what, when and why: designing a 340b self-audit program

© 2016 Pharmacy Stars, LLC All Rights Reserved www.pharmacystars.com 1

What,WhenandWhy:Designinga340BSelf-Audit

Program

TonyZappa,Pharm.D.,MBAVicePresident,VisanteInc.

© 2016 Pharmacy Stars, LLC All Rights Reserved www.pharmacystars.com

Agenda

•  340BComplianceRequirements:WhatDoesHRSAExpect?

•  ComponentsandBestPracJcesofSelf-AuditPrograms

•  KeyTake-aways•  Q&A


Disclosures and Caveats

•  OpinionsstatedarefromVisanteandmyselfandarenotofficial

•  Iamnotalawyerandamnotofferinglegaladviceoropinion

•  AlwayscheckwithyouraWorneys,ApexusorHRSAbeforemakinganychangesthatcouldimpactyourprograms’eligibility,complianceorperformance


340BComplianceRequirements:

WhatDoesHRSAExpect?


340B Compliance Requirements

•  Every covered entity is responsible for program compliance –  Cannot be outsourced to audit

firms or 340B administrators •  HRSA looks for 3 things

–  Eligibility •  Registration •  P&Ps •  Contracts

–  Diversion •  Ineligible patients

–  Duplicate Discounts •  Medicaid exclusion

ProgramCompliance

DiversionEligibility

DuplicateDiscounts


What Does HRSA Expect?

•  Keep340BdatabaseinformaJonaccurateanduptodate–  RegisternewoutpaJentfaciliJesandcontractpharmaciesas

theyareadded•  RecerJfyeligibilityeveryyear•  Preventduplicatediscounts(MedicaidExclusionFile)•  PreventdiversiontoineligiblepaJents•  Prepareforprogramaudits.Maintainauditablerecords

documenJngcompliancewith340BProgramrequirements•  StoppurchasingcoveredoutpaJentdrugsfromGPOs(DSHs,

CANs,andPEDs)•  NoJfysuppliersthatoutpaJentdrugpurchaseswillnowbe

madeat340Bprices


What Does HRSA Expect?

•  Independentauditsare“expected,”notrequired–  SenJneleffectofHRSA’sauditshasmovedmostenJJestoimplementanauditprogram

•  RouJneself-auditsarealsoexpected–  Whatshouldthisinclude?–  Whenshouldtasksbedone?Bywhom?–  Whoshouldprovideoversight?–  HowarecorrecJveacJonplanscreated,implementedandmanaged?•  Andcommunicated!


What’s Coming in the Omnibus Guidance?

•  Contractpharmacyoversight–  “ThecoveredenJtyisexpectedtoconductquarterlyreviewsandannualindependentauditsofeachcontractpharmacylocaJon;theresultsofthesereviewsareincludedintherecords’requirementsofsecJon340B(a)(5)(C)ofthePHSA.Any340BProgramviolaJondetectedthroughquarterlyreviewsorannualauditsofacontractpharmacyshouldbedisclosedtoHHS.CoveredenJJesaresubjecttotheapplicablepenalJesforinstancesofduplicatediscountsanddiversion.”



•  MaintenanceofAuditableRecords–  “AcoveredenJtymustmaintainauditablerecordsdemonstraJngcompliancewithall340BProgramrequirementsforitself,anychildsite,andanycontractpharmacyfor5yearsfromthedatethe340Bdrugwasorderedorprescribed,regardlessofwhethertheenJtyconJnuestoparJcipateinthe340BProgram...IfanenJty,anychildsite,oranycontractpharmacyterminatesits340BProgramparJcipaJon,anenJtymustmaintainapplicableauditablerecordsfor5yearsaeerthedateofterminaJon.”



•  AnnualRecerJficaJon–  “InordertoconJnuetobelistedasaneligiblecoveredenJtyandpurchase340Bdrugs,acoveredenJtyannuallyrecerJfiesthatthecoveredenJty,itschildsites,anditscontractpharmacyarrangementsmeetall340BProgrameligibilityandcompliancerequirements.ThisrecerJficaJonshallbecarriedoutinamannerandJmeframespecifiedbyHHS.”


