University of Kentucky / UK HealthCare Policy and Procedure. Policy # A14-070
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1 University of Kentucky / UK HealthCare Policy and Procedure Policy # A Title/Description: 340B Drug Discount Program Purpose: This policy describes UK HealthCare s 340B Drug Discount Program and strategies to maintain compliance with HRSA requirements. Policy Definitions 340B Program Covered Drug Covered Entity Health Resources and Services Administration (HRSA) Manufacturer Medicaid Procedure Responsible Staff and Competency Leadership - 340B Steering Committee References Persons and Sites Affected Policies Replaced Effective Date Review/Revision Dates Policy This policy describes procedures at UK HealthCare to maintain compliance with the 340B drug pricing program. Section 340B of the Public Health Service Act (1992) requires drug manufacturers participating in the Medicaid Drug Rebate Program to sign an agreement with the Secretary of Health and Human Services. This agreement limits the price manufacturers may charge certain covered entities for covered outpatient drugs. The resulting program is called the 340B Program. The program is administered by the Office of Pharmacy Affairs (OPA), a part of the federal Health Resources and Services Administration and Department of Health and Human Services. This policy is reviewed, updated, and approved by the 340B Steering Committee as needed, and at least on an annual basis with documentation. Policy # A B Drug Discount Program 1
2 Definitions 340B Program The 340B Drug Pricing Program resulted from enactment of Public Law , the Veterans Health Care Act of 1992, which is codified as Section 340B of the Public Health Service Act. Section 340B limits the cost of drugs to Federal purchasers and to certain grantees of Federal agencies. Covered Drug An FDA-approved prescription drug, an over-the-counter (OTC) drug that is written on a prescription, a biological product that can be dispensed only by a prescription (other than a vaccine) or FDA-approved insulin. Covered Entity The statutory name for facilities and programs eligible to purchase discounted drugs through the Public Health Service's 340B drug pricing program. Covered entities include federally qualified health center lookalike programs; certain disproportionate share hospitals owned by, or under contract with, State or local governments; and several categories of facilities or programs funded by Federal grant dollars, including federally qualified health centers, AIDS drug assistance programs, hemophilia treatment centers, STD and TB grant recipients, and family planning clinics. Health Resources and Services Administration (HRSA) HRSA is an agency within the Department of Health and Human Services. Its mission is to improve and expand access to quality health care for all. HRSA assures the availability of quality health care to low income, uninsured, isolated, vulnerable and special needs populations and meets their unique health care needs. HRSA is organized into several Offices and five Bureaus (the Healthcare Systems Bureau, the Bureau of Primary Health Care, the Bureau of Health Professions, the HIV/AIDS Bureau, and the Maternal and Child Health Bureau). Manufacturer For purposes of the 340B Program, manufacturer includes all entities engaged in 1. The production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or 2. The packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. A manufacturer must hold legal title to or possession of the National Drug Code number for the covered outpatient drug. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law. "Manufacturer" also includes an entity, described in (1) or (2) above, that sells outpatient drugs to covered entities, whether or not the manufacturer participates in the Medicaid rebate program. Policy # A B Drug Discount Program 2
3 Medicaid A joint Federal and State program that helps with medical costs for some people with low incomes and limited resources. Medicaid programs vary from State to State but most health care costs are covered if a beneficiary qualifies. The name of the program varies by State but is commonly referred to as the medical assistance program. Procedure As a participant in the 340B drug pricing program, UK HealthCare s policies are as follows: 1. UK HealthCare uses any savings generated from 340B in accordance with 340B Program intent.uk uses savings generated from contract pharmacy to directly fund all of the outpatient medication voucher needs for its indigent and underserved patient population 2. UK HealthCare meets all 340B Program eligibility requirements: (a) UK HealthCare s OPA Database covered entity listing is complete, accurate, and correct. (b) UK HealthCare is owned or operated by a unit of State or local government. (c) For the most recent cost reporting period that ended before the calendar quarter involved, UK HealthCare had a disproportionate share adjustment percentage greater than percent. (d) UK HealthCare does not obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement. 3. UK HealthCare uses 340B only in outpatient clinics that are fully integrated into the Disproportionate Share Hospital (DSH) and reimbursable on the most recently filed cost report. 4. UK HealthCare complies with all requirements and restrictions of Section 340B of the Public Health Service Act and any accompanying regulations or guidelines including, but not limited to, the prohibition against duplicate discounts and rebates under Medicaid, and the prohibition against transferring drugs purchased under 340B to anyone other than a patient of the entity. 5. UK HealthCare maintains auditable records demonstrating compliance with the 340B requirement described in the preceding bullet. (a) Prescriber is on the hospital s eligible prescriber list as employed by the entity, or under contractual or other arrangements with the entity, and the individual receives a health care service from this professional such that the responsibility for care remains with the entity. (b) 340B drugs are used in outpatient facilities that appear as reimbursable on the most recently filed CMS cost report. (c) DSH maintains records of the individual s health care. (d) Patient is an outpatient at the time medication is administered/dispensed. Policy # A B Drug Discount Program 3
