Federal 340B Drug Pricing Program
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1 2015 CliftonLarsonAllen LLP Federal 340B Drug Pricing Program March 6, 2015 Continuous learning in action
2 Learning Objectives Explain the intent of the Federal 340B Drug Pricing Program List the eligibility requirements for participation in the 340B Program Describe the 340B Program compliance and integrity requirements Identify 340B hot topics for
3 2014 CliftonLarsonAllen LLP 2015 CliftonLarsonAllen LLP Federal 340B Pricing Program Overview 3
4 Background 1990 Medicaid Drug Rebate Program Omnibus Budget Reconciliation Act 1992 Veterans Health Care Act Section 340B of the Public Health Services Act 2010 Affordable Care Act Expanded Program 4
5 Oversight Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) Operational Informatics Program Performance and Quality (2014) 340B Prime Vendor Program Apexus 5
6 Hospitals Non-Hospitals 2015 CliftonLarsonAllen LLP Qualified Covered Entities Disproportionate Share Hospital Children s Hospital Critical Access Hospital Free Standing Cancer Centers Rural Referral Center Sole Community Hospital FQHC and look-alikes AIDS Drug Assistance Programs Ryan White Grantees Tuberculosis Clinics Black Lung Clinics STD and Family Planning Clinics Public Housing Clinics Homeless Clinics Hemophilia Treatment Centers Urban Indian/Native Hawaiian 6
7 Disproportionate Share Hospital Adjustment > 11.75% DSH Hospitals Children s Hospitals Free Standing Cancer Centers 8% Sole Community Hospitals Rural Referral Centers Exempt Critical Access Hospitals 7
8 Growth in 340B Program July Jan , ,173 Hospital Hospital Covered Entities Covered Entities 7,000 Contract Pharmacies 36,000 Contract Pharmacies 8
9 2014 CliftonLarsonAllen LLP 2015 CliftonLarsonAllen LLP Federal 340B Program Compliance 9
10 Key Compliance Elements Registration 340B Database Prescription Eligibility Duplicate Discount Procurement & Inventory Reports & Documentation Audits 10
11 HRSA Database Registration 340B Database Initial Registration with HRSA Contract with State/Local Government Annual Recertification Failure to recertify will result in removal from the 340B program Child Sites As listed on Medicare Cost Report Contract Pharmacy Arrangements 11
12 Patient Definition Prescription Eligibility CE has established a relationship with the individual and maintains the individual s health care records The individual receives health care services from a professional employed or under contractual or other arrangement with the CE The individual receives a health care service within the scope of services of the CE (FQHC and look-alikes ) 12
13 Eligibility Determination Prescription Eligibility Verify Site Eligibility Verify Patient Eligibility Verify Provider Eligibility Verify Service Eligibility Verify Medicaid Eligibility Clinic registered on HRSA database and reimbursable outpatient cost center on Medicare Cost Report CE maintains records of patient s health care Provider is employed or contracted with CE Service is in scope of grant (FQHC) Carve-in Carve-out 13
14 Procurement & Inventory Procurement & Inventory GPO Exclusion DSH, free-standing cancer hospitals and children s hospitals Orphan Drug Exclusion Free-standing cancer hospitals, rural referral centers, sole community hospitals, and critical access hospitals Anti-Diversion Inventory Controls/Compliance Covered entities must not resell or otherwise transfer 340B drugs to ineligible patients. Product purchased by the entity at 340B prices is justified by prescription dispensing records. 14
15 In-House Pharmacy Procurement & Inventory 340B Qualified Patient Drug Wholesaler Covered Entity Money Medication 15
16 Contract Pharmacy Arrangement Procurement & Inventory Drug Wholesaler Revenue/Copay Covered Entity Dispensing Fee 340B Qualified Patient Money Medication Third Party 16
17 Records and Documentation Reports & Documentation Detailed Policies and Procedures Definitions (outpatient, inpatient, material breach) Key compliance elements 340B drug procurement, replenishment and inventory processes Data transmission and analysis Contract pharmacy compliance Identify how savings are used Roles and responsibilities 17
18 Audits Audits Annual HRSA database Contracts Independent audit Policies and procedures Quarterly Provider file update (additions/deletions monthly) Payor filter review Site file update Split billing configuration options Weekly Utilization Accumulations Purchase reconciliation with invoice Duplicate discounts 18
19 2014 CliftonLarsonAllen LLP 2015 CliftonLarsonAllen LLP What s in store for the Federal 340B Program? 19
20 2015 Initiatives Increase in Program Audits Double the number of covered entities Develop protocols for pharmaceutical manufacturers OIG Work Plan Part B payments for drugs purchased under the 340B Program New GAO Study of 340B Commissioned by the House Energy & Commerce Health Subcommittee Medicare reimbursement for 340B 20
21 2015 Initiatives (continued) 340B Orphan Drug Exclusion HRSA to Issue 340B Omnibus Guidance Clarify hospital eligibility standers Definition of a 340B patient Medicaid Managed Care Verification of Ceiling Prices HRSA Upcoming Regulatory Actions Manufacturer civil monetary penalties proposed rule Calculation of ceiling price Dispute resolution system 21
22 Questions? Thank You!
23 2014 CliftonLarsonAllen LLP 2015 CliftonLarsonAllen LLP Cheryl Hetland Director twitter.com/ CLAconnect facebook.com/ cliftonlarsonallen linkedin.com/company/ cliftonlarsonallen 23
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