340b university 340b university is attended by 340b entities, ... negotiates sub-ceiling 340b...

April 16, 2016

340B UNIVERSITY™

Alexandria Edition

340B University About Apexus

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2016 Apexus LLC. All rights reserved. 01152016

ABOUT APEXUS Apexus works with more than 25,000 healthcare providers across the U.S. to lower their costs for purchasing outpatient pharmaceutical products, allowing them to stretch their resources to serve more low-income and uninsured patients. Apexus serves as the exclusive contractor for the 340B Drug Pricing Program, managed by the Health Resources and Services Administration (HRSA). As the 340B Prime Vendor, Apexus negotiates significant discounts for branded and generic pharmaceuticals while working with providers to help them comply with 340B laws and rules. Apexus works closely with HRSA’s Office of Pharmacy Affairs to optimize the value of the 340B Drug Pricing Program.

OUR MISSION The mission of Apexus is to leverage our expertise and resources in delivering maximum value to 340B stakeholders, through the promotion of program integrity, compliance, and effectiveness of the 340B Drug Pricing Program.

DELIVERING VALUE Apexus serves the 340B program in four key ways:

1. Negotiating with hundreds of pharmaceutical companies to obtain savings on thousands of products and services.

2. Providing a national network of traditional and specialty distributors to enable 340B priced medications to reachparticipating hospitals and clinics.

3. Managing the national 340B call center, Apexus Answers for all stakeholders

4. Creating 340B University™, a HRSA endorsed training program to assist stakeholders in remaining fullycompliant with 340B rules and regulations.

PROTECTING INTEGRITY To protect the integrity of the 340B program, Apexus established the 340B University, an in-depth educational program for all stakeholders and operates Apexus Answers, a national call center available to answer stakeholder questions to support stakeholder compliance and program integrity. Apexus receives no government funds to perform any of these services.

340B UNIVERSITY Apexus created the 340B University to help covered entities understand 340B policy and maintain compliant pharmacy programs. The 340B University is attended by 340B entities, pharmaceutical manufacturers, 340B vendors and consultants as well as representatives from state and federal government agencies. In 2014, Apexus held 14 340B University training sessions in eight states, serving the educational needs of more than 3,000 attendees.

In 2015, Apexus is expanding its educational offering by incorporating 340B University OnDemand™, and in early 2016, a certificate program for individuals providing specialized 340B training to pharmacy staff and 340B consultants. The Apexus Advanced 340B Certificate Program™, which is beyond the scope of the prime vendor agreement, is an assessment-based certificate program for individuals and will provide eLearning modules with practical solutions focused on integrity and compliance.

APEXUS ANSWERS Apexus operates a high-quality call center for all 340B inquiries—accepting questions via phone calls, e-mail, and live chats. All stakeholders look to Apexus Answers for detailed and trusted compliance guidance, knowing that Apexus staff members are regarded as accessible 340B experts. Apexus recognizes the priority that HRSA places on program integrity, thereby recognizing its role to understand HRSA-created policy and effectively communicate it accordingly.

Handout Page 1

340B University About Apexus

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2016 Apexus LLC. All rights reserved. 01152016

ABOUT THE 340B PRIME VENDOR PROGRAMThe prime vendor program (PVP) was established by HRSA to provide a consolidated contracting and distribution processfor covered entities. Since 2005, HSRA has contracted with Apexus to fill this role of public-private partnerships inadministering the 340B program, and has recently extended the contract through September 29, 2019.

The PVP was established to increase the discounts already offered under Section 340B of the U.S. Public HealthServices Act. As the prime vendor, Apexus negotiates sub-ceiling discounts on outpatient drug purchases and discountson other pharmacy-related products and services for participating public hospitals, community health centers, and othersafety-net health care providers that elect to join the program. Further, with recent changes to the 340B regulations, theprogram provides the only legal means for certain 340B-eligible hospitals to conduct group purchasing for outpatientcovered drugs.

The Primary Role of the Prime Vendor

Establishes distribution solutions and networks that improve access to affordable medications Negotiates sub-ceiling 340B pricing on branded and generic pharmaceuticals Negotiates sub-WAC pricing on branded drugs for hospitals subject to the GPO Prohibition Contracts for other value-added pharmacy-related products

Apexus is continually working to add distributors to the prime vendor network and negotiate a portfolio of drugs belowthe 340B ceiling pricing, so health care organizations participating in the 340B PVP will maximize additional savings,benefits, and value.

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ul timately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of its program integrity efforts.

© 2016 Apexus. Permission is granted to use, copy, and distribute this work solely for 340B covered entities and Medicaid Agencies.

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340B University Page 1

Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2016 Apexus. All rights reserved. 01152016 Version 09152014

Purpose: The purpose of the 340B Acronym Guide is to define common acronyms used in the 340B program.

Term Definition

340B ceiling price The maximum price drug manufacturers can charge for a 340B-purchased drug. 340B Ceiling Price =

Generic: AMP – URA

Brand: AMP – (AMP-Best Price) (if lower than AMP – URA) If AMP is rising faster that the rate of inflation an additional discount is owed:

AMP current – (CPI – U current/CPI – U baseline) * AMP baselineURAs:

Brand-name drugs ([single source] and [innovator]) = 23.1% Generic drugs (non-innovator multiple source drugs (N]) = 13% Hemophilia and pediatric drugs = 17.1%

340B covered entity (CE)

340B covered entities are facilities/programs listed in the 340B statute as eligible to purchase drugs through the 340B program and appear on the HRSA 340B Database.

