Keep Your Savings: 340B Audits and Ensuring Compliance

Keep Your Savings: 340B Audits and Ensuring Compliance

Disclosure This presentation reflects experience with the topics at hand and does not constitute legal advice, and does not reflect interpretation of guidance or agency perspective. 3

Objectives I. Understand How to Implement a 340B Program II. III. Review Implications for Certification Recognize What HRSA is Finding During the Audit Process 4

340B Program Overview A. The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. B. The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services*. C. Eligible health care organizations (covered entities) include HRSAsupported health centers and look-alikes, Ryan White clinics and State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, Children s hospitals, and other safety net providers. *H.R. Rep. No. 102-384(II), at 12 (1992) 5

340B Program Overview Average Savings of 25% - 50% Savings May be Used to: Reduce the Price of Medications for Patients Expand Services Offered to Patients Provide Services to More Patients 6

How to Enroll 1. Determine Eligibility 2. Complete Appropriate Forms and Submit Copies of Medicare Cost Report 3. OPA Verifies Forms and Validates Outpatient Sites 4. Await Decision From OPA 7

Registration Period Register By January 1 st - 15 th Start Date April 1 st April 1 st - 15 th July 1 st July 1 st - 15 th October 1 st October 1 st 15 th January 1 st 8

340B Participation 1. Set-up an Account with Wholesaler Using 340B ID 2. Contact the PVP to Discuss Participation in the Prime Vendor Program https://www.340bpvp.com/register/become-a-pvp-participant/ 9

Regulatory Requirements Diversion Drug is provided to an individual who is not a patient of that entity Drug dispensed in an area of a larger facility that is not eligible Duplicate Discount Accessing the 340B Discount and Medicaid Rebate on the Same Medication GPO Exclusion May not use a group purchasing organization (GPO) or arrangement when purchasing covered outpatient drugs 10

Duplicate Discounts HRSA Clarification 2/2013: Covered entities must determine whether they will use 340B drugs for their Medicaid patients (carve-in) or whether they will purchase drugs for their Medicaid patients through other mechanisms (carve-out). Covered entities are required to inform HRSA (by providing their Medicaid billing number) at the time they enroll in the 340B Program if they will purchase and dispense 340B drugs for their Medicaid patients (carve-in). This information will be reflected on the HRSA Medicaid Exclusion File so states and manufacturers know that drugs purchased under that Medicaid billing number are not also eligible for a Medicaid rebate. 11

Group Purchasing HRSA Clarification 2/2013 an authorizing official of a DSH, children s hospital, or free-standing cancer hospital must sign an acknowledgement of this statutory requirement. may not use a GPO for covered outpatient drugs at any point in time. 12

Regulatory Requirements Eligible Patients To be eligible to receive 340B-purchased drugs, patients must receive health care services other than drugs from the 340B covered entity. The only exception is patients of State-operated or funded AIDS drug purchasing assistance programs. Auditable Records Covered Entities must maintain auditable records that demonstrate compliance with all Program requirements. 13

Regulatory Requirements Eligible Patients To be eligible to receive 340B-purchased drugs, patients must receive health care services other than drugs from the 340B covered entity. The only exception is patients of State-operated or funded AIDS drug purchasing assistance programs. Auditable Records Covered Entities must maintain auditable records that demonstrate compliance with all Program requirements. 14

Annual Recertification What Are The Steps? 1. Ensure all Information in the 340B Database is Accurate 2. Email with Username and Password Sent to Authorizing Official 3. Authorizing Official Recertifies for ALL Sites of the Covered Entity 4. Authorizing Official Updates Any Required Information 5. Authorizing Official Certifies to 8 Statements 6. HRSA/OPA will Recertify or Decertify the Covered Entity 15

340B Program Components Eligible Covered Entities Application Process Application Checklist Covered Entities Policy and Procedure Audit Procedure Audit Report 16

Eligible Covered Entities HRSA Application Guide..\..\Pharmacy Law\340B\340bregistrationdsh.pdf Application Monitoring Procedure 17

Covered Entity Audits

Audits: Background HRSA began conducting oversight audits of 340B covered entities in January to assess compliance with statutory requirements: A. Will conduct random audit of a minimum of six (6) hospitals per month through 2012, all hospital types B. Targeted audits in cases of suspected violations 19

Government Audits HRSA began conducting audits in January 2012 Over 50 covered entities audited, including 5 targeted audits 400 covered entity audits expected in 2013 20

Covered Entity 340B Audit Data Request Two Days On-Site Overview of enrollment in the 340B program Eligibility and Participation Verification of Covered Entity Drug Purchasing Process for ordering, dispensing and billing drugs Purchasing approval limits and outlined policy Review of invoices, separation of duties in the purchasing process Review of who has access to purchase drugs Review bill to, ship to addresses Observation and Physical Audit Interviews with the buyers and receivers of drugs Tour of Hospital pharmacy, drug storage areas Review of medication inventory in the pharmacy department Audit of Automated Dispensing Cabinet batch fills to bring stock levels back to par levels 21

Compliance FOUR RISK AREAS Duplicate Discounts Medicaid Billing Diversion Group Purchasing Organization (GPO) Exclusion Contract Pharmacies May have to bill Medicaid at actual acquisition cost (AAC) or otherwise adjust billing process to protect manufacturers from duplicate discount problem Prohibition against reselling or transferring 340B drugs to anyone other than a patient DSH, children s and cancer hospitals may not purchase covered outpatient drugs through a GPO Contract pharmacy arrangements must comply with HRSA guidance and other federal and state laws, including antikickback statute 22

HRSA Audit Facilities Cited* 64 Total Audits Number of Audits with Findings Number of Audits with Sanctions 35 Findings, 55% of Total 26 Sanctions, 41% of Total * Audits listed as of May 8, 2014 23

HRSA Audit Findings Number of Audits with Incorrect 340B Database Record Number of Audits with Diversion 17 Findings, 27% of Total 17 Findings, 27% of Total Number of Audits with Duplicate Discounts 18 Findings, 28% of Total * Audits listed as of May 8, 2014 24

Next Steps Mega Reg Anticipate public comment period in July Aug 2014 25

Questions can also be e-mailed to: kmaxik@completerx.com 26