Maximizing the 340B Drug Discount Program: A Webinar for Finance Executives in 340B Hospitals Webinar

Transcription

1 Maximizing the 340B Drug Discount Program: A Webinar for Finance Executives in 340B Hospitals Webinar January 20, 2010 The Webinar Will Begin Momentarily National Association of Public Hospitals and Health Systems 1

2 Maximizing Savings in 340B: NAPH/SNHPA Webinar for Finance Specialists by Bill von Oehsen President and General Counsel Safety Net Hospitals for Pharmaceutical Access January 20, :00-2:00 PM (ET)

3 Overview 340B background Strategies to maximize 340B program benefits Other opportunities for pharmacy savings Deeper drug discount Resources and upcoming conferences

4 Background: Eligible Entities High Medicaid disproportionate share hospitals (DSH) owned by or under contract with state or local governments Freestanding children s hospitals Community health centers State and local health departments receiving grants under the Public Health Service Act (PHSA) Other federal grantees

5 Background: Eligible Entities (cont d) Discounts are for outpatient drugs only Use of drugs limited to patients of 340B covered entity Discounts are the best in the US except for those available to the Big Four VA, DOD, PHS and Coast Guard Medicaid billing procedures may need to be adjusted Administered by the Office of Pharmacy Affairs (OPA) within the Health Resources and Services Administration (HRSA)

6 Background: Eligible Entities (cont d) 100% 90% 80% 70% 100% 79% 66% 64% Private Sector Pricing Best Price 63% 60% 50% 40% 58% 53% 51% 49% 42% 30% 20% 10% 0% AWP AMP GPO Medicaid Rebate Canadian FSS 340B Big Four VA average Free Source: Data derived from Prices for Brand-Name Drugs Under Selected Federal Programs, Congressional Budget Office (June 2005)

7 Maximizing 340B Program Benefits: Strategies (1) Extend 340B to all eligible facilities (2) Extend 340B to all eligible patients (3) Purchase all covered outpatient drugs through 340B (4) Establish contract pharmacy arrangements (5) Establish partnership arrangements

8 Extend 340B to All Eligible Facilities Include all components of eligible hospital in 340B program Any facility whose costs are reimbursable on hospital s Medicare cost report is considered part of the hospital for 340B purposes Typically these are facilities that are provider-based under Medicare regulations Examples include hospital-based home health agency, infusion center, oncology clinic, nursing home, hospice, etc. Consider moving non-hospital facilities under 340B hospital to take advantage of 340B pricing

9 Extend 340B to All Eligible Patients Is your hospital using 340B for all eligible patients? HRSA s patient definition test: 1. The hospital has established a relationship with the individual, such that the hospital maintains records of the individual s health care; and 2. The individual receives health care services from a health care professional who is either employed by the hospital or provides health care under contractual or other arrangements (e.g. referral for consultation) such that responsibility for the care provided remains with the hospital.

10 Extend 340B to All Eligible Patients (cont d) Hospitals may use 340B for prescriptions written: (1) In connection with services rendered within a hospital-based facility, (2) By a prescriber who is treating the patient within the scope of his or her employment or contract with the hospital, or (3) By a non-hospital prescriber if the services provided are proximate in type and time to prior hospital-based services

11 Extend 340B to All Eligible Patients (cont d) Long-term care facility residents Home health patients Employees Prisoners Mental health patients Managed care enrollees

12 Purchase All Covered Outpatient Drugs Through 340B Many hospitals do not use 340B drugs in mixed use settings due to concerns about diversion Split-billing software can help Anesthesia products and other liquid or gas drugs can be bought through 340B if based on a reasonable methodology for excluding inpatient use Don t be intimidated by manufacturers that advance a narrower interpretation of covered outpatient drug, e.g., Integrillin, Thrombin, etc.

13 Establish Contract Pharmacy Arrangements Establishing a 340B contract pharmacy arrangement can create a new revenue stream for DSH hospitals, depending on the hospital s payer mix Using a ship to/bill to arrangement, the drugs are purchased by the hospital but delivered to the contract pharmacy The contract pharmacy typically also serves as the billing agent for the 340B provider The revenue collected by the contract pharmacy belongs to the 340B provider, not the pharmacy

14 Establish Contract Pharmacy Arrangements (cont d) Current limit on number of contract pharmacies per covered entity: 1 contract pharmacy per entity site (unless that site already has an in-house pharmacy) -- January 2007: HRSA proposed guidelines permitting unlimited number of contract pharmacy arrangements, without regard to whether the entities have in-house pharmacies --January 2009: Approval of proposed expansion expected soon

15 Establish Partnership Arrangements States and local governments pay significantly higher prices than 340B providers for outpatient drugs BUT: If government-funded populations (e.g. Medicaid, prisoners, mental health, indigent, nursing home) become patients of the hospital, a win-win arrangement can be negotiated with the state, county or city A growing number of hospitals are establishing partnership arrangements These arrangements generate a valuable revenue stream

16 Establish Partnership Arrangements (cont d) Two (2) implementation challenges: (1)The target population must be patients of the hospital and they cannot be just pharmacy patients (2)The hospital must purchase the discounted drugs through either an in-house pharmacy (or contract pharmacy if no in-house)

17 Establish Partnership Arrangements (cont d) Three (3) partnership options: (1) Satellite model Establish hospital site at non-340b partner facility (2) Visiting professional model Provide on-site professional care at non-340b partner facility (3) Follow-up care model Limit 340B dispensing to hospital visits and follow-up care Examples: Jackson Memorial, Truman, UTMB, LSU, VCU, Arrowhead, Santa Clara

18 Other Opportunities for Pharmacy Savings (1) Deeper drug discounts (2) Patient assistance programs (3) Formulary management

19 Deeper Drug Discounts Manufacturer non-compliance with 340B discount requirements let us know Penny prices Sub-ceiling 340B price negotiations individually or through prime vendor Inpatient price negotiations individually or through GPO Nominal pricing inpatient and outpatient drugs Proposed increase in Medicaid rebate percentage implications for 340B?

