340B Policy Landscape

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Marvin Kennedy
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340B Policy Landscape Providence 2015 340B Summit Presented by Steve

1 340B Policy Landscape Providence B Summit Presented by Steve Brennan, Director, Public Policy Providence Health & Services Sept. 28,

2 Today s topics Backdrop of debate over 340B program Legislative Activity in Washington, DC Providence engagement HRSA Omnibus Guidance Discussion 2

3 Government affairs is an integrated function serving all states Community engagement Government and public affairs Philanthropy Community benefit International health A standardized, consistent approach tailored to local needs 3

affairs Philanthropy Community benefit International

4 National, regional and local representation and engagement System core strategy Priorities and tactics Local action Creating healthier communities, together Annual advocacy strategic plan Advocacy, engagement, relationships Raising our Voice Legislation, policy and regulations relationships, engagement, memberships 4

Annual advocacy strategic plan Advocacy, engagement, relationships Raising our

5 FEDERAL ADVOCACY AND ENGAGEMENT The current landscape 5

6 Backdrop: Increasing Drug Prices Concern Growing Regarding High Drug Costs High cost of Hepatitis C drugs burden state Medicaid programs; legislatures in California, Oregon, other states look to respond Exponential price increases for certain drugs following acquisitions (5,000 % increase for Daraprim) Congress is considering drug reimportation, allowing CMS to negotiate with drug companies, barring pay for delay agreements, requiring rebates for Medicaid when generic prices increase, other responses to lower drug costs Presidential candidates Hillary Clinton, Bernie Sanders raising the issue on the campaign trail MedPAC studying options for Medicare program, including adding drug costs to ACO accountability 9/27/2015 6

to negotiate with drug companies, barring pay for delay agreements, requiring rebates for Medicaid when generic prices increase, other responses to lower drug costs Presidential

7 340B Policy Debate Program established in 1992 in the Veterans Health Service Act to establish an upper limit on the prices of covered outpatient drugs sold to particular covered entities to improve access for underserved populations. The Affordable Care Act expanded the program types of entities eligible to participate in this program to include children s hospitals, critical access hospitals, free standing cancer hospitals, rural referral centers, and sole community hospitals. HRSA has estimated that this expansion enables up to 1,500 new facilities to become eligible to participate in the 340B program. Expansion of 340B prompted concerns, criticism over lack of regulatory oversight and moved beyond Congressional intent 7

The Affordable Care Act expanded the program types of entities eligible to participate in this program to include children s hospitals, critical access hospitals, free standing cancer

8 340B Policy Debate, cont. Pharma, AIR 340B (includes oncology groups and others) spearheading advocacy campaign to tighten 340B program and reduce the number and types of facilities and providers eligible for 340B discounts for underserved populations. Pharma, AIR 340B (includes oncology groups and others) spearheading advocacy campaign to tighten 340B program and reduce the number and types of facilities and providers eligible for 340B discounts for underserved populations. Critics have garnered support from several key Members of Congress, most notably Senate Finance Committee Chairman Orrin Hatch (R-UT) Congressional pressure resulted in a GAO study that showed Medicare Part B drug spending is higher at 340B-eligible hospitals disputed by AHA, 340B Health, others House Energy & Commerce Health Subcommittee held a hearing in May to consider legislation to address criticism bill not introduced 8

for underserved populations. for underserved populations.

9 Concerns Raised by 340B Critics: 9/27/2015 9

10 340B PROGRAM HRSA 340B Mega Guidance 10

11 Key Elements of the Proposed Guidance Category Proposed Changes Program Eligibility and Registration Use of 340B in connection with most services furnished outside the hospital would be prohibited; 340B only used for drugs that are ordered with a service that is billed as an outpatient not available upon discharge from an inpatient stay Limits physician-administered drugs to only orders written by a hospital provider affiliated providers not considered eligible. Drugs Eligible for Purchase Under 340B Excludes Medicaid drugs paid as part of a bundled rate from 340B eligibility; separately paid drugs remain eligible Hospitals subject to GPO exclusion have to ensure that any drugs are purchased on the correct accounts in order to comply with the prohibition. 11

only orders written by a hospital provider affiliated providers not considered eligible.

12 Key Elements, Cont. Category Individuals Eligible to Receive 340B Drugs Proposed Changes Changes the definition of a Patient of a Covered Entity to include: Patient receives services at a facility or clinic site that is registered with the program and listed in the 340B database; Patient must receive services provided by a CE provider who is either employed by the CE or who is an independent contractor for the CE, such that the CE may bill for services on behalf of the provider; An individual would not be considered a patient of the CE whose only relationship is the dispensing or infusion of a drug An individual is considered a patient if his or her health care services is billed as an outpatient to the patient s insurance or 3 rd party payor; The individual patient s records are accessible to the CE and demonstrate that the CE is responsible for care. Demonstrates that the CE has a relationship for the services that result in the order or prescription and the CE retains responsibility for the care provided to the individual CE s must maintain records that demonstrate that all of the criteria above were met for every prescription or order. 12

registered with the program and listed in the 340B database; Patient must receive services provided by a CE provider who is either employed by the CE or who is an independent contractor for the CE,

13 Key Elements, Cont. Category Covered Entity Requirements; Prohibition of Duplicate Discounts Contract Pharmacy Arrangements Proposed Changes HRSA proposes to allow CEs to elect to carve in by having their Medicaid billing number, NPI or both listed on the 340B Medicaid Exclusion File. Also new guidance on Medicaid managed care, indicating that CEs can make different determinations regarding MCO patients than they do for FFS patients by either covered entity site and MCO. Where a contract pharmacy is listed on the 340B database, it will be presumed that the contract pharmacy will not dispense 340B drugs to Medicaid MCO or FFS patients, unless a written contract with the state is in place. Maintenance of Auditable Records: HRSA proposes a new standard of not less than five years for all 340B records, including those pertaining to child sites and contract pharmacies. A single CE can contract with a pharmacy only on its own behalf as an individual covered entity groups or networks of covered entities may not register or contract for pharmacy services on behalf of their individual covered entity members. HRSA warns that a CE contracting with a contract pharmacy should be aware of the federal anti-kickback statute and how such provisions could apply to arrangements with contract pharmacies. No further clarity is provided. 13

billing number, NPI or both listed on the 340B Medicaid Exclusion File.

14 Next Steps Advocacy work going forward through the end of 2015 Legislative: Work with Sen. Wyden (OR), other key Members of Congress as they develop solutions to high drug costs As needed, engage with Congressional delegations to utilize their influence with HRSA on 340B guidance Coordinate with national associations, other organizations to prevent anti-340b legislation that may arise during the fall/winter Regulatory: Submit formal comments to HRSA on 340B guidance Communicate/educate internal leaders on final rule changes 14

delegations to utilize their influence with HRSA on 340B guidance Coordinate with national associations, other organizations to

15 Questions and discussion Together, we answer the call of every person we serve: Know me, care for me, ease my way 15

340B Drug Pricing Program: Recent Developments and Compliance Update

340B Drug Pricing Program: Recent Developments and Compliance Update Elizabeth S. Elson, Esq. Anil Shankar, Esq. November 19, 2015 Attorney Advertising Prior results do not guarantee a similar outcome