HRSA Audit Findings and Implications for Patient Definition August 20, 2015 Speakers: Maureen Testoni Senior Vice President and General Counsel Jeff Davis Counsel, Legal and Policy Affairs 2015 340B Health 2015 340B Health 1
Housekeeping Webinar IT platform technical questions Contact Lee-Anne Gabrielli at (202) 552-5856 or lee-anne.gabrielli@340bhealth.org Q&A: Submit questions online anytime during event using the chat feature Slides: will be sent to attendees 3 business days post webinar 2015 340B Health 2
Disclaimer This presentation is not to be construed or relied upon as legal advice. This copyrighted presentation is intended for 340B Health member hospitals, prospective members and corporate partners only. Distribution outside of your hospital or company is expressly prohibited. 2015 340B Health 3
Today s Agenda Audit finding overview Specific findings that could impact your operations Challenging findings 2015 340B Health 4
Audit Finding Overview Results for hospitals posted on HRSA website Total posted for 2012-2015: 293 No findings or finding that does not require repayment: 133 (45%)* Findings that require repayment: 158 (54%)* * These statistics take into consideration hospital public letters stating that no repayment was required. 2015 340B Health 5
Hospital Findings Findings for Hospitals Per HRSA Website No Findings 25% Diversion 52% 50% of diversion findings related to contract pharmacy Duplicate Discount 21% Inaccurate Database 43% GPO 6% Contract Pharmacy Oversight 4% Inauditable records and low DSH percentage one each Registered a non-reimbursable site two (Totals equal more than 100% because some hospitals had more than one finding.) 2015 340B Health 6
Hospital Audit Findings Over Time FY 12 FY 13 FY14 (93/99 are posted) FY15 (only 56 are posted) No Findings 42% 21% 19% 30% Findings 58% 79% 81% 70% Repayment 45% 63% 64% 55% State repaid 3% 1% 2015 340B Health 7
Specific Audit Findings Over Time FY 12 FY 13 FY14 (93/99 are posted) FY15 (only 56 are posted) Diversion 33% 58% 60% 43% Duplicate Discount 30% 21% 21% 16% Inaccurate Database Contract pharmacy oversight 24% 49% 45% 45% 4% 5% 2% GPO 1% 11% 9% Inauditable records 1% Nonreimbursable site DSH % 1% 1% 1% 2015 340B Health 8
Public Letters FY12 All 25 public letters posted 3 No duplicate discount occurred 1 State Medicaid assumed repayment responsibility 21 Standard form letter FY13 39 public letters posted; 60 expected 7 Repayment is required due to an isolated incident and not a systemic issue 6 No duplicate discount or diversion occurred 1 No duplicate discount occurred, but does not challenge diversion finding and repayment is still necessary 1 State Medicaid assumed repayment responsibility 24 Standard form letter FY14 Only 9 letters posted 5 Standard form letter 3 No repayment is actually required 1 Repayment is required due to an isolated incident and not a systemic issue FY15 No public letters posted 2015 340B Health 9
Diversion 2015 340B Health 10
Definition of Patient Existing requirements for hospitals 1. The covered entity has established a relationship with the individual, such that the covered entity 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 3. An individual will not be considered a patient of the covered entity for purposes of 340B if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting. (61 Fed. Reg. 55156 (Oct. 24, 1996)) 2015 340B Health 11
Existing Requirements for Hospital Outpatient Settings A hospital outpatient facility is considered an integral part of the hospital and therefore eligible for section 340B drug discounts if it is a reimbursable facility included on the hospital s Medicare cost report. When these facilities are added to the master list of eligible and participating covered entities, the off-site facilities will be able to access 340B discount pricing. On-site clinics that are not included on the Medicare cost report will not be eligible for PHS discount pricing (59 Fed. Reg. 47884 (Sept. 19, 1994)) 2015 340B Health 12
Patient Definition HRSA audits say prescriptions should be written: 1. By providers that are employed by, or under a contractual or other arrangement with the covered entity, and 2. At sites that are reimbursable on the covered entity s cost report Scripts written at an off-site location are very likely to result in findings (with some exceptions) HRSA is looking for evidence that the hospital had responsibility for care that led to script 2015 340B Health 13
Example Credentialed Providers Scripts written by employed or credentialed providers on the hospital premises are unlikely to result in findings If script is written at hospital, hospital is responsible for the care Scripts written by employed or credentialed providers in their private offices are likely to result in findings relationship with prescribing provider as employed or contracted does not extend to the provider s private practice, but is valid only for services rendered at the hospital. 2015 340B Health 14
Scripts Written at Off-Site Location Must show that hospital is responsible for care ongoing medical responsibility of the hospital for health services provided to the individual demonstrate actual responsibility Actual Responsibility not shown solely by: Demonstrating that hospital is part of the continuum of care (proximate in type and time) Documenting that hospital provided services to the same individual at another point in time Establishment of a health record Provision of lab services initiated in private physician s office 2015 340B Health 15