340B covered outpatient drug (COD)

A covered outpatient drug, defined in 1927(k) of the Social Security Act (SSA), is summarized as: An FDA-approved prescription drug, an over-the-counter (OTC) drug that is written on a prescription, a biological product that can be dispensed only by a prescription (other than a vaccine), or FDA-approved insulin.

340B Drug Pricing Program (340B program)

Section 340B of the Public Health Service (PHS) Act (1992) requires drug manufacturers participating in the Medicaid Drug Rebate Program to sign a pharmaceutical pricing agreement (PPA) with the Secretary of Health and Human Services. This agreement limits the price manufacturers may charge certain covered entities for covered outpatient drugs. The resulting program is the 340B Drug Pricing Program.

340B-eligible patient In summary, an individual is a “patient” of a covered entity (with the exception of state-operated or -funded AIDS drug purchasing assistance programs) only if:

1. The covered entity has established a relationship with the individual, such that the coveredentity maintains records of the individual’s health care;

2. The individual receives health care services from a health care professional who is eitheremployed by the covered entity or provides health care under contractual or otherarrangements (e.g., referral for consultation) such that responsibility for the care providedremains with the covered entity; and

3. The individual receives a health care service or range of services from the covered entity thatis consistent with the service or range of services for which grant funding or federally qualifiedhealth center lookalike status has been provided to the entity. Disproportionate sharehospitals are exempt from this requirement.

An individual will not be considered a “patient” of the entity for purposes of 340B if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting. An individual registered in a state-operated AIDS drug purchasing assistance program receiving financial assistance under title XXVI of the PHS Act will be considered a “patient” of the covered entity for purposes of this definition if so registered as eligible by the state program.

Handout Page 3

ftp://ftp.hrsa.gov/bphc/pdf/opa/FR05071993a.htm

http://www.hrsa.gov/opa/eligibilityandregistration/index.html

http://www.ssa.gov/OP_Home/ssact/title19/1927.htm


http://www.hrsa.gov/opa/programrequirements/phsactsection340b.pdf

http://www.hrsa.gov/opa/programrequirements/phsactsection340b.pdf

ftp://ftp.hrsa.gov/bphc/pdf/opa/FR10241996.htm

340B University Page 2 Glossary of 340B Terms


Term Definition

340B ID A unique identification number provided by HRSA to identify a 340B-eligible entity on the 340B Database. This 340B ID is used to purchase 340B drugs.

340B Orphan Drug List (published by HRSA)

HRSA’s list of orphan drug designations used by 340B stakeholders to ensure compliance with the Orphan Drug Exclusion. The list is updated quarterly and is based on the list of orphan drug designations provided by the U.S. FDA, Office of Orphan Products Development. Covered entities may need to conduct additional analyses of the drugs provided on HRSA’s list to determine the appropriate drugs to exclude for 340B Program purposes. The list is posted at http://www.hrsa.gov/opa/programrequirements/orphandrugexclusion/index.html.

340B Prime Vendor Program (PVP)

HRSA is required by the 340B statute to establish a prime vendor program. This PVP is responsible for securing sub-ceiling discounts on outpatient drugs and discounts on other pharmacy-related products and services for participating 340B entities. The current 340B Prime Vendor Program (PVP) is managed by Apexus, through a contract awarded by HRSA. Apexus serves participants in three primary roles:

1. Negotiates sub-ceiling 340B pricing on branded and generic pharmaceuticals 2. Establishes distribution solutions and networks that improve access to affordable medications 3. Provides other value-added pharmacy-related products and services to its participants

5i drugs 5i drugs are drugs that are inhaled, infused, instilled, implanted, or injectable. This definition is pending a proposed CMS rule, and there may be an alternate AMP calculation for these drugs.

Accountable care organizations (ACOs)

Groups of doctors, hospitals, and other health care providers that come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program. HRSA has issued a policy release regarding 340B and ACOs.

Actual acquisition cost (AAC)

The net cost of a drug paid by a pharmacy. AAC may vary by container size and whether or not the drug was purchased from a manufacturer or wholesaler. AAC typically includes discounts, rebates, chargebacks, and other price adjustments, but excludes dispensing fees. States may define AAC differently for purposes of Medicaid reimbursement, and some states ask entities to determine or reimburse using an “estimated acquisition cost.”

AMP true-up An AMP true-up occurs when manufacturers restate their reported AMP for a specific time period and then refund any difference to 340B participating entities that had made purchases at the incorrect price.

Apexus A for-profit entity that is currently contracted as HRSA’s 340B Prime Vendor. Apexus has its own board of directors, including covered entity organizations and industry experts. The organization is self-funded through nominal administration fees from its contracted suppliers and is responsible for meeting the contractual requirements of the 340B Prime Vendor agreement. The current agreement expires in 2019.

Apexus Generics Portfolio (AGP)

The Apexus Generics Portfolio offers discounts on noncontract items for which entities currently pay wholesaler acquisition cost (WAC) pricing. Apexus provides the AGP for outpatient covered and noncovered drugs; this portfolio provides discounted contract pricing, which has no reference to the 340B ceiling pricing, although it can be lower than 340B. The APG is subcontracted to wholesalers and extended to Apexus participants.

Apexus PVP sub-340B Apexus PVP sub-340B pricing reflects pricing that is negotiated by Apexus with branded and/or generic manufacturers offering sub-340B pricing.

