COMPLIANCE IN THE 340B DRUG PRICING PROGRAM Jason Atlas RPh MBA Manager, Education and Compliance Support Apexus Education and Compliance Support Team Apexus Education and Compliance Support Team 1
Objectives Apexus and its role as the Prime Vendor. Access to sub-340b pricing, education, guidance, and support 340B basics Major Compliance areas HRSA- what you need to know about audits Mega-Guidance Overview Q&A 340B Statute Resulted from a 1992 federal statute Manufacturers participating in Medicaid Drug Rebate Program must sign a Pharmaceutical Pricing Agreement (PPA) with the Secretary of Health and Human Services The manufacturer agrees to charge a price for covered outpatient drugs that does not exceed the 340B price 2
340B Eligible Entities Federal Grantees/Designees Federally qualified health center Federally qualified health center look-alikes Title X family planning grantees State aids drugs assistance programs Ryan white care act grantees (A,B,C,D,F) Black lung clinics Hemophilia treatment centers Native Hawaiian health centers Urban Indian organizations Sexually transmitted disease grantees Tuberculosis grantees Certain Hospitals Disproportionate share hospitals Children s hospitals Critical access hospitals Free standing cancer hospitals Rural referral centers Sole community hospitals Apexus 340B PVP CONTRACTING 340B Prime Vendor Program EDUCATION 340B University TM 340B University OnDemand TM ASSISTANCE Apexus Answers Call Center 3
340B Covered Outpatient Drugs Vaccines Inpatient drugs Drugs not directly reimbursed FDA doesn t require NDC Outpatient drugs Over-the-counter drugs (with a prescription) Clinic administered drugs Biologics Insulin http://www.ssa.gov/op_home/ssact/title19/1927.htm Pricing Comparison 100% 100% 79% PRIVATE SECTOR PRICING BEST PRICE 63% 50% 66% 64% 51% Apexus PVP 42% 0% AWP AMP GPO Medicaid Rebate 340B Veterans Administration 4
Major 340B Compliance Areas 1. Duplicate discount prohibition 2. No diversion (patient definition) 3. Certain hospitals only Group Purchasing Organization (GPO) Prohibition Orphan drug exclusion Duplicate Discount Prohibition 340B price Medicaid rebate 5
Actions to Review Duplicate Discount Prohibition Compliance 1. Verify the HRSA 340B Database is accurate 2. Contact your state Medicaid agency to ensure you understand state requirements 3. Determine way to account for retrospective Medicaid eligibility 4. Perform a self audit of Medicaid prescriptions 5. Ensure you do not use 340B for Medicaid patients at a contract pharmacy unless you ve notified HRSA of an arrangement to prevent duplicate discounts HRSA 340B Database: Medicaid 6
Patient Definition Records of individual s care Health care services, health care professional Employed by, under contractual or other arrangements (referral) Entity has responsibility for care Service received is consistent with funding or designation status (hospitals exempt) Services must be more than dispensing AIDS Drug Assistance Program (ADAP) exception Referral for Consultation 7
Self-Disclosure Scenario: While self-auditing, we noticed that scripts coming from eligible clinics, but written by ineligible private physicians, were considered eligible. We discovered we were only using location as eligibility criteria, without a provider list. Does this constitute a material breach of compliance? Self-Disclosure: Lessons Learned Entities to establish and document criteria of material breach of compliance Report violation issue to HRSA docs.340bpvp.com/documents/public/resourcecenter/all_ Entities_Self_Reporting_340B_Non_Compliance.docx Include corrective action plan; strategy to inform manufacturers (if applicable) Entities are expected to work with the manufacturer to determine a mutually agreed upon plan to address material breach Plan for financial remedy (if applicable) HRSA reviews self-disclosure and closes accordingly 8
Question How do you define material breach? Material Breach X% of total 340B purchases or impact to any one manufacturer $X (fixed amount), based upon total outpatient or 340B spend, or impact to any one manufacturer X% of total 340B inventory (units) X% of audit sample X% of prescription volume/prescription sample 9
GPO Prohibition Applies to: Disproportionate share hospitals Children s hospitals Free-standing cancer hospitals Such hospitals:...will not participate in a group purchasing organization or group purchasing arrangement for covered outpatient drugs as of the date of this listing on the HRSA website. HRSA GPO Certification Policy and Procedures 10
Policy and Procedures General Policies Medicaid Exclusion File Contract Pharmacy 340B Manager and Coordinators Internal Audit Self-Reporting Non- Compliance HRSA Audits by the Numbers Number of covered entities audited FY 2012 FY 2013 FY 2014 FY 2015* (As of Sep 4) 51 94 99 180 Outpatient facilities/sub-grantees 410 718 1,476 2,356 Contract pharmacies 860 1,937 4,028 3,996 Number of finalized reports 51 93 94 82 11
Participating Entities vs Audits FY12- FY15 YTD Entity Type % 340B Entities % Audited Entities DSH 39% 60% CH 21% 14% FP 10% 4% CAH 8% 9% STD 7% 3% TB 5% 1% SCH 3% 1% PED 2% 3% RRC 2% <1% HV <1% <1% FQH <1% <1% RWI <1% 2% HM <1% <1% CAN <1% <1% 60% of all 340B participating entities are comprised of DSH and CH entities 23 Categories of OPA findings: FY12-FY15 YTD Incorrect 340B database record 35.2% Duplicate discounts 20.2% Covered outpatient drugs obtained through GPO 3.8% Other 3.3% Entity did not provide contract pharmacy oversight 2.5% Covered entity purchased orphan drugs through 340B, contrary to listing on 340B database 0.3% Entity does not meet 340B eligibility requirements (DSH %) 0.3% Entity failed to maintain auditable medical records 0.3% Diversion 37.4% 24 12
Audit Summary Statistics, 2012-15 72% of audited entities have at least one finding 73% of entities with findings also had contract pharmacies 340B University attendance prior to audit associated with 1/3 the finding rate of nonattendees Have an Audit Team 13
Key Takeaways Entities can prepare for HRSA and manufacturer 340B audits with available tools and resources Apexus tools: self-audit, sample HRSA data request Prepare for a HRSA audit now assemble a team of experts and self-audit Compliance is the entity s responsibility; do not rely on a vendor s records alone in a contract pharmacy relationship The goal is perpetual compliance readiness Mega-guidance Overview Mega-guidance published 8-28-15 60 day comment period (through 10-27-15) Timeline could be 1-2 years before finalization Focused on improving program integrity Increased requirements for both entities and manufacturers 14
Mega-Guidance Key Areas Entity restrictions/areas Hospital eligibility (government contracts) Covered outpatient drug (limiting definition, Medicaid bundled claims) Patient definition (discharge, referral, self-insured plans, infusion only, billed as outpatient) Records (5 years for entities and manufacturers) Correction through credit-rebill within 30 days No GPO at entity owned pharmacies Improper accumulation could be diversion Contract pharmacy annual and quarterly audits (expectation) Medicaid HRSA considering changes to Medicaid Exclusion File to handle separate carve-in decisions for MCO vs FFS Manufacturer restrictions/areas 90 days for manufacturers to correct overcharges Limited distribution plan submission to HRSA for specialty drugs with restricted availability Manufacturer recertification HRSA potentially audits wholesalers Potential OIG involvement if manufacturer fails to provide auditable records or respond to HRSA audit/data requests Contact Information Apexus Answers: M-F 8:00-5:00 PM CT Email: ApexusAnswers@340bpvp.com Website: www.apexus.com 15
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