340bmegaguidancefroman340b mega guidance from an … · (gpo) exclusion, patient definition &...
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340B MEGA GUIDANCE FROM AN340B MEGA GUIDANCE FROM AN A&A PERSPECTIVEHFMA Region 9 ConferenceNovember 15, 2015
Tracy Young, CPA, PartnerBrian Bell, Director
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• The Health Resources and Services Administration (HRSA) has published the long
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Administration (HRSA) has published the long‐awaited 340B Drug Pricing Program Omnibus Guidance, more commonly referred to as the Mega Guidance. This presentation will cover recommended changes & clarifications to a number of 340B Drug Pricing Program itemsnumber of 340B Drug Pricing Program items, including the Group Purchasing Organization (GPO) Exclusion, patient definition & Medicaid Managed Care Organizations (MCO)
• This presentation has been designed to discuss t i d h ll di
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certain proposed changes, as well as discuss areas where covered entities may see greatest impact to their 340B Drug Pricing Program (340B Program)
• This presentation will cover certain Accounting & Auditing issues related to the 340B program
• This presentation should not be relied upon as legal advice
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Has your organization reviewed the Mega d d l d h h
QUESTION 1
Guidance and analyzed how this may impact your 340B Drug Pricing Program?
Yes
No
UnsureUnsure
340B started with Public
Health Services
Audit guidelines established.
Patient definition clarified.Contract pharmacy process
HRSA guidance on contract pharmacies allowing multiple
relationships.
HRSA begins audits & recertification process
bli h d
Federal judge invalidates HRSA’s
orphan drug
Evolution of 340B
19941994 1996199619921992
20002000 20102010 2011201120122012 20132013
Act
Guidance on outpatient
clinics released by HRSA
Contract pharmacy process established
Medicaid duplicate discount prohibitioncarve‐in/carve‐out
ACA expands eligibility to include five new entities
Orphan drug exclusion
established
GPO prohibition guidance
HRSA issues final rule on orphan drug exclusion
20142014
p gregulation
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access
drug exclusionOn August 28, 2015, HRSA
released 340B Omnibus Guidance (Mega Guidance)
2015 Future• Compliance• Independent Audits – Quarterly• Auditable Records
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340B PROGRAM OVERVIEW – PURPOSE
• Federally mandated drug pricing program• Part of Public Health Service Act, section 340B & Medicaid rebate program
Drug manufacturers must provide front‐end discounts on covered outpatient drugs purchased by covered entities
• Provides discounts on outpatient drugs purchased by “safety net” providers for eligible patients
Intended to provide financial relief to facilities that provide care to medically underserved
• Average savings of 25 ‐ 50% for eligible covered entities on outpatient drugs• Purpose of savings
8 // experience
access
Provide discounts on drugs to patients
Expand services by provider to
patients
Provide services to more patients
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Has your entity undergone an HRSA or f d
QUESTION 2
manufacturer audit?
HRSA
Manufacturer
Both
UnsureUnsure
https://www.federalregister.gov/articles/2015/08/28/2015‐21246/340b‐drug‐pricing‐program‐omnibus‐guidance
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TIMELINE & PROCESS• August 28, 2015 – Proposed guidance released by HRSA• October 27, 2015 – Comments on proposed guidance
were duewere due Mega Guidance is proposed guidance & not formal regulation. HRSA
does not have formal rule‐making authority; however, HRSA can issue interpretation &guidance. Guidance is currently proposed & may never be final interpretation
• Advocates & opponents that submitted comments 340B Health Pharmaceutical Research and Manufacturers of America American Hospital Association American Hospital Association Healthcare Financial Management Association BKD also submitted comments
• Covered entities should be preparing to evaluate impact when finalized
GPO EXCLUSION CLARIFICATION• For hospitals enrolled as DSH, children’s hospital or
freestanding cancer hospital• This clarification extends GPO prohibition to anyThis clarification extends GPO prohibition to any
pharmacy owned or operated by a covered entity registered as a DSH entity
• If a covered entity purchases from GPO as a last resort & documents appropriately, covered entity will not be considered in violation of GPO exclusion Extremely important due to drug shortages
• Prime vendor program is not considered a GPO subject to this prohibition
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PATIENT DEFINITION• Service provided in a location not listed in 340B database is not
considered an eligible location
Ensuring child sites are registered will continue to be a critical compliance element
• An individual is not considered a covered patient of covered entity if his or her care is classified as inpatient & billed as inpatient
Historically, a patient who was in emergency room, observation or other outpatient area & was later admitted as an inpatient was eligible for 340B drugs up to time of admission
Prescription must be written or ordered while patient is classified as outpatient based on payor billing rules
• Prescriptions written as part of an inpatient stay (discharge prescriptions) often filled under meds‐to‐beds program or subsequently through contract pharmacy relationships are no longer considered 340B‐eligible dispensations
PATIENT DEFINITION• An individual who receives follow‐up care at a private practice (non‐covered entity)
location is not eligible to receive 340B drugs• Individuals must receive health care services from a provider either employed by or
an independent contractor of covered entity such that covered entity may bill for services on behalf of providerservices on behalf of provider Previously HRSA required that the provider be employed by, contracted with or had other
arrangements with the covered entity
• Faculty practice arrangements & established residency, internship, locum tenens & volunteer health care provider programs are examples of covered entity‐provider relationships that would qualify
• Physician privileges or credentials at a covered entity are not sufficient to demonstrate an individual is a patient of the covered entity for 340B purposes
• Referral prescriptions will only be 340B eligible if eligible provider has written prescription
• Covered entity must maintain records of individual’s health care• Employees must qualify as an eligible patient & are not automatically 340B eligible
due to employment with covered entity• An individual would not be considered a patient of a covered entity whose only
relationship to individual is dispensing or infusion of a drug. Dispensing of or infusion of a drug alone, without a covered entity provider‐to‐patient encounter, does not qualify an individual as a 340B‐eligible patient
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Does your entity currently utilize contract h l h
QUESTION 3
pharmacy relationships?