Apexus PVP sub-WAC Apexus PVP sub-WAC contracted pricing allows entities subject to the GPO Prohibition to order covered outpatient drugs in situations that would otherwise require the entity to purchase at WAC pricing. This pricing is negotiated without regard to 340B pricing and use of this pricing is GPO Prohibition compliant. Pricing is negotiated for outpatient covered drugs at sub-WAC or GPO-similar prices.

Handout Page 4

http://opanet.hrsa.gov/opa/CESearch.aspx

http://www.hrsa.gov/opa/programrequirements/orphandrugexclusion/index.html

https://www.340bpvp.com/about-us/

https://www.340bpvp.com/about-us/

http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Benefits/Prescription-Drugs/Downloads/CMS%E2%80%932345%E2%80%93P.pdf

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/ACO/

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/ACO/

http://www.hrsa.gov/opa/programrequirements/policyreleases/accountablecare05232012.pdf

http://medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Benefits/Prescription-Drugs/Downloads/StateReimbChart2Q2012.pdf

https://www.340bpvp.com/controller.html



Term Definition

Apexus value-added As HRSA’s 340B Prime Vendor, Apexus is authorized to contract for other products and services required by the outpatient pharmacy environment. Other value-added contracts are for noncovered drugs such as vaccines, blood glucose monitoring supplies, prescription vials and labels, and discounts on service contracts such as pharmacy automation hardware and software.

Average manufacturer price (AMP)

AMP is the average unit price paid in the United States to the manufacturer by wholesalers for drugs distributed to the retail pharmacy class of trade, after deducting customary prompt-pay discounts (excluding direct sales to hospitals and health maintenance organizations, and to wholesalers where the drug is re-labeled under the distributor’s National Drug Code [NDC] number). Originally created as a benchmark by Congress to aid in calculating Medicaid rebates, several legislative changes have recently affected the definition of AMP. A CMS proposed rule is pending that addresses the AMP definition. Because 340B is calculated based on AMP, changes in this proposed rule will result in changes to the 340B program. The base AMP is the calculated AMP for the first full quarter after the market date of the drug.

Average sales price (ASP)

Originally created during drug pricing litigation to ensure accurate price reporting, ASP is the weighted average of all non-federal sales to wholesalers. ASP is net of chargebacks, discounts, rebates, and other benefits tied to the purchase of the drug product, regardless of whether it is paid to the wholesaler or the retailer. Excluded from ASP are sales that are excluded from the best price calculation. ASP is used as a basis of reimbursement for some Medicare Part B covered drugs and biologicals administered in hospital outpatient departments.

Average wholesale price (AWP)

AWP is a publicly available, national average of list prices charged by wholesalers to pharmacies. AWP is not defined in legislation, and does not account for discounts. It is sometimes referred to as a “sticker price,” as it is not an actual price paid by most purchasers. AWP was once used as a primary basis of pharmacy reimbursement, but there is a trend moving away from this practice.

Banking Banking occurs when an entity was initially registered in the HRSA 340B Database as participating, but for a period of time did not place 340B purchases. At some point later in time, the entity places large 340B replenishment orders based on 340B “banked” orders that theoretically could have been placed previously, but were not. HRSA has not authorized the use of a credit/rebill, banking, or similar process to re-characterize previous transactions. Covered entities participating in the 340B program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, the entity should first notify manufacturers and ensure that all processes are fully transparent, with a clear audit trail that reflects the actual timing and facts underlying a transaction. The covered entity retains responsibility for ensuring full compliance and integrity of its use of the 340B program.

Best price (BP) See Medicaid best price.

“Big 4” The federal government’s four largest purchasers of pharmaceuticals: Department of Veterans Affairs (VA), Department of Defense (DoD), Public Health Service (PHS), and Coast Guard.

Billing address The HRSA 340B Database uses the “billing address” field to denote the address verified as belonging to the covered entity. A billing address is not required to be a physical address; it can be a P.O. box or other mailing address.

Bundled sales An arrangement, regardless of physical packaging, under which the rebate, discount, or other price concession is conditioned on the purchase of the same drug, drugs of different types (that is, at the nine-digit NDC level), or another product or some other performance requirement. Example of such performance requirements include the achievement of market share, inclusion or tier placement on a formulary, or the resulting discounts or other price concessions being greater than those that would have been available had the bundled drugs been purchased separately or outside the bundled arrangement.

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http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html?redirect=/McrPartBDrugAvgSalesPrice/

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html?redirect=/McrPartBDrugAvgSalesPrice/

http://www.oig.hhs.gov/oei/reports/oei-03-11-00060.pd

http://www.oig.hhs.gov/oei/reports/oei-03-11-00060.pd

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/64xx/doc6481/06-16-prescriptdrug.pdf

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=03d02d0013cb7d59c260dff49f654ac5&rgn=div8&view=text&node=42:4.0.1.1.12.8.136.2&idno=42



Term Definition

Carve-out/carve-in See Medicaid carve-out/Medicaid carve-in.

Centers for Medicare and Medicaid Services (CMS)

The federal agency charged with implementing and overseeing the Medicare and Medicaid programs.

Chargeback A chargeback is the method wholesalers use to request reimbursement from manufacturers for 340B discounts provided to entities for 340B covered outpatient drugs. Wholesalers purchase drugs from the manufacturer at wholesale acquisition cost (WAC), but sell to 340B entities at the contracted 340B price, which is much less. The wholesaler submits a chargeback request to the manufacturer to account for the difference.

