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Medicare Rural HospitalFlexibility Program Financial andOperational Webinar SeriesMay 21, 2020340B StrategiesThis program is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department ofHealth and Human Services (HHS) as part of an award totaling 510,424 with zero percentage financed with nongovernmental sources. The contents are those of the authors and do not necessarily represent the official views of, noran endorsement, by HRSA, HHS or the U.S. Government.Funding for this program was made possible by the Health Resources and Service Administration (HRSA) fundingopportunity HRSA-19-024.
BKD Health Care340BPrescriptionfor SuccessThis presentation should not be relied upon as legal advice.
340B StrategyStrategyLegislativeChangesCompliance340B Drug Pricing Program
Polling Question #1 Has your organization focused on theiroptimization of their 340B Program in the last12 months?A. YesB. NoC. Unsure
340B Drug Pricing ProgramOverview Federally mandated drug pricing program created in 1992 2020 marked the 28th year of the program Part of Public Health Service Act, section 340B & Medicaid rebate program Drug manufacturers must provide front-end discounts on covered outpatient drugs purchased bycovered entities Provides discounts on outpatient drugs purchased by “safety net” providers for eligiblepatients Intended to provide financial relief to facilities that provide care to medically underserved Average savings of 25 - 50% for eligible covered entities on outpatient drugs How are covered entities using 340B savings?Provide discounts ondrugs to patientsExpand services byprovider to patientsProvide services tomore patients
340B ngOrganization
DiversionDiversion Drugs can only be used on an outpatient basis for coveredentity’s patients as defined by HRSA Use for other individuals constitutes prohibited diversion Focus on defining “patient” and “covered entity”What is “covered entity”? Where services are provided Physicians must be employed or under a contractual or otherarrangement Entity should maintain a listing of approved 340B physicians
Medicaid Duplicate Discounts 340B laws prohibit application of both 340B price discount on front endand payment of pharmacy rebate to state Medicaid on back end for samedrug claim General options for covered entities Carve-out Medicaid - from 340B drug purchasesCarve-in Medicaid - requires verifying Medicaid exclusion file is accurate in 340BOPAIS Some states have been slow to establish and communicate Medicaidbilling requirements and potential modifiers Transition to Medicaid managed care has created confusion Covered entities should have mechanisms in place to identify Medicaid MCOContract pharmacies should not “Carve-in” Medicaid FFS and should review stateguidance and consult with legal on Medicaid MCOThe responsibility for avoiding duplicate discount is on the covered entity
Polling Question #2 As an organization, what is your biggest area ofcompliance concern for 340B?A. Duplicate discountsB. DiversionC. OPAIS registrationD. Contract pharmacyE. Eligibility of child sites
Medicaid Duplicate Discount Medicaid Apexus Tool Recommendation — Engage in ongoing dialogue with Medicaidpharmacy directors of the states where you file claims — a “win-win”solution may be available
Orphan Drugs These covered entity types must purchase all orphan drugs at non340B pricing Critical Access HospitalsSole Community HospitalsRural Referral CentersFree-Standing Cancer Hospitals Manufacturers are not required to provide these covered entitiesorphan drugs under the 340B Program. A manufacturer may, at itssole discretion, offer discounts on orphan drugs to these hospitals 340B Like Pricing October 14, 2015 — U.S. District Court for District of Columbia ruledon Orphan Drug Interpretation HRSA lacks the authority to allow 340B pricing for orphan drugs usedfor common indications
Contract Pharmacy HRSA allows providers to enter into arrangements with multiple contractpharmacies to dispense 340B drugs to qualifying patients of providers Covered entity is responsible for compliance and must monitor contractpharmacies Monitor and self audit Are the settings, eligibility requirements, rules and testing parameters effectivelyidentifying 340B transactions and excluding ineligible transactions? HRSA recommends independent audits Child sites, outpatient clinics Retail pharmacy 340B software Brand vs. generic Do you periodically review your contract pharmacy arrangements?
Replenishment Model Virtual inventory Receive discounts based on the drugutilization by covered outpatients Retrospective procurement is used to realizethe discounts based on utilization Eligibility requirements should meet 340Bpatient definitionFigure obtained from the 340B Prime Vendor Program
Replenishment Model 340B split billing software maintains and converts the drug quantityadministered in the IT data feed to the National Drug Code (NDC)wholesaler purchase quantity that is eligible to be replenished on the340B accountFigure obtained from the 340B Prime Vendor Program
340B Software Accumulator maintenance Crosswalk Utilization data sources and queries Purchasing trends Rules and filters Reports Multiple contract pharmacy split-billing vendors EHR billing conversions
340B Strategy - Approach 340B Team Policies and procedures Documented use of savings Internal monitoring Medicaid BIN/PCN/Groups Eligible locations Contract pharmacy qualification parameters Internal audit Mock audit procedures Frequency and sample Independent external reviews Operational Compliance
340B Strategy - Opportunities Apexus Prime Vendor Program Contract pharmacy arrangements Medicaid Carve-In Clinic conversions / Child sites Orphan Drugs Legislative changes Direct vendors Biosimilars
Telemedicine 340B eligibility Refills 30 day vs. 90 day supply Future regulation Expansion of patient population Expansion of contract pharmacy arrangements
Polling Question #3 As you think about your answer to biggest area ofcompliance concern for 340B, do you have abetter understanding of how to address the issue?A. YesB. NoC. Unsure
Polling Question #4 What is a topic from today’s presentation that you cantake back and implement in the next 90-120 daysA. Contract pharmacy arrangement expansionB. Carving in MedicaidC. Clinic conversions / child site expansionD. TelemedicineE. All of the above
Future Outlook
Questions?Brian Bell, Managing Directorbbell@bkd.com
Thank you!bkd.com/hc @BKDHCThe information contained in these slides is presented by professionals for your information only and is not tobe considered as legal advice. Applying specific information to your situation requires careful consideration offacts & circumstances. Consult your BKD advisor or legal counsel before acting on any matters covered.
Thank you for your participation.Please assist us by completing the evaluation thatwill follow via email approximately one hour afterthe conclusion of this discussion.
340B split billing software maintains and converts the drug quantity administered in the IT data feed to the National Drug Code (NDC) wholesaler purchase quantity that is eligible to be replenished on the 340B account Figure obtained from the 340B Prime Vendor Program