Scripts Written at Off-Site Location (cont d) Scripts written outside the hospital pursuant to a referral or referral arrangement may demonstrate hospital responsibility Examples: Need documentation of the referral (e.g., notes in patient s chart) or the referral agreement (e.g., hospital primary care clinic has agreement with outside clinic to provide mental health care to hospital clinic s patients) Need documentation of co-management of the patient s care (e.g., interaction between the hospital and the private physician) Advising an individual to follow-up with a different health care provider is usually not enough Expectation is that responsibility for the care provided at the off-site location remained with the covered entity 2015 340B Health 16
Employees HRSA is issuing findings for scripts written pursuant to a self-insured health plan when the patient has not received services at the hospital. So far, these findings are not being overturned. Comments in audit findings on employees: A hospital s role as the administrator of a self-funded plan does not rise to the health care arrangements contemplated by the 340B patient definition Managing an employee benefit plan shows a hospital acting as an administrator of a self-funded plan, not as the health care provider of these individuals Findings may be overturned if patient received care at the hospital, but very fact-specific 2015 340B Health 17
Contract Pharmacy Half of all diversion findings relate to contract pharmacy! HRSA audits are looking for logic that verifies: 1. Status of patient 2. Location where prescription originated from 3. Eligibility of the provider 4. Verification that covered entity maintains responsibility for patient s healthcare Per HRSA final audit reports: Logic based on time is not enough Logic based on eligible provider list definitely not enough Specific vendors are named 2015 340B Health 18
Contract Pharmacy Vendors Hospital, not the vendor, has the responsibility to ensure compliant logic is used Do not assume that vendor s logic options will protect you from findings Hard to meet HRSA s patient definition standard in contract pharmacy 2015 340B Health 19
Other Findings 2015 340B Health 20
Maintaining Records Need record of the specific episode of care that resulted in the script Audit Finding: CE did not maintain a health care record of the specific episode of care resulting in the prescription to demonstrate responsibility for care 2015 340B Health 21
Inventory Management 9-digit replenishment is permissible when hospital is unable to match package size In cases where 11-digit NDC replenishment is not possible because [the hospital] is unable to match the package size, [the hospital] may replenish at the 9-digit NDC and is responsible for having policies and procedures to handle this situation. [The hospital] must have auditable records to demonstrate proper accumulation in a replenishment model. 2015 340B Health 22
Incorrect Database Record If clinic has a different address than the parent, it should be separately registered HRSA finding: must separately register a clinic with a separate address even though it is located in a building physically connected by an elevated walkway to the main hospital 2015 340B Health 23
Challenging Findings Hospitals have success in overturning findings Some findings are made in error, so hospital just needs to provide additional facts Findings related to patient definition issues are sometimes overturned, but are very fact specific At least half of the hospitals that report challenging findings to 340B Health succeed in overturning one or more of the findings 2015 340B Health 24
Resources 340B Health compliance resources (for 340B Health members) (http://www.340bhealth.org/340b-resources/complianceresources/audits) What to expect when you receive an audit letter Data requests used in HRSA audits Compliance outline, checklist, sample policy guides Technical assistance calls over 100 audited hospitals OPA resources (http://www.hrsa.gov/opa) PVP resources (https://www.340bpvp.com/resourcecenter/) Includes sample policies and procedures and self-audit outlines 2015 340B Health 25
Upcoming Events 12 th Annual 340B Coalition Winter Conference February 17-19, 2016 San Diego, CA http://340bwinterconference.org Save the Date!! Early Spring Lobby Day in Washington, D.C. Date TBD Stay tuned for details! 20 th Annual 340B Coalition Summer Conference July 11-13, 2016 Washington, DC http://340bsummerconference.org Save the Date!! Summer Legislative Event in Washington, D.C. July 13-14 Stay tuned for details! For conference registration details, contact Sam Wilhelm-Ross at sam.wilhelm-ross@340bhealth.org or 202-536-2280. For legislative event registration details, contact Liam Steadman at liam.steadman@340bhealth.org or 202-536-2282. 2015 340B Health 26
Upcoming Roundtables Illinois (Chicago Late September, date TBD) Missouri (Kansas City- October 2) Ohio (Cleveland - October 14) http://tinyurl.com/p64mlg3 Pennsylvania (Pittsburgh October 15) Stay tuned for more details! For registration details, please contact Lee-Anne Gabrielli at lee-anne.gabrielli@340bhealth.org or 202-522-5856. 2015 340B Health 27
Upcoming Webinars Maximizing Your 340B Health Membership August 27-1:00-2:00 Eastern http://tinyurl.com/o8o8b24 Webinar for Prospective 340B Health Members September 16-1:00-2:00 PM (Eastern) http://tinyurl.com/potvnuf 2015 340B Health 28
Additional Questions? Maureen Testoni Senior Vice President and General Counsel 340B Health 1101 15th Street, NW, Suite 910 Washington, DC 20005 Phone: 202-552-5851 Maureen.Testoni@340Bhealth.org 2015 340B Health 29