20 Healthcare Reform Extension of 340B to inpatient setting included in Senate but not House health care reform bill Both bills: Extend discount to children s hospitals, freestanding cancer clinics & certain rural hospitals Include integrity and transparency provisions SNHPA working to include inpatient provision in compromise bill

21 Not a SNHPA Member? Join SNHPA and its 500 member hospitals! Decades of 340B experience The only 340B hospital advocacy and member services organization Contact Karen Hicks at or karen.hicks@snhpa.org

22 Member Benefits Free technical assistance calls with 340B compliance experts Inventory management guidance Comprehensive comparison tool Pricing clearinghouse Identify good buying opportunities and price discrepancies Identify and recover overcharges Guidance on PAPs and Medicare Part D Free regional roundtables

23 Membership Specials 10% off annual dues, or Complimentary registration for one (1) at upcoming conferences in San Francisco or Washington, D.C. Pro-rated dues available See to learn more!

24 Resources Safety Net Hospitals for Pharmaceutical Access Drug Discount and Compliance Monitor (free for members) SNHPA/340B Job Site

25 Resources (cont d) Office of Pharmacy Affairs 340B Prime Vendor Program Pharmacy Services Support Center or

26 Upcoming Events 6 th Annual 340B Coalition Winter Conference February 1-3, 2010 San Francisco, CA 14 th Annual 340B Coalition Summer Conference July 19-21, 2010 Washington, DC

27 Upcoming Events (cont d) Legislative Day January 27, Washington, DC Contact Jaimie Vickery at (202) or Contract Pharmacy Webinar January 28, :00-2:00 PM (ET) (Free for Enhanced Level Members)

28 Consulting Opportunity Seeking part-time consultants to help grow the SNHPA community Play a valuable role in: Advancing the SNHPA mission Engaging your Finance counterparts Providing guidance on 340B outreach and policy For details, contact Anna Mangum at anna.mangum@snhpa.org or (202)

29 SNHPA Contacts Ted Slafsky Executive Director Rob Recklaus Director, Government Relations Bill von Oehsen President and General Counsel Karen Hicks Manager, Member Services and Event Planning

30 Maximizing 340B Savings Petra A. Fippen RPh Wishard Health Services, Indianapolis, Indiana January 20, 2009

31 Objectives List how and where an organization can access 340B to lower drug cost Identify other benefits of 340B Identify implementation considerations Identify available 340B resources

32 This is Wishard 328 bed acute care hospital, Level 1 trauma center with a regional burn unit 9 Community Health Centers with in house pharmacies 907,637 Rx filled in 2008 Second largest provider of outpatient visits of all U.S. safety net hospitals

33 Where we use 340B Annual Expense 2009 Without 340B plus 25% Difference Outpatient Pharmacy $17,761,726 $22,202,157 $4,440,431 Infusion Clinic $3,389,384 $4,236,730 $847,346 CHC Meds/Family Planning $ $1,169,279 $233,855 Estimated Annual Saving $5,521,633

34 Where we use 340B Inpatient DSH Voluntary primarily generic companies but seeing more brand company participation Employee RX Must meet definition of patient

35 Where we PLAN to use 340B Emergency Department Short Term Patient <24 hour Same Day or Ambulatory Surgery Any inpatient designated as outpatient in our registration system

36 Added Benefits of 340B Patient Assistance Programs institutional and individual programs $3.8 million in 2009 $3.6 million in 2008 $2.7 million in 2007

37 Added Benefits of 340B Medicare Part D Education and Guidance provided by SNHPA and Apexus Added revenue stream to offset indigent care 2009 $2,451, $3,102, $3,371,362

38 Added Benefits of 340B Brand to generic substitution Zocor simvastatin $1.6 million annually Pfizer products in 2006 including Zoloft, Neurontin, Glucotrol and Diflucan $1.7 million annually Therapeutic interchange Felodipine amlodipine $900K annually

39 Starting or Expanding? Key players are Finance and Pharmacy Define a plan who, what, where, and when Involve IT reporting, 340B splitting software Use available resources to guide your implementation Be patient. This is not an overnight process.

40 Available Resources SNHPA Office of Pharmacy Affairs Pharmacy Support Services Center Apexus 340B Prime Vendor Other 340B institutions

41 What can you do today? Make a list for yourself How can I use 340B in my institution today? Make a second list What can I put into motion for the future?

42 Questions? Petra A. Fippen, RPh E mail: petra.fippen@wishard.edu Phone:

43 Evaluation Please take a moment to complete this short evaluation. Your input is greatly appreciated! National Association of Public Hospitals and Health Systems 43