How is Compliance Enforced?

•  AuditsbyHRSA/OPA–  PermiWedintheoriginallegislaJon,implementedin2011

•  Auditsbymanufacturers–  MustdemonstratereasonablecauseandgetHRSA’spriorapproval–  ManufacturerscanonlyauditforcompliancewithpaJentdefiniJonandthe

duplicatediscountprohibiJon•  AnnualrecerJficaJonprocess

–  AuthorizingofficialsmustaWesttofullcomplianceduringrecerJficaJon,includingcomplianceatcontractpharmacies

•  PenalJes–  Failuretocomplywiththeprogram’sanJ-diversionandduplicatediscount

provisions:forfeitureofdiscounts–  IfknowingandintenJonal:interestonthediscountsthattheyrefund–  IfsystemaJcandegregiousaswellasknowingandintenJonal:disqualifica9on

theprogram“forareasonable9me,”tobedeterminedbyHRSA


ComponentsandBestPracJces

ofSelf-AuditPrograms


Components and Best Practices

•  Createa340Bprogramgoverningcouncil–  PharmacyoperaJons(represenJngin-clinicandretaildistribuJon)

–  Finance–  IT/IS–  Reimbursement–  Legal–  Compliance–  Seniorleadership



•  Providecomprehensivetrainingtoall340Bprogramstaff,withatleastannualrefreshers(parJcularlyoncompliancetopics)–  Considershortteststogaugecomprehension–  Considersendingallkeystaffto340BUniversityannually•  UpdatesandnetworkingopportuniJes



•  DevelopanddocumentwriWenpoliciesandproceduresforall340B-relatedtopics–  Programgovernance–  PaJentdefiniJon–  GPOprohibiJon–  DuplicatediscountprevenJon(includingMedicaidcarve-

in/carve-out)–  Inventorymanagement–  Systemsmaintenance–  Compliancereviewsandself-audittasks

•  DefiniJonofamaterialbreach–  Useof340Bsavings



•  EnsurethatALLsystemsusedfor340BprogrammanagementareconJnuouslymaintained–  Splimngsoeware,inventorymanagement,contractpharmacyadministraJon,billingsystems,EMRs,dispensingsystems

•  EnsurethatALLrecordsneededforauditarereadilyavailable–  Includingfromoutsidevendors


What are “Auditable Records?”

•  Any documentation related to eligibility, registration and drug purchases of/by: –  Covered entity –  Child sites –  Contract pharmacies

Examples•  MedicareCostReportor

NoJceofGrantAward•  Contractwithgovernmentto

provideservices•  Contractpharmacy

agreements•  Purchasingrecords(340B

andnon-340B)•  P&Psregarding

procurement,GPOexclusion,contractpharmacy,compliance,etc.



•  ReviewandupdateHRSAdatabaserecords–  EnJtyinformaJon–  Childsites–  Authorizingofficialsandprimarycontacts–  Contractpharmacies

•  LocaJons•  StartandterminaJondates•  Confirmyouhaveactualcontracts!



•  Developandimplementgoodmethodsforself-audit–  EstablishcontrolsforallsystemsandoperaJons,withallowed

variances–  RouJnereviewsof340BtransacJonsandprescripJonsusing

reasonablesamples–  RouJneeligibilityreviewsofproviders,sites,pharmacies

•  Includingpharmacyvolumes/uJlizaJon–  PeriodicallyvisitcontractpharmacylocaJonstochecksignature

logs,inventoryanddispensingpracJces–  Periodicallycheckcontractsandagreementsforvalidityand

completeness–  Document,document,document

•  Obtainanindependentauditatleastannually



•  EstablishprocedurestodesignandimplementcorrecJveacJonplans–  Whenthey’reneeded–  Whowillmanagethem–  Whooverseesthem

•  ConJnuouslymonitorandreview340Bprogramchanges–  HRSA/OPA–  Apexus–  Peer-to-peer