Children’s hospital (PED)

These nonprofit hospitals serve individuals under 19 years old and have a CMS-issued 3300 Series Medicare Provider Number to designate them as Medicare certified children’s hospitals. Children’s hospitals must meet certain requirements, including a DSH adjustment percentage >11.75% and compliance with the GPO Prohibition, to be eligible to participate in the 340B program.

Consumer Price Index-Urban (CPI-U)

The Consumer Price Index-Urban (CPI-U) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. CPI-U is used in determining whether or not to apply a penalty to the manufacturer for the 340B ceiling price for single-source and innovator multiple-source drugs.

Contract pharmacy 340B covered entities may contract with a pharmacy or pharmacies to provide services to the covered entity’s patients, including the service of dispensing the entity-owned 340B drugs. To engage in a contract pharmacy arrangement, the entity and pharmacy (or pharmacies) must have a written contract that aligns with the compliance elements listed in guidance, and must list the contract pharmacy on the HRSA 340B Database during a quarterly registration period. Typically, a bill-to (entity)/ship-to (pharmacy) arrangement is used.

Corporate integrity agreement (CIA)

OIG negotiates CIAs with health care providers and other entities as part of the settlement of federal health care program investigations arising under a variety of civil false claims statutes. Drug manufacturers sometimes enter into CIAs as a result of pricing calculation settlements.

Critical access hospital (CAH)

A critical access hospital is a hospital certified to receive cost-based reimbursement from Medicare. This reimbursement is intended to improve the hospital’s financial performance, thereby reducing hospital closures. CAHs are certified under different, more flexible Medicare conditions of participation (CoP) than that of acute care hospitals, and must meet certain criteria to be designated as CAHs. For the purposes of 340B, CAHs must meet specific 340B eligibility criteria, including abiding by the orphan drug prohibition. CAHs are not subject to the 340B program’s GPO Prohibition.

Deficit Reduction Act, 2005 (DRA)

This federal legislation permitted manufacturers to include certain sales to 340B entities as nominal prices, and initially conferred 340B eligibility for children’s hospitals.

Dispensing fee A dispensing fee is the charge for the professional services provided in association with prescription dispensing. Most prescription payers reimburse on the basis of a benchmark of the drug cost (e.g., ASP, AMP, AWP, WAC, AAC) plus a dispensing fee.

Disproportionate share adjustment (DSH rate)

See Medicare DSH adjustment percentage.

Disproportionate share hospital (DSH)

Disproportionate share hospitals serve a significantly disproportionate number of low-income patients; as such, they receive adjustment payments to provide additional help. The primary method of qualification is based on the sum of the percentage of Medicare inpatient days and the percentage of total patient days attributable to patients eligible for Medicaid but not eligible for Medicare Part A. Among other requirements, DSHs must have a DSH adjustment percent >11.75% to be 340B eligible.

Handout Page 6

http://www.cms.gov/About-CMS/Agency-Information/History/index.html



http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/childrenshospitals/index.html

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/childrenshospitals/index.html

http://www.bls.gov/cpi/cpifaq.htm#Question_1

http://www.bls.gov/cpi/cpifaq.htm#Question_1

http://www.gpo.gov/fdsys/pkg/FR-2010-03-05/pdf/2010-4755.pdf

http://oig.hhs.gov/compliance/corporate-integrity-agreements/index.asp

http://oig.hhs.gov/compliance/corporate-integrity-agreements/index.asp

http://www.hrsa.gov/opa/criticalaccess.htm

http://www.hrsa.gov/opa/criticalaccess.htm

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/CritAccessHospfctsht.pdf

http://www.gpo.gov/fdsys/pkg/BILLS-109s1932enr/pdf/BILLS-109s1932enr.pdf

http://www.gpo.gov/fdsys/pkg/BILLS-109s1932enr/pdf/BILLS-109s1932enr.pdf

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/disproportionatesharehospitals/index.html

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/disproportionatesharehospitals/index.html

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Disproportionate_Share_Hospital.pdf

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/dsh.html



Term Definition

Disproportionate share hospital (DSH) inpatient pricing

The voluntary DSH inpatient contracts most GPOs offer their membership; the discount is usually ~2–3%. GPOs offer manufacturers this opportunity to put products on the DSH inpatient portfolio at a lower amount than what the manufacturer has given the GPO (i.e., in the GPO acute care file/and/or for products that the manufacturer chooses not to contract under the GPO acute care file).

Duplicate discount A duplicate discount, prohibited by 340B statute, occurs when manufacturers provide both a 340B discount on a drug AND pay a Medicaid rebate to the State on the same drug. A duplicate discount would occur if an up-front 340B discount is given and the state submits the same claim for a back-end Medicaid rebate. 340B covered entities are prohibited from causing a duplicate discount to occur.

Edit date The HRSA 340B Database uses the term “edit date” to denote the date that a 340B entity’s information was edited. Edits to the HRSA 340B Database can occur at any time.

Estimated acquisition cost (EAC)

The estimation of the price typically paid by entities for a particular manufacturer’s drug, using the most commonly purchased package size. Some Medicaid agencies are using EAC (plus a dispensing fee) as a basis for establishing reimbursement, especially for 340B entities. The exact method of calculating or projecting EAC may vary in different states.