4 (e) UK HealthCare does not purchase covered outpatient drugs for its outpatient registered facilities using a Group Purchasing Organization: UK HealthCare interprets the definition of covered outpatient drugs to include An FDA-approved prescription drug, an over-the-counter (OTC) drug that is written on a prescription and a biological product that can be dispensed only by a prescription (other than a vaccine) or FDA-approved insulin. UK HealthCare does not interpret the following to meet the definition of covered outpatient drugs: Bundled diluents for infusions and large volume parenterals used as diluents and an OTC drug that is not written on a prescription. UK HealthCare bills Medicaid per Medicaid reimbursement requirements, and as UK HealthCare has reflected its information on the OPA website/medicaid Exclusion File i. UK HealthCare informs OPA immediately of any changes to its information on the OPA website/medicaid Exclusion File ii. Medicaid reimburses for 340B drugs per state policy and does not collect rebates on claims from UK HealthCare. 6. UK HealthCare has systems and mechanisms and internal controls in place to reasonably ensure ongoing compliance with all 340B requirements. 7. UK HealthCare has an internal audit plan adapted by the compliance officer and conducted annually. 8. UK HealthCare uses contract pharmacy services, and the contract pharmacy arrangement is performed in accordance with OPA requirements and guidelines including, but not limited to, that the hospital obtains sufficient information from the contractor to verify compliance with applicable policy and legal requirements, and the hospital has utilized an appropriate methodology to ensure compliance (e.g., through an independent audit or other mechanism). Signed Contract Pharmacy Services Agreement(s) complies with 12 contract pharmacy essential compliance elements. 9. UK HealthCare acknowledges its responsibility to contact OPA as soon as reasonably possible if there is any change in 340B eligibility or material breach by the hospital of any of the foregoing policies. This will be done in coordination with the Office of Corporate Compliance. 10. UK HealthCare acknowledges that if there is a breach of the 340B requirements, UK HealthCare may be liable to the manufacturer of the covered outpatient drug that is the subject of the violation, and depending upon the circumstances, may be subject to the payment of interest and/or removal from the list of eligible 340B entities. 11. UK HealthCare elects to receive information about the 340B Program from trusted sources, including, but not limited to: (a) The Office of Pharmacy Affairs (b) The 340B Prime Vendor Program, managed by Apexus (c) Any OPA contractors Policy # A B Drug Discount Program 4
5 Responsible Staff and Competency Pharmacy staff members involved with procurement and split-billing software as well as the Primary Contacts and Authorizing Official complete initial basic training via webinar on the 340B and Prime Vendor Programs. Select members attend 340B University periodically. Leadership - 340B Steering Committee Oversight of UK HealthCare s 340B Program is the responsibility of the 340B Steering Committee. This committee is comprised of the following individuals: 1. Chief Administrative Officer (CAO) 2. Chief Pharmacy Officer 3. Pharmacy Senior Director of Acute Care Services 4. Pharmacy Senior Director of Ambulatory Services 5. Chief Compliance Officer 6. Counsel 7. Associate Vice President of Finance 8. Director of Reimbursement 9. Associate Vice President for Strategic Planning 10. Public Policy and Grant Manager 11. Director of Ambulatory Clinical Operations The 340B Steering Committee meets on a quarterly basis and is charged with the following objectives: 1. Determine strategy and assess related policies and procedures. 2. Establish an audit structure for internal audits completed by UK, as well as audit structure for external audits, which would be completed annually, per OPA guidelines. 3. Maintain standards for best practices, which may include sending key personnel to related conferences and/or training programs. 4. Review and maintain current 340B standards per direction from HRSA, the OPA and Apexus, which is the designated 340B prime vendor. 5. Ensure compliance and provide related oversight. 6. Ensure needed resources for program administration. 7. Assess programmatic modification or expansion of the 340B program. 8. Correct and/or report programmatic deficiencies within expected timeframes. 9. Discrepancies are immediately corrected and reported to the 340B Steering Committee. Any significant discrepancies are documented, corrected, and discussed with the 340B Steering Committee. 10. Verify that 340B related records and transactions are maintained for a period of 7 years in a readily retrievable and auditable format. Policy # A B Drug Discount Program 5
6 References A02-000, Admissions Hospital Inpatient 340B Standard Operating Procedure Manual Persons and Sites Affected Enterprise Chandler Good Samaritan Kentucky Children s Ambulatory Department Policies Replaced Chandler HP Good Samaritan Kentucky Children s CH Ambulatory KC Other Effective Date: 08/12/2015 Review/Revision Dates: 8/2013; 8/12/2015 Approval by and date: Name Philip Almeter, Director, Pharmacy Business Operations, Review Team Leader Name Gary L. Johnson, Enterprise Pharmacy Director Name Colleen Swartz, Chief Nurse Executive Name Bernard Boulanger, MD, Chief Medical Officer Name Marcus Randall, MD, Chief, Ambulatory Services Name Anna L. Smith, Chief Administrative Officer Name Michael Karpf, MD, Executive Vice President for Health Affairs Date Policy # A B Drug Discount Program 6
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