Specialty Pharmacy CLE. October 29-30, 2015
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1 Specialty Pharmacy CLE October 29-30, 2015
2 Recent Regulatory Developments Michael R. Hess & Claire F. Miley Nashville, Tennessee
3 Outline 340B Program: Mega-Guidance Medicare Part D & Any Willing Pharmacy Recent OIG Opinions Free or Reduced Cost Drug Programs Opinions Affecting Portals HIPAA & Refill Reminders
4 340B Program
5 340B Program Overview The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations ( Covered Entities ) at significantly reduced prices. Covered Entities ( CEs ) are defined in statute and include HRSA-supported health centers, Ryan White clinics and State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, children s hospitals, and other safety net providers.
6 340B Program: Contract Pharmacies HRSA permits CEs to contract with pharmacies to provide services on the CE s behalf to CE patients. Originally, CEs were limited to one contractual pharmacy relationship In 2010, HRSA allowed CEs to enter into multiple contract pharmacy relationships Contract pharmacies ( CPs ) are a growth area, but also one under OIG scrutiny
7 August 2015 Release of the New 340B Mega-Guidance In August 2015, HRSA released the muchanticipated 340B Drug Pricing Program Omnibus Guidance Important changes for CPs and their CEs New Definition of Eligible Patient More restrictive Managed Medicaid Carve-Out Specific restrictions for CPs Limited Distribution Issues Audit and program integrity requirements
8 Six Components of an Eligible Patient (1) The individual receives a healthcare service at a facility or clinic site which is registered for the 340B Program and listed on the public 340B database; (2) The individual receives a healthcare service provided by a covered entity provider who is either employed by the covered entity or who is an independent contractor for the covered entity, such that the covered entity may bill for services on behalf of the provider; (3) An individual receives a drug that is ordered or prescribed by the covered entity provider as a result of the service described in (2); (4) The individual's healthcare is consistent with scope of the Federal grant, project, designation, or contract; (5) The individual's drug is ordered or prescribed pursuant to a health care service that is classified as outpatient; and (6) The individual's patient records are accessible to the covered entity and demonstrate that the covered entity is responsible for care."
9 Medicare Part D
10 Source: CMS Medicare Part D: Enrollment
11 Medicare Part D: Any Willing Pharmacy Rule Requires that Part D sponsors permit any pharmacy willing to accept its standard contracting terms and conditions to participate in its network The Part D sponsor s standard contracting terms and conditions must be reasonable and relevant CMS has indicated that reasonable and relevant standard terms and conditions include items such as licensure requirements, minimum liability insurance, or accreditation Standard terms and conditions, including reimbursement terms, may vary in different geographic areas and for different types of pharmacies The any willing pharmacy rule extends to PBMs or PSAOs authorized to negotiate and/or sign pharmacy network contracts on behalf of a pharmacy
12 Medicare Part D: Any Willing Pharmacy Rule In August 2015, CMS specified time frames for Part D sponsors to timely respond to requests for its standard terms and conditions and to enter into contracts based on the terms and conditions. Sponsors should provide the applicable standard terms and conditions document to the requesting pharmacy within two business days of receipt of the request.
13 OIG Developments
14 Free/Reduced Cost Drug Programs Advisory Opinion 15-11: Favorable advisory opinion issued on August 12, 2015 regarding a free drug program sponsored by pharmaceutical manufacturers in which an SP dispenses free drugs to patients experiencing delayed insurance verification, including patients insured under state or federal healthcare programs Factors considered by the OIG: Low Risk of Overutilization No Seeding No Prescriber Benefit Unlikely to influence beneficiaries to obtain federally payable prescriptions from the Pharmacy No Cost to Federal Healthcare Programs
15 Free/Reduced Cost Drug Programs Advisory Opinion 14-05: Favorable advisory opinion issued on July 28, 2014 regarding a direct-to-patient program sponsored by a pharmaceutical manufacturer in which an online SP dispenses drugs for a discounted cash price to patients, including Part D patients, In a manner that operates entirely outside federal healthcare programs Factors considered by the OIG: Patient Access: Drug may not be included on most third-party payer formularies Arrangement unlikely to influence beneficiaries to select SP or manufacturer for other products that are reimbursable Distinguishable from problematic carve out arrangements
16 Portals: An Increasing Trend Electronic Communication Pathways Between SPs and Physicians Anti-kickback and other F& A statutes apply Analyses are Very Fact-Specific. Consider potential differences among: A portal that is an electronic script transfer only A portal that is electronic script transfer PLUS allows checking status of script A portal that is electronic script transfer PLUS allows checking status of script PLUS allows a full clinical workup
17 Opinions Affecting Portals Opinion (March 25, 2015) Laboratory s Provision of Free Electronic Interface and Waiver of Charges of Out-of-Network Scenarios -- Unfavorable Opinion (August 25, 2014) SP s Payment to Local Retail Pharmacies for Support Services -- Unfavorable Opinion Laboratory s Payment of Per-Order Fees to EHR Vendor Unfavorable Consider these opinions against the long history of free fax machines and prior authorizations precedent from the OIG
18 Recent Opinions Affecting the New World of Portals Opinion (December 7, 2012) Pharmacy s provision of software to Community Homes While not recent, this opinion provides a good glimpse into how granular the OIG s analysis of portals might be: Degree of independent value that portal has to referral source Analysis of functionality of software Enhancements to patient safety and quality of care Risk of unfair competition Risk of overutilization or distorted medical decision-making Risk of data lock-in Interoperability
19 HIPAA and Refill Reminders
20 HIPAA: Refill Reminders September 2013 guidance document sets limits on the compensation SPs can receive for making certain communications. Questions that an SP should ask: Are the marketing rules implicated? If so, do the services potentially fall within the refill reminder exception? If so, is the SP better served by obtaining a patient authorization (and receiving the fair market value of the services) or limiting its compensation to the direct and indirect cost of the services? How does the SP operationalize the program?
21 Presenters Claire Miley Member, Bass, Berry & Sims Mike Hess Member, Bass, Berry & Sims
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