Federal ceiling price (FCP)

The maximum price that a manufacturer may charge for a covered drug sold to the “big 4” federal entities engaged in providing health care services—Veterans Affairs, Department of Defense, Public Health Service (including Indian Health Service), and the Coast Guard . The federal ceiling price is effective for a calendar year, or the portion of a calendar year in which the covered drug is marketed.

Federal supply schedule (FSS)

The federal supply schedule involves large contracts through which federal customers can acquire more than 4 million products and services directly from more than 8,000 commercial suppliers. Products include pharmaceuticals and medical equipment and supplies. These contracts are available for use by all government agencies, including, but not limited to, VA medical centers, Department of Defense, Bureau of Prisons, Indian Health Service, Public Health Service, and some state veterans’ homes.

Free-standing cancer hospital (CAN)

A free-standing cancer hospital (CAN) is a nonprofit entity that is financially and administratively independent (not a part of a larger institution). CAN hospitals are exempt from Medicare’s prospective payment system. For 340B purposes, a CAN hospital must meet specific eligibility requirements, including a DSH adjustment percentage >11.75%, and compliance with the GPO Prohibition and Orphan Drug Prohibition.

Government Accountability Office (GAO)

The U.S. Government Accountability Office (GAO) is an independent nonpartisan agency that works for Congress. Often called the “congressional watchdog,” GAO investigates how the federal government spends taxpayer dollars.

GPO Prohibition The GPO Prohibition, per 340B statute, prohibits 340B participating disproportionate share hospitals (DSH), children’s hospitals (PED), and free-standing cancer hospitals (CAN) from obtaining covered outpatient drugs through group purchasing organizations. Upon enrollment, an entity official signs a form attesting that the hospital will comply with the GPO Prohibition. This applies to the hospital as of the date of listing on the HRSA 340B Database. Upon recertification of information on the HRSA 340B Database, the hospital official attests to compliance with the GPO Prohibition. A Policy Release about GPO was posted by HRSA in February 2013.

Group purchasing organization (GPO)

A group purchasing organization is an organization created to leverage the purchasing power of entities to obtain discounts from vendors based on the collective buying power of the GPO members. GPOs are common in the drug industry; the GPO may set mandatory purchasing participation levels from its members or be completely voluntary. Certain 340B participating hospitals (disproportionate share hospitals [DSH], children’s hospitals [PED], and free-standing cancer hospitals [CAN]) are prohibited from purchasing covered outpatient drugs from a GPO. The PVP portfolio is not considered a GPO.

Health Industry Number (HIN)

A unique, universal identification number to be used by all trading partners when they communicate with one another via computer. HINs are randomly assigned, nine-character, alpha-numeric identifiers that are issued by the Health Industry Business Communications Council (HIBCC). Drug wholesalers and manufacturers typically use HINs to identify entities.

Handout Page 7

http://www.hrsa.gov/opa/programrequirements/federalregisternotices/duplicatediscountsandrebates062393.pdf

http://www.fss.va.gov/faqs/publicLaw102585.asp#q006

http://www.fss.va.gov/faqs/publicLaw102585.asp#q006

http://www.va.gov/osdbu/dbwva/schedule.asp

http://www.va.gov/osdbu/dbwva/schedule.asp

http://www.hrsa.gov/opa/cancer.htm

http://www.hrsa.gov/opa/cancer.htm

http://www.gao.gov/about/index.html



http://www.hrsa.gov/opa/programrequirements/policyreleases/prohibitionongpoparticipation020713.pdf

http://www.hrsa.gov/opa/programrequirements/policyreleases/prohibitionongpoparticipation020713.pdf

http://www.hrsa.gov/opa/programrequirements/federalregisternotices/entityguidelines051394.pdf

http://www.hrsa.gov/opa/programrequirements/federalregisternotices/entityguidelines051394.pdf

http://www.hibcc.org/hinsystem.htm

http://www.hibcc.org/hinsystem.htm

340B University Page 6

Glossary of 340B Terms


Term Definition

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act, is a US law designed to provide privacy standards to protect patients' medical records and other health information provided to health plans, doctors, hospitals and other health care providers.

Health Resources and Services Administration (HRSA)

An agency of the U.S. Department of Health and Human Services, HRSA is the primary federal agency for improving access to health care services for people who are uninsured, isolated, or medically vulnerable. Comprising five bureaus and ten offices, HRSA provides leadership and financial support to health care providers in every state and U.S. territory. The Office of Pharmacy Affairs (OPA), the office responsible for administering the 340B program, falls under the Healthcare Systems Bureau within HRSA.

HRSA 340B Database The HRSA 340B Database is located here: http://opanet.hrsa.gov/opa/default.aspx. Entities, contract pharmacies and manufacturers submit information to HRSA’s OPA to include in the database. HRSA verifies this information and incorporates it into the database as appropriate.

In-house pharmacy A pharmacy that is owned by, and a legal part of, the 340B entity. Typically, in-house pharmacies are listed as shipping addresses of the entity and the entity owns the pharmacy license.

Innovator multiple source drug

All covered outpatient drugs approved under a new drug application (NDA), product license approval (PLA), establishment license approval (ELA), or antibiotic drug approval (ADA). A covered outpatient drug marketed by a cross-licensed producer or distributor under the approved NDA shall be included as an innovator multiple source drug when the drug product meets this definition.

