Contract Pharmacy Arrangements in the 340B Program. Conflicts of Interest. Learning Objectives 2/10/2014. OIG Memorandum Report:

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1 OIG Memorandum Report: Contract Pharmacy Arrangements in the 340B Program (OEI ) Adam Freeman, Program Analyst U.S. Department of Health & Human Services Office of Inspector General February 7, Conflicts of Interest Adam Freeman has no actual or potential conflict of interest in relation to this presentation 2 Learning Objectives Ability to describe the different methods that covered entities in the study use to identify 340B-eligible prescriptions at contract pharmacies Ability to restate two key oversight activities that covered entities can perform for their contract pharmacy arrangements 3 1

2 CE Question According to HRSA guidance, which party has the responsibility to ensure that diversion and duplicate discounts do not occur in contract pharmacy arrangements? a) The contract pharmacy b) The 340B administrator c) The covered entity 4 About OIG/OEI OIG mission: To protect the integrity of HHS programs as well as the health and welfare of beneficiaries OEI s role: Conduct national evaluations of HHS programs from a broad, issuebased perspective 5 Past Reports on 340B June 2011: State Medicaid Policies and Oversight Activities Related to 340B-Purchased Drugs (OEI ) June 2006: Review of 340B Prices (OEI ) October 2005: Deficiencies in the Oversight of the 340B Drug Pricing Program (OEI ) June 2004: Deficiencies in the 340B Drug Discount Program s Database (OEI ) 6 2

3 OIG Memorandum Report: Contract Pharmacy Arrangements in the 340B Program (OEI ) 7 Why We Did This Study Growth in 340B contract pharmacy arrangements since March 2010 HRSA audit findings 8 Covered Entity Oversight Covered entity responsibility Diversion Duplicate discounts HRSA recommends Monitoring Audits Notify HRSA of any problems 9 3

4 Study Methodology Interviewed 30 covered entities 15 DSHs 15 community health centers Interviewed eight 340B administrators 10 Results in Brief 1. Preventing diversion 2. Preventing duplicate discounts 3. Uninsured patients 4. Covered entity oversight 11 Covered entities in the study use different methods to identify 340Beligible prescriptions 12 4

5 9 of the 30 covered entities identify 340Beligible prescriptions when the prescriptions are written of the 30 covered entities have their administrators identify 340B-eligible prescriptions after the prescriptions are written 14 Variety of methods can result in differing eligibility decisions across covered entities 15 5

6 Scenario: Nonexclusive physician? 16 Results: Duplicate Discounts Most of the covered entities carve out Medicaid at contract pharmacies 17 Results: Duplicate Discounts Administrators reported difficulties identifying prescriptions for MCO Medicaid beneficiaries 18 6

7 Results: Duplicate Discounts 8 of 30 covered entities reported that they carve in Medicaid at contract pharmacies None of them reported this to HRSA 6 of the 8 did not report a method to prevent duplicate discounts 19 Results: Uninsured Patients Eight covered entities do not offer the discounted 340B price to uninsured patients at contract pharmacies 20 Results: Uninsured Patients Many covered entities do offer the discounted 340B price to uninsured patients at contract pharmacies Patient card Identify prescriptions when written 21 7

8 Results: Oversight Almost all covered entities in the study monitor their contract pharmacy arrangements, but few have done audits 22 CE Question According to HRSA guidance, which party has the responsibility to ensure that diversion and duplicate discounts do not occur in contract pharmacy arrangements? a) The contract pharmacy b) The 340B administrator c) The covered entity 23 Contact Information Adam Freeman HHS/OIG/OEI 233 N Michigan Ave, Suite 1390 Chicago, IL (312) adam.freeman@oig.hhs.gov Access the report: oig.hhs.gov/oei/reports/oei asp 24 8