Introduction to 340B Part 1 of 2 February 5, 2014 Lisa Scholz, PharmD, MBA Chief Operating Officer/Chief Pharmacy Officer Safety Net Hospitals for Pharmaceutical Access 10 th Annual 340B Winter Conference San Diego, CA February 5 7, 2014 1 This speaker has no actual or potential conflict of interest in relation to this presentation. 2 Who is in the room? Entities Government Vendors Manufacturers Advocates 3 1
Today s Goals Understand the 340 Program basics enrollment, implementation, and recertification. List 3 prohibitions and 3 requirements of the 340B Program. Identify 5 stakeholders in the 340B Program. Describe 3 activities that the advocacy organization, government, manufacturers, wholesalers, and the prime vendor do to support program integrity. 4 CE Question The 340B Program only has 5 stakeholders and 3 program requirements. True or False 5 Questions to reflect on What is the 340B Program? What are the requirements and prohibitions? Who are the stakeholders? What role do each of the stakeholders play in ensuring 340B Program Integrity? 6 2
340B Community America s Essential Picture Hospitals National Association of Counties Advocacy Safety Net Hospitals for Pharmaceutical Access National Rural Health Association National Association of Family Planning & Reproductive Health Children s Hospital Association National Alliance of State and Territorial AIDS Directors 340B Entities National Association of Community Health Centers American Pharmacists Association Prime Vendor Program- Apexus Manufacturers Wholesalers National Hemophilia Healthcare Alliance for the Homeless Council State Medicaid Planned Parenthood Center for Federation of Food and Medicare & America Drug Medicaid Administr Services ation (CMS) (FDA) Center for Disease Control (CDC) Health Resources and Services Administration (HRSA) 340B/Non 340B PVP Vendors Other 340B Contract Vendors/ Pharmacies Consultants Other Non-340B Vendors Agenda Program Overview and Intent Eligibility/Enrollment/Registration/Database Participation: Prohibitions and Requirements Program Integrity Initiatives Recertification Audit Resources to participate, advocate and learn. 8 340B Program: Overview and Benefits Provides discounts on outpatient drugs to certain safety-net covered entities Average savings of 25-50% Covered entities use savings to: Reduce price of pharmaceuticals for patients Expand services offered to patients Provide services to more patients Estimated $6-$6.5 billion dollars in 340B drug purchases last year Manufacturers that participate in Medicaid and Medicare Part B must also participate in the 340B Program 9 3
Intent of the 340B Program To help eligible safety net providers stretch scarce Federal Resources as far as possible, reaching more eligible patients and providing more comprehensive services. Reference: H.R. Rep. No. 102-384(II), at 12 (1992) 10 Eligible Entities Federal Grantees Comprehensive Hemophilia Treatment Centers Federally Qualified Health Centers Urban/ 638 Health Center Ryan White Programs Sexually Transmitted Disease/Tuberculosis Title X Family Planning Hospital Types Disproportionate Share Hospitals Newly Added: Critical Access Hospitals Rural Referral Centers Sole Community Hospitals Children s Hospitals Free Standing Cancer Hospitals 11 340B Enrollment Steps 1 Determine Eligibility 2 Complete Appropriate Forms and submit copies of Medicare Cost Report (where applicable) 3 OPA verifies Forms and validates outpatient sites. 4 Await Decision From OPA 12 4
340B Enrollment- Registration Registration Period January 1- January 15 April 1- April 15 July 1- July 15 Oct-1 Oct 15 Start Date April 1 July 1 Sept 1 January 1 13 340B Database Entities are not eligible for the program unless listed in the 340B database Wholesalers will not ship discounted drugs unless it is an exact match to the 340B database Information is updated daily Includes the Medicaid Exclusion File Online registration available for all applicants http://opanet.hrsa.gov/opa/default.aspx 14 Implementing 340B Integrity Requirements Prohibitions Distribution Model 15 5
340B Participation Once enrolled, the newly participating entity may: Set up an account with wholesaler using 340B ID Determine the drug delivery model In House Contract pharmacy Contact the Price Vendor Program (PVP) to discuss participation in the prime vendor program. 16 Contract Pharmacy Services 340B program allows entities to have multiple contract pharmacies The Covered Entity purchases the drug, but ship to - bill to procedure may be used The Covered Entity retains legal title to all drugs purchased under 340B. The Covered Entity must pay for all 340B drugs. 17 Where are the rules of engagement? Public Health Service Law Regulations Guidance Frequently Asked Questions 18 6
Program Prohibition: Diversion Applies to all covered entities: Diversion means: A drug is provided to an individual who is not a patient of that entity Drug dispensed in an area of a larger facility that is not eligible (e.g. an inpatient service, a non-covered clinic) Entities should enroll all eligible outpatient or satellite sites (off-site) Required to follow patient definition guidelines - 61 Fed. Reg. 55156 (October 24, 1996) 19 Program Prohibition: Diversion Patient Definition: The covered entity has established a relationship with the individual, such that the covered entity 1) maintains records of the individual's health care; and 2) the individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g. referral for consultation) such that responsibility for the care provided remains with the covered entity; and 3) the individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally qualified health center look alike status has been provided to the entity. (Does not apply to hospitals) 20 Program Prohibition: Duplicate Discounts Applies to all covered entities: Duplicate Discount = Accessing the 340B Discount and Medicaid Rebate on same drug Safety-net providers required to inform HRSA (by providing their Medicaid billing number) at the time they enroll whether they plan to purchase and dispense 340B drugs for their Medicaid patients and bill Medicaid. HRSA maintains this list known as the Medicaid Exclusion File on HRSA s public website Final Notice, Duplicate Discounts and Rebates on Drug Purchases published at 58 Fed. Reg. 34058 (June 23, 1993) 21 7
