Implementing a System-wide 340B Program

Transcription

1 Implementing a System-wide 340B Program An Overview Steve Pitzer System Executive, Supply Chain Management CHRISTUS Health Sam Colletti, RPh Director of Enterprise Accounts- CHRISTUS Health Broadlane

2 Objectives CHRISTUS Supply Chain Management Review of 340B Program CHRISTUS Implementation of a System-Wide 340B Program Indentifying appropriate Staff, Departments, resources Identify challenges and prohibitions to facilities Tracking results Update of Current Legislative Activity and Implications to Eligible Healthcare Facilities

3 CHRISTUS Health Supply Chain in Collaboration with Broadlane and Supplier Partnerships Steve Pitzer, System Director Supply Chain Management

4 CHRISTUS Health 1999 two historic Catholic charities formed CHRISTUS Health: Sisters of Charity Health Care System Incarnate Word Health System Mission: To extend the healing ministry of Jesus Christ Top 10 Catholic health system in U.S. 43 hospitals / 16 long-term acute care facilities across 8 states and Mexico Net patient revenues exceeding $2.6 billion Charity Care Community Benefit 2.8 million Assets totaling more than $4.3 billion Supplies, Purchased Services, and Energy $957million 4 Confidential Not For Distribution

5 Supply Chain Collaboration Quality & Safety Savings = Savings RASMUS Information Management variability = predictable outcomes Waste leads to risk MD s and stakeholders Listen and educate High value vs. Low impact Multi-disciplinary Educational Clinical & Non-Clinical Committees Pharmacy & Nursing Flexible Multi-disciplinary Physician preference items 5 Confidential Not For Distribution

6 CHRISTUS Health Committee collaboration 6 Confidential Not For Distribution

7 Inclusive approach has driven performance improvements Collaboration and input from key corporate stakeholders results in less variability through system standards, formulary development, and increased compliance 7 Confidential Not For Distribution

8 Supply Expense as a % of Total Operating Revenue Fiscal Year % of Total Operating Revenue % % % % % % % 8 Confidential Not For Distribution

9 Adding to Community Benefit Managing Resources is a cornerstone of providing community benefit CHRISTUS examines every piece of the supply chain for opportunities Pharmacy Indigent drug recovery program from manufacturers 340B Program Community grants for local outreach programs 9 Confidential Not For Distribution

10 Implementing a System-wide 340B Program Sam Colletti, RPh Director of Enterprise Accounts- CHRISTUS Health Broadlane

11 340B Drug Pricing Program The initial barriers to hospital pharmacy Awareness Fear of Federal Audits and Regulation Program created in 1992 Provides discounts on outpatient drugs to various covered entities Manufacturers that participate in Medicaid must sign an agreement to participate in 340B Drug Pricing Program

12 340B Covered Entities HRSA Grantees CHC, HTC, RW CDC Grantees STD, TB Family Planning Clinics Urban 638 Tribal Programs Federally Qualified Health Center (FQHC) Look-A-likes Disproportionate Share Hospitals (DSH)

13 PPS Hospitals* with a Disproportionate Patient Percentage Ratio Greater than and Core Based Statistical Areas (CBSAs), 2004 RURAL DSH HOSPITALS Alaska and Hawaii not to scale Metropolitan Status (# of Counties) Hospitals by Type of Control (# of Hospitals) Sources: US Census Bureau, 2003; CMS Provider Specific File, 2004; CMS OSCAR File, Produced By: North Carolina Rural Health Research and Policy Analysis Center, Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill. Metropolitan (1090) Micropolitan (690) Neither (1361) For Profit (79) Government (175) Non-profit (193) *Note: Only hospitals outside of metropolitan counties are included. Hospitals are mapped to the ZIP code centroid. TOTAL - 447

14 Additional Eligibility Requirements In addition to meeting the 340B DSH Adjustment Percentage requirement (>11.75%), a rural hospital Must be a public hospital owned or operated by a unit of State or local government OR Must be a private, non-profit hospital under contract with a State or local government to provide health care services to low income individuals not eligible for Medicare or Medicaid Must not purchase outpatient drugs through a Group Purchasing Organization Applies to covered patients only. Facility may utilize a GPO for other patients.

15 Why Participate in 340B? Cost savings of 20%-50% on outpatient drug purchases Option to purchase outpatient drugs below 340B prices through participation in the 340B Prime Vendor Program (PVP) Option to negotiate reduced prices for inpatient drugs (Current healthcare legislation pending.) Pricing typically 20-25% below negotiated GPO prices. Oncology drugs often 30-40% below GPO prices.

16 What Drugs Are Covered? Covered drugs: Outpatient Prescription drugs (includes hospital outpatient areas such as ER, OP OR, cancer centers, infusion centers, etc.) Over-the-counter drugs (if accompanied by a written prescription) Non-covered drugs: Vaccines Drugs given to the patient in inpatient care settings (limited exception pricing offered by manufacturers through the prime vendor program.)