Manufacturer A manufacturer (for 340B purposes) includes all entities engaged in: 1. The production, preparation, propagation, compounding, conversion, or processing of prescription

drug products, either directly or indirectly by extraction from substances of natural origin, orindependently by means of chemical synthesis, or by a combination of extraction and chemicalsynthesis; or

2. The packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. Amanufacturer must hold legal title to or possession of the NDC number for the covered outpatientdrug. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensedunder state law.

“Manufacturer” also includes an entity, described in (1) or (2) above, that sells outpatient drugs to covered entities, whether or not the manufacturer participates in the Medicaid rebate program. For more information, visit ftp://ftp.hrsa.gov/bphc/pdf/opa/pricingagreement.pdf

Medicaid best price (BP)

Regarding the Medicaid Rebate Program, Medicaid best price is the lowest manufacturer price paid for a prescription drug, regardless of package size, by any purchaser. BP is reported to CMS and states, but otherwise is confidential. Included in BP are cash discounts, free goods that are contingent upon purchase, volume discounts, and rebates. Excluded from BP are prices paid by the federal government (e.g., prices to the “big 4”, 340B covered entities, federal supply schedule, state pharmaceutical assistance programs, depot prices, and nominal pricing to covered entities).

Medicaid carve-in 340B entities may elect to use drugs purchased at 340B prices to bill for Medicaid patients. This activity is termed a “Medicaid carve-in.” If an entity chooses to use 340B drugs to bill Medicaid it must indicate this on the Medicaid Exclusion File and list the appropriate Medicaid provider numbers or NPIs. Entities must inform HRSA whether they are carving in or out.

Medicaid carve-out 340B entities may elect to use non-340B drugs to bill for Medicaid patients. This activity is termed a “Medicaid carve-out.” Entities may choose to do this so they can receive fair Medicaid reimbursement (many states reimburse entities that use 340B for Medicaid patients on a cost + dispensing fee basis, as the dispensing fee is often not high enough to cover costs). Entities must inform HRSA whether they are carving in or out through the Medicaid Exclusion File.

Handout Page 8

http://www.hrsa.gov/about/



http://opanet.hrsa.gov/opa/default.aspx



ftp://ftp.hrsa.gov/bphc/pdf/opa/pricingagreement.pdf



Term Definition

Medicaid Exclusion File HRSA established the Medicaid Exclusion File to help support program integrity regarding the statutory prohibition of duplicate discounts. The Medicaid Exclusion File is maintained on the HRSA 340B website and contains the National Provider Identification (NPI) number or Medicaid Provider Number of entities that use 340B discounted drugs to bill Medicaid for their patients. Entities are expected to provide updated information to HRSA for incorporation into the Medicaid Exclusion File. The covered entity should be billing according to their designation on the Exclusion File. The covered entity should immediately inform HRSA of any changes. The Medicaid Exclusion File is used as follows:

All entities must inform HRSA whether they will use 340B drugs to bill for Medicaid patients.

Entities using 340B purchased drugs for Medicaid patients must inform HRSA of their NPI/Medicaid Provider Number(s).

Medicaid Agencies use the Medicaid Exclusion File to identify the NPI or Medicaid Provider Number of the entities purchasing at 340B prices.

The state Medicaid agency excludes from its rebate requests to manufacturers all claims associated with entities whose NPIs/Medicaid Provider Numbers are listed in the Medicaid Exclusion File.

Manufacturers use the Medicaid Exclusion File to verify denial of rebate payment on claims associated with entities purchasing at 340B prices.

Medicaid rebate net price

The price for covered outpatient drugs paid by state Medicaid programs, including the manufacturer rebates received by the states.

Medicare and Medicaid Extenders Act, 2010

This federal legislation clarified that children’s hospitals should continue to receive 340B prices on orphan drugs.

Medicare DSH adjustment percentage

An adjustment applied to hospitals that treat a high percentage of low-income patients. This adjustment results in an additional payment to these hospitals. Factors included in this adjustment are the sum of the ratios of Medicare Part A Supplemental Security Income (SSI) patient days to total Medicare patient days and Medicaid patient days to total patient days in the hospital. 340B covered entity hospitals must meet a certain threshold for disproportionate share adjustment percentage: >11.75% for DSH, PED, and CAN, and ≥8% for RRC and SCH.

Medicare Modernization Act, 2003 (MMA)

This federal legislation made it easier for rural hospitals to meet one requirement for 340B eligibility (reaching the 11.75% DSH adjustment threshold).

Mixed-use setting A hospital area that serves a mixed patient type of both inpatients and outpatients. Often these are facilities such as surgery centers, cardiac catheter labs, infusion centers, and emergency departments.

National Drug Code (NDC)

Drug products are identified and reported using a unique, three-segment number, called the National Drug Code (NDC), which serves as a universal product identifier for human drugs. FDA publishes the listed NDC numbers and the information submitted as part of the listing information in the NDC Directory, which is currently updated semimonthly. It is an 11-digit number; the first segment (5 digits) of the NDC indicates the manufacturer, the second segment (4 digits) indicates the drug product, and the third segment (2 digits) indicates the package size.

National Provider Identifier (NPI)

The National Provider Identifier (NPI) is a unique identification number for covered health care providers. Covered health care providers and all health plans and health care clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA. The NPI is a 10-position, intelligence-free numeric identifier (10-digit number).