Program Prohibition: GPO Exclusion Applies only to disproportionate share hospitals, children s hospitals, and free standing cancer hospitals May not use a group purchasing organization (GPO) or arrangement when purchasing covered outpatient drugs Can use GPO for inpatients New FAQ published by Apexus/Prime Vendor regarding clarity of GPO exclusion Can buy at wholesale acquisition cost (WAC), PVP, direct contract 22 Program Prohibition: Orphan Drug Exclusion Only applies to rural and free standing cancer hospitals: Final regulation effective October 1, 2014 Limits the prohibition to uses for the rare disease or condition for which the orphan drug was designated Requires tracking and recordkeeping by hospitals Adopted the narrow interpretation supported by hospitals PhRMA has filed lawsuit to stop HRSA from implementing SNHPA continues to believe the underlying provision in the law is fundamentally flawed and supports full repeal SNHPA and other hospital organizations filed friend of court brief in support of current regulation 23 DSH Inpatient Drug Prices Best Price exception Voluntary discounts on inpatient drugs for original DSH hospitals only GPOs active in this area CMS has the authority to extend to other 340B hospitals, but did not do so in recent proposed regulation SNHPA will continue advocacy for newly eligible 340B hospitals 24 8
Program Requirements Auditable Records Covered Entities must maintain auditable records that demonstrate compliance with all Program requirements. Subject to audit by government or the manufacturer. Updated entity records Covered Entities have an ongoing responsibility to notify OPA of any change in eligibility. Covered Entities should also notify OPA of any updates in their information. 25 Program Requirements Patient Definition Established relationship between covered entity and individual (maintenance of the medical record) Responsibility for individual s health care remains with covered entity not just provider of low cost medication Individual receives health care service or range of services from the covered entity consistent with grant funding (not applicable to hospitals) 26 Program Integrity: Current Activities Determination of eligibility Annual Recertification- encourage to use change request online for entity information prior to recertification Quarterly calculations of 340B prices Maintenance of Medicaid Exclusion File Investigations/resolutions of alleged drug diversion and incorrect pricing/inappropriate limits on drug access Technical Assistance, webinars, FAQs, guidances 27 9
340B Recertification Steps 1 Ensure all information in 340B Database is accurate and prepared for recertification via change request form 2 Required for all Entities types- per HRSA/OPA schedule 3 Email with user name and password will be mailed to the Authorizing Official and primary contact listed for the parent hospital 4 Authorizing Official for Parent will be required to recertify for Parent and all Children (Outpatient Facilities associated with the parent hospital) sites 28 Recertification Steps continued 5 6 7 8 Authorizing Official will be required to certify and update any information that is not complete for any Parent/Child site. As the database has progressed throughout time, more requirements have been added and additional information may be required to be entered by Authorizing Official Once Authorizing Official has completed any additional program updates they will Certify to 8 statements. HRSA/OPA will review certifications and verify/request any additional information to support changes made to the database on behalf of the Authorizing Official HRSA/OPA will Recertify or Decertify the Covered Entity 29 Audits HRSA conducted All covered entity types will be considered for audit selection, including non-hrsa grantees and the hospitals Audit Proposed Focus Areas (subject to change): Eligibility status Policies and procedures procurement, inventory, distribution, dispensing, billing Internal controls Records documenting compliance with polices and procedures Procurement & distribution -emphasis Duplicate discount, Authorized 340B discount, Diversion, GPO exclusion 30 10
Audits Manufacturer conducted Authority Reasonable cause (duplicate discount, diversion) Independent auditor Submit audit work plan to OPA for approval prior to conducting - December 12, 1996 (61 Fed. Reg. 65406) OPA encourages manufacturers to submit plans and will work closely with them throughout the process OPA has received audit plans as of date of the conference 4 approved audit work plans 1 manufacturer audit in process 31 Resources in the 340B Journey Non- Government Trade Associations Advocacy Application and Best Practices Conferences and Educational Events Business Partners Oversight and Program Management Government Hrsa.gov/opa Government Contractors 340bpvp.com Government 32 Questions to reflect on What is the 340B Program? What are the requirements and prohibitions? Who are the stakeholders? What role do each of the stakeholders play in ensuring 340B Program Integrity? 33 11
CE Question The 340B Program only has 5 stakeholders and 3 program requirements. True or False 34 Contact us today! Call us on the Phone 202 552 5850 / Fax 202 552 5868 Find us on the Web www.snhpa.org Visit our home office in DC 1101 15 th St NW, Suite 910 Washington, DC 20005 12