340B Pharmacy Program Compliance insight. ideas Kentucky Primary Care Association attention

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1 340B Pharmacy Program Compliance Kentucky Primary Care Association Presented by: Scott Gold, CPA, Partner October 16, 2012 Brief Overview History of 340B Drug Program Discounted Pharmaceuticals Growing and High Profile Program Oversight Office of Pharmacy Affairs (OPA) Risks Hold Accountable What should you be doing? 1

2 History of 340B Pricing Program Originally created in 1992 Provides discounts on outpatient pharmacy drugs Program promotes access to affordable medications for certain safety-net providers, including FQHC s, FQHCLA s, other entities History of 340B Drug Pricing Program, continued Administered by the Office of Pharmacy Affairs (OPA) in the Health Resources Services Administration (HRSA) Participation in the 340B program can lead to significant cost savings and revenue generation 2

3 History of 340B Drug Pricing Program, continued Intent of program is to stretch scarce Federal resources as far as possible, ing more eligible patients and providing more comprehensive services Ultimate responsibility for compliance is at the covered entity level Discounted Pharmaceuticals Drug manufacturers provide upfront discounts to covered entities at either the ceiling price or potentially separately negotiated price which may be lower than ceiling price Ceiling price is based on the Average Manufacturer Price formula, less a discount (as low as $.01) 3

4 Discounted Pharmaceuticals Average savings estimated to be 25% to 50% Savings may be used for: Reduce price of pharmaceuticals for patients Expand services offered to patients Provide services to more patients Growing and High Profile Program With the Patient Protection and Affordable Care Act (PPACA), many changes to the 340B Program occurred, including: Can now contract with multiple pharmacies to provide 340b pricing to qualified patients Many new entities are now considered covered entities Strengthened the government s enforcement authority over both manufacturers and covered entities 4

5 Growing and High Profile Program These changes have significantly increased the level of 340B drugs purchased from manufacturers Government Accounting Office (GAO) conducted a study of the 340B program and in September 2011 report, GAO concluded HRSA was not doing enough to monitor the program Estimated $6 billion in 340B drug purchases Oversight Program Integrity HRSA Audits A-133 Compliance Supplement Certain CFDA s for June 30, 2012 audits Manufacturer audits Beginning 2013 Bureau Health Center Site Visits will Consider 340B 5

6 Risks Documentation Duplicate Discounts Diversion Risks - Documentation Policies and Procedures What you do How you do it Controls in place to ensure you did it Recertification Requirement Correct Data on OPA Database Match Scope of Project 6

7 Risks - Duplicate Discounts Equals Accessing the 340B Discount and Medicaid Rebate on same drug HRSA enrollment billing Medicaid or not Do you purchase and dispense 340B drugs for Medicaid or Medicaid Managed Care patients HRSA maintains Medicaid Exclusion file Risks - Diversion A drug is provided to an individual who are not a patient of that entity Entities should enroll all eligible outpatient or satellite sites Manage and track your inventory 7

8 Patient Definition Required to follow patient definition guidelines 61 Fed. Reg (October 24, 1996) Maintains records of the individuals health care Receives care by employee or contract employee of covered entity Services received are consistent with FQHC range of services Not a covered patient just because they fill their prescription at your pharmacy What Should You Be Doing Understand what you are currently doing Review Polices Review and update OPA registration Determine controls Perform controls 8

9 In-House Versus Contract In-House non-340b Inventory management Contract pharmacy: It is your Inventory! Controls Does your Organization fill scripts for referrals to doctors outside of your Organization? If not, should you? If so, how do you ensure compliance? 9

10 Medicaid & Medicaid Managed Care Know your State How does your State handle Medicaid Managed Care? Is Medicaid & Medicaid Managed Care eligible for 340B priced drugs? Understand the economics Recent Audits, Findings, and Communications Senator Grassley s letter to Duke Health System Contract pharmacy co-pays Contract pharmacy dispensation fees 10

Resources Office of Pharmacy Affairs (OPA) Phone: 301-594-4353 or 1-800-628-6297 Web: http://www.hrsa.

org Prime Vendor Program (PVP) - Apexus Phone: 1-888-340-2787 Web: http://www.340bpvp.com 910 E. St. Louis St.

11 Resources Office of Pharmacy Affairs (OPA) Phone: or Web: Pharmacy Services Support Center (PSSC) Phone: Web: pssc.aphanet.org Prime Vendor Program (PVP) - Apexus Phone: Web: E. St. Louis St. Springfield, MO Office: Fax: Scott W. Gold CPA Partner sgold@bkd.com Thank You! We welcome your comments & questions! 11

340B: WHAT ATTORNEYS NEED TO KNOW TODAY, TOMORROW AND IN THE FUTURE. March 3, 2016 ABA Emerging Issues in Healthcare Conference San Diego, CA

340B: WHAT ATTORNEYS NEED TO KNOW TODAY, TOMORROW AND IN THE FUTURE March 3, 2016 ABA Emerging Issues in Healthcare Conference San Diego, CA 2 Presentation Outline What you need to know Today 340B Program