Handout Page 9

http://www.hrsa.gov/opa/programrequirements/medicaidexclusion/index.html

http://www.gpo.gov/fdsys/pkg/BILLS-111hr4994enr/pdf/BILLS-111hr4994enr.pdf

http://www.gpo.gov/fdsys/pkg/BILLS-111hr4994enr/pdf/BILLS-111hr4994enr.pdf



http://www.gpo.gov/fdsys/pkg/PLAW-108publ173/content-detail.html

http://www.gpo.gov/fdsys/pkg/PLAW-108publ173/content-detail.html

http://www.fda.gov/Drugs/InformationOnDrugs/ucm142438.htm

http://www.fda.gov/Drugs/InformationOnDrugs/ucm142438.htm

http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/NationalProvIdentStand/index.html?redirect=/NationalProvIdentStand/

http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/NationalProvIdentStand/index.html?redirect=/NationalProvIdentStand/

https://npiregistry.cms.hhs.gov/NPPESRegistry/NPIRegistryHome.do



Term Definition

Nominal price A nominal price is any price less than 10% of the AMP in the same quarter for which the AMP is calculated. Only nominal price sales to 340B entities and other safety net providers, as specified by CMS, are excluded from the calculation of:

Average sales price (ASP) Best price (BP)


Non-federal average manufacturer price (non-FAMP)

Non-federal average manufacturer price is the average price paid to a manufacturer by wholesalers for drugs distributed to non-federal purchasers. Non-FAMP is not publicly available. 340B and Prime Vendor sub-ceiling prices are excluded from a manufacturer’s non-FAMP calculations.

Non-innovator multiple source drug

A non-innovator multiple source drug is a drug that is not originally marketed under an original new drug application, and whose therapeutic equivalent is available from multiple sources

Office of Pharmacy Affairs (OPA)

The Office of Pharmacy Affairs (OPA) is the HRSA office responsible for administering the 340B program.

Office of Inspector General (OIG), Department of Health and Human Services

The Office of Inspector General is an independent and objective oversight unit of the Department of Health and Human Services (HHS) to carry out the mission of promoting economy, efficiency, and effectiveness through the elimination of waste, abuse, and fraud. The OIG:

Conducts and supervises audits, investigations, and inspections. Identifies systemic weaknesses giving rise to opportunities for fraud and abuse in HHS programs

and operations and makes recommendations to prevent their recurrence.

Leads and coordinates activities to prevent and detect fraud and abuse in HHS programs and operations.

Detects wrongdoers and abusers of HHS programs and beneficiaries so appropriate remedies may be brought to bear.

Keeps the HHS Secretary and Congress fully and currently informed about problems and deficiencies in the administration of HHS programs.

The OIG has issued several reports relating to 340B.

Office of Regional Operations (ORO), Health Resources and Services Administration

The Office of Regional Operations (ORO) works through HRSA’s 10 regional offices to improve health care systems and America’s health care safety net, increase access to quality care, reduce disparities, and advance public health. The ORO conducts 340B audits, with oversight by HRSA.

Orphan Drug Act (ODA) The Orphan Drug Act (ODA) provides for granting special status to a product to treat a rare disease or condition upon request of a sponsor. The combination of the rare disease or condition and the product to treat it must meet certain criteria. This status is referred to as orphan designation. Orphan designation qualifies the sponsor of the product for the tax credit and marketing incentives of the ODA. The Affordable Care Act restricted newly eligible 340B entities (critical access hospitals [CAH], rural referral centers [RRC], sole community hospitals [SCH], and free-standing cancer hospitals [CAN]) from purchasing orphan designated drugs at 340B prices. In July 2014, HRSA issued an interpretive rule, pertaining to the statutory requirement for inclusion of drugs with orphan drug designations in the 340B drug pricing program.

Orphan drug “approved”

An orphan-designated product is considered “approved” by the U.S. Food and Drug Administration (FDA) Office of Orphan Products Development (OOPD) if it has received marketing approval for an indication that falls within the designated disease or condition.

Handout Page 10



http://www.hrsa.gov/opa/index.html

http://www.hrsa.gov/opa/index.html

http://oig.hhs.gov/organization/oigorgstatement070204.pdf




http://www.hrsa.gov/opa/programrequirements/reports/index.html

http://www.hrsa.gov/about/organization/bureaus/oro/

http://www.hrsa.gov/about/organization/bureaus/oro/

http://www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/HowtoapplyforOrphanProductDesignation/default.htm

http://www.hrsa.gov/opa/programrequirements/interpretiverule/index.html



Term Definition

Orphan drug “designation”

The Orphan Drug Act (ODA) provides for granting special status to a drug or biological product (“drug”) to treat a rare disease or condition upon request of a sponsor. This status is referred to as orphan designation (or sometimes “orphan status”). For a drug to qualify for orphan designation, both the drug and the disease or condition must meet certain criteria specified in the ODA and FDA’s implementing regulations at 21 CFR Part 316.

Orphan drug exclusion As part of the Affordable Care Act, designated orphan drugs were excluded from the definition of covered outpatient drug for Critical Access Hospitals (CAH), Rural Referral Centers (RRC), Sole Community Hospitals (SCH) and Free Standing Cancer Hospitals (CAN); these entities can’t purchase designated orphan drugs at 340B prices. An Interpretive Rule issued in July 2014, clarifies how this section (340Be) will be implemented in these entity types only.

Orphan drug “opt in” 340B hospitals subject to the Orphan Drug Exclusion may choose to purchase orphan drugs used for a non-orphan indication under the 340B program, or “opt in.” If they make this choice, they are required to maintain audible records to demonstrate compliance with the Orphan Drug Exclusion.