17 Estimated Prices For Selected Public Purchasers, as % Average Wholesale Price 0% 20% 40% 60% 80% 100% AWP 100.0% AMP 80.0% Medicaid (Min.) Medicaid Net FSS 340B FCP 67.9% 60.5% 51.7% 49.0% 47.9% Private Sector Pricing VA Contract 34.6% Stephen Schondelmeyer, PRIME Institute, University of Minnesota (2001)

18 Savings may be used to: serve more patients expand formulary expand services subsidize prescriptions

19 Contact hospital s Finance Dept. to obtain Disproportionate Share Adjustment Percentage If >11.75% (based on most recent cost reporting period) Download 340B registration forms If < 11.75% PUBLIC HOSPITALS 340 Program Enrollment Letter PRIVATE NON-PROFIT HOSPITALS STOP HERE! Ineligible for 340B Supporting documentation: Verify state/local Government owned/operated Certification of contract with state/local government Submit all forms to: HRSA/HSB/OPA Mail Stop 10C Fishers Lane Rockville, MD Certification of non-participation in GPO

20 Technical Assistance (Key web sites) HRSA Office of Pharmacy Affairs 340B Prime Vendor Program Safety Net for DSH ( Advocacy Organization) CHRISTUS is a member of the Safety Net organization.

21 CHRISTUS Implementing a System-Wide 340B Program as a Strategic Sourcing Initiative

22 Pre-2000 CHRISTUS Initially each facility/region attempted to qualify independently at the direction of the finance department. Only 3/19 facilities had attempted to qualify. No acknowledgement of the supply chain opportunity. Project Initiation After identifying the need for a centralized group effort directed by pharmacy instead of finance the group qualified 15/19 facilities. Two facilities subsequently lost qualification due to patient mix for several quarters after recent hurricanes. With requalification and acquisitions CHRISTUS now has 19/24 facilities qualified.

23 340B Facility Assessment and Enrollment Business Case: Currently CHRISTUS facilities either qualify or have high potential for DSH enrollment. Based on Broadlane's support and assistance, attempts to enroll the following CHRISTUS facilities will provide cost effective opportunities for the pharmacy programs. Only 3/18 facilities are enrolled at initial evaluation. Benefit Analysis: Contract/Initiative Description Contract Strategy Effective Date 340B Enrollment Support Achieve best outpatient pricing scenario Annualized Outpatient Spend Projected Impact of 340B Program Annualized Increase / (Decrease) to spend 1/1/06 $35,000,000 $9,800, % Implementation Timeline / Milestones / Next Steps: All potential facilities(15/19) have qualified as of March 31,2007. Only CHRISTUS St John s, CHRISTUS St Catherine s, CHRISTUS St Patrick s, and CHRISTUS St Michael s do not have sufficient indigent care to qualify at this time. 19/22 potential facilities are qualified as of June Potential Barriers to Implementation & Recommended Solution Addition of web based software needed for program management. Overly conservative financial calculations by finance departments. Low level of understanding of the federal program by facilities and the potential impact Staff training needs Financial, clinical, pharmacy data interface requirements. Owners: Sam Colletti, BL Pharmacy SLD, Steve Pitzer, CHRISTUS Executive Sponsor

24 Involvement CHRISTUS Departments Pharmacy, Finance, IT, Social Services, Business Office, Outpatient Services, Corporate Compliance, Corporate Supply Chain Executive Outside Groups GPO( Broadlane) Wholesaler ( McKesson, PHS) Organizations/ Advocacy SNAPHA( Safety Net for Pharmaceutical Access) 340B Prime Vendor Program

25 Management and Support Tools CHRISTUS currently has enrolled the entire IDN in SNAPHA, an advocacy group for 340B hospitals which provides assistance in managing the program, legal services, and lobbying efforts. CHRISTUS currently utilizes a single program management software solution provided by their wholesaler to provide virtual inventory management, product ordering and audit trails at each 340B qualified facility. CHRISTUS initially added additional consultants with specific expertise in 340b program development. Monitoring and coordination of efforts by GPO consulting staff and Corporate Executive Sponsor.

26 CHRISTUS Health Previous State 3/19(16%) potential DSH entities qualified No local or system evaluation Annualized Savings under DSH = $2,200,000 Current State 19/24(80%) potential DSH entities qualified 3 entities pending evaluation 2 will not qualify due to local demographics. System Total Drug Spend= $128,000,000 System Outpatient Spend (DSH eligible) = $37,000,000 FY09 Annual Savings under DSH = $9,500,000

27 Results Change from 16% of all facilities participating in the program to 80% of all facilities. System wide standard for management of the program and compliance with federal regulations. Significant Improvement in profitability of outpatient infusion and oncology services across the system. Significant increase in Community Outreach services without degrading business models.