compliance training programs Correcting/updating database entries and Medicaid Exclusion File; plan for maintaining Improving controls and software settings Manufacturer Repayment
18 42 U.S.C. section 256b(a)(5)(D): If the Secretary finds after audit and after notice and hearing, that a covered entity is in violation of the anti-diversion or duplicate discount requirements, the covered entity shall be liable to the manufacturer of the covered outpatient drug that is subject of the violation in an amount equal to the reduction in the price of the drug.
19 Covered entities are expected to make direct contact with effected manufacturers notifying them of the violation and beginning a dialogue for repayment. In addition, audit results are posted on the website of the Office of Pharmacy Affairs (OPA) and manufacturers are invited to contact the CE if they believe they are owed repayment.
20 Jessica Blackburn 340B Advisors, LLC PO Box 400 Gainesville, Missouri Jeremiah McWilliams, PharmD Wellpartner, Inc
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