Suggested Schedule: Hospitals

AtLeastAnnually AtLeastQuarterly AtLeastMonthly • Governance program •  Policies and

procedures •  Contract pharmacy

agreements

•  Low income service provision

•  Disproportionate share percentage

• Medicaid status and exclusion file

•  HRSA database

entries

• Medicare cost report child site listing

• Orphan drug usage (if applicable)

•  Provider file review •  Transaction reviews

- Mixed-use -  Contract Pharmacy -  GPO exclusion

-  Employee Rxs •  Split-biller set-up

-  NDC changes -  Charge master

changes


Suggested Schedule: Non-Hospitals

AtLeastAnnually AtLeastQuarterly AtLeastMonthly • Governance program •  Policies and

procedures •  Contract pharmacy

agreements

•  Notice of Grant Award - Scope of grant

• Medicaid status and exclusion file

•  HRSA database

entries

•  Inventory reconciliation (if using physical inventory model)

•  Provider file review •  Transaction reviews

-  Clinic-administered medications

-  Contract Pharmacy

-  Employee Rxs


Self-Disclosure Process

•  Establishanddocumentcriteriathatsignifywhenamaterialbreachofcompliancehasoccurred•  ForsituaJonsthatareamaterialbreach,informHRSAwhilecorrecJngtheissue.Includethe

followinginformaJon:–  340BID–  theviolaJonthatoccurredandscope–  acorrecJveacJonplan(CAP)tofixtheproblemmovingforward–  astrategytoinformaffectedmanufactures(ifapplicable)–  aplanforfinancialremedyifrepaymentisowed

•  Workoutanynecessaryfinancialremedywithmanufacturer(s)ingoodfaith

•  HRSAreviewsself-disclosure,including:–  violaJoninformaJon–  CAP,ensuringthatitfullyaddressesissuescausingtheviolaJon–  repaymentplanand/orcompleJonofplan–  compleJonofcontacttoallaffectedmanufacturers

•  HRSAclosesself-disclosure–  Whenallcriteriaaremet,HRSAsendswriWencommunicaJonthatthemaWerisclosed


Self-Disclosure Best Practices

•  UseReporJngTool–  The340BPrimeVendorProgramhasworkedwithHRSA,coveredenJJes,andmanufacturers

todevelopasuggestedtoolfortheself-disclosureprocess.•  asampleleWertoHRSA,•  alistofJpswhencontacJngmanufacturers,•  aformatforsummarizingnon-compliance,•  atemplateforaCorrecJveAcJonPlan(CAP),and•  Jpsdirectlyfrommanufacturersonthebestwaystoresolveissuesquicklyandcompletely

•  ProvideDetailedInformaJontoallStakeholders

•  CoveredenJJesshouldprovideanimmediateremedytocorrectthematerialbreach,proposeaplanforperiodicassessmentandconJnuousmonitoring,andoutlineaclearmethodtodeterminewhentheCAPiscompleted.SuccessfulcoveredenJJeshavealsorouJnelyidenJfiedanimplementaJondate,enJtycontactperson,andclarifiedaninternal340BcommunicaJon/educaJonstrategy.


KeyTake-Aways


Key Takeaways

•  BeconfidentinyourpaJentdefiniJon,340Busage,andabilitytopreventdiversionandduplicatediscounts

•  BepreparedwithwriWen,comprehensive340Bprogrampoliciesandprocedures,including340Bprogramcompliance

•  EnsurethatallrecordsnecessarytoauditcompliancearereadilyaccessibletoprogramleadersacrosstheorganizaJonandoutsideauditors

•  Conductregularself-auditstoidenJfyareasofweaknessandimplementcorrecJonstoanyerrorsoroversights–  Considertheuseofamock-audittoolandcentralizeddocumentaJon

system•  Obtainanannualindependentaudit,andconsiderquarterlyaudit

assistance


QuesJonsandDiscussion


ForMoreInformaJon:

TonyZappa952-457-7174

[email protected]

what, when and why: designing a 340b self-audit program

Documents