Yes – more than five
Yes – less than five
No
UnsureUnsure
MEDICAID & MEDICAID MANAGED CARE• Covered entities are now able to make a determination for
both Medicaid Fee for Service & Medicaid Managed Care Organizations when determining to carve in or carve outOrganizations when determining to carve in or carve out Medicaid
• Prevention of duplicate discounts remains requirement of covered entity
• Critical for covered entity to maintain dialogue with state Medicaid agencies to prevent duplicate discounts
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CONTRACT PHARMACY ARRANGEMENTS• HRSA defines a contract pharmacy as a pharmacy not covered by covered entity or child site
• Under contract pharmacy arrangements, both Medicaid FFS & Medicaid MCO dispensations will be excluded from 340B Drug Program unless a well‐documented plan from covered entity, managed care company & state Medicaid agency clearly states how d li t di t ill b iti t d Pl t bduplicate discounts will be mitigated. Plan must be submitted to & approved by HRSA
INDEPENDENT AUDIT EXPECTATION• Mega Guidance emphasizes continued importance &
expectation of an annual independent audit being performed• HRSA is proposing standards for audits & quarterly reviews of• HRSA is proposing standards for audits & quarterly reviews of
contract pharmacy arrangements to ensure compliance efforts result in Early identification of problems Implementation of corrections Corrective action plans Prevention of future compliance issues
M i t i dit bl d t f i d f t l th fi• Maintain auditable data for a period of not less than five years
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INDEPENDENT AUDITS – HRSA’S VIEW• HRSA believes covered entities that do not have regular
reviews and audits completed of their contract pharmacy operations are at increased risk for compliance issues
• Annual audit of each location will provide covered entities with Regular opportunity to review & reconcile 340B patient eligibility
information Prevent diversion
• Covered entity should compare 340B prescribing records with contract pharmacy’s dispensing records on at least a quarterly basis to prevent Diversion Diversion Duplicate discounts
• Conducting these audits using an independent auditor will ensure pharmacy is following all 340B program requirements & provide covered entity with ability to timely report any violations, if applicable
SEVEN KEY COMPLIANCE AREAS
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RECENT DEVELOPMENTS
• Orphan drug ruling
• Bipartisan Budget Act of 2015
ACCOUNTING & AUDITING ISSUESWHAT ARE YOUR TOP RISKS RELATED TO 340B?
• Do you know what your top risks are?
• Do your risks include all your registered sites, contracting pharmacies, etc.?
• How do you plan to minimize these risks?
• How will these risks be identified?How will these risks be identified?
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• Have you experienced a HRSA audit or an independent external review of your participation in the program? Results?
ACCOUNTING & AUDITING ISSUES
the program? Results?
• Is your internal audit department testing your 340B participation throughout the year? Results?
• Have you or HRSA determined that a payback to manufacturers is necessary?manufacturers is necessary? If so, what are the notification requirements? How to determine the accrual and for how long will this accrual remain on the books?
• Understand how these proposed changes may impact your 340B Program
RECOMMENDATIONS
y p y g Make certain to have up‐to‐date & robust policies & procedures
Form a 340B compliance committee that meets several times a year• Include CEO, CFO, CNO, pharmacy, IT, medical records
f d & l l l Perform audits & compliance reviews regularly
Understand your 340B Program benefits & how those benefits are used by your covered entity
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ADDITIONAL RESOURCES
QUESTIONS?
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FOR MORE INFORMATION
THANK YOU!Tracy Young, CPA Brian BellPartner [email protected] [email protected] 501.372.1040 513.562.5562