Orphan drug “opt out” 340B hospitals subject to the Orphan Drug Exclusion that cannot or do not wish to maintain auditable records regarding compliance with the Orphan Drug Exclusion may “opt out.” If they make this choice, they will purchase all orphan drugs outside of the 340B program, regardless of the indication for which the drug is used.

Orphan drug “sponsor” The party that owns or has assigned rights to an orphan drug designation granted by the FDA. Sponsors listed on the FDA orphan drug list may not be the current manufacturer for an orphan drug if ownership or rights have been subsequently transferred.

Orphan drug “withdrawn”

An orphan-designated drug with marketing approval may have its marketing approval withdrawn for the designated use.

Outpatient clinic To purchase/use 340B drugs, a hospital outpatient clinic must:

Be an integral part of a 340B eligible hospital. Appear as a reimbursable clinic above line 96 on Worksheet A of the hospital’s most recently

filed Medicare cost report.*

Have patients that meet the criteria in the 340B patient definition guideline.

Submit to HRSA the most recently filed cost report to verify clinic eligibility. Be listed on the HRSA 340B Database as eligible to participate.

*Special requirements may apply to certain children’s hospitals (PED).

Patient assistance programs (PAPs)

Programs whereby drug manufacturers provide free or greatly subsidized medications to patients in need of assistance.

Patient Protection and Affordable Care Act (PPACA), 2010

Federal legislation that affected the 340B program in the following ways:

Expanded eligibility to include certain critical access hospitals (CAH), sole community hospitals (SCH), rural referral centers (RRC), and free-standing cancer centers (CAN).

Required HRSA to publish ceiling pricing and actual pricing data submitted by drug manufacturers.

Increased the Medicaid rebate percentage (from 15.1% to 23.1% for brand-name drugs; to 17.1% for clotting factors and pediatric drugs; and from 11% to 13% for generics).

Created integrity provisions for manufacturers, including the ability to impose fines on manufacturers for violations of 340B, increased price transparency, and new processes for dispute resolution and recovery of overcharges.

Created integrity provisions for entities, including civil penalties for providers knowingly violating the prohibition against diversion of 340B drugs.

Directed the Government Accountability Office (GAO) to prepare a 340B-related report to Congress.

Handout Page 11

ftp://ftp.hrsa.gov/bphc/pdf/opa/FR09191994.htm

http://www.healthcare.gov/law/full/index.html



http://www.gao.gov/products/GAO-11-836



Term Definition

Penny price A term used to describe the price that results when the calculation for a 340B price yields zero. The manufacturers have been instructed to charge a “penny” for the smallest unit of measure of the product (often per tablet or per package). HRSA has published a policy release clarifying its penny pricing policy.

Pharmaceutical pricing agreement (PPA)

This agreement is required for manufacturers who have executed a Medicaid rebate agreement with CMS and voluntary for those who do not have a current Medicaid rebate agreement. The pharmaceutical pricing agreement must be signed by a corporate officer of the company (e.g., president, chief executive officer, or general counsel; signatures by vice presidents or directors of sales or marketing will not be accepted). A PPA remains in effect until terminated by either the manufacturer or the Secretary of HHS. It is not automatically terminated if a manufacturer terminates its Medicaid rebate agreement.

Pharmacy benefit manager (PBM)

An administrator of prescription drug programs. PBMs are responsible for processing and paying prescription drug claims, and often for developing and maintaining a formulary of drugs. PBMs also may contract with pharmacies and negotiate discounts and rebates with drug manufacturers. 340B entities often use a PBM in multiple contract pharmacies, but the use of a PBM is not required.

Physician-administered drugs

Drugs administered directly by a physician or a physician designee to a patient. This may occur in 340B entities such as federal qualified health centers (FQHCs), or it may occur in an outpatient clinic setting of a hospital.

Private label product Private label products are typically those manufactured or provided by one company for offer to customers/members under another company’s (GPO) brand. These products are typically the same (chemically) as the manufacturer’s labeled product, but just labeled under the offered company’s own branding.

Provider-based regulations or status

Medicare sets standards that “provider-based” departments or clinics must meet to enable the entity to bill Medicare a facility fee under the outpatient prospective payment system. Hospitals seek provider-based status for financial reasons.

Recertification HRSA is required by statute to conduct annual recertification of participating 340B covered entities’ information listed in the HRSA 340B Database. As part of this process, an authorizing official from each 340B entity certifies basic information about the entity and its 340B compliance. Covered entities with inaccurate information in the HRSA 340B Database run a high risk of being removed from the program.

Reclassification Reclassification (sometimes also called recharacterization) occurs when a credit–rebill process is used to reclassify information about a transaction after it initially occurred. Examples of reclassified information might include the purchasing contract used or the time of dispensing. HRSA has not authorized the use of a credit–rebill, banking, or similar process to recharacterize previous transactions. Covered entities participating in the 340B program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, covered entities should first notify manufacturers and ensure that all processes are fully transparent, with a clear audit trail that reflects the actual timing and facts underlying a transaction. The covered entity retains responsibility for ensuring full compliance and integrity of its use of the 340B program.

Replenishment (340B outpatient drug)

340B outpatient drug replenishment occurs when a non-340B drug is initially dispensed to a 340B eligible patient, and an entity later replaces the non-340B dispensed drug with 340B purchased inventory. The replaced inventory, although it was purchased at 340B prices, is no longer considered 340B inventory, as the title passes to the pharmacy after purchase.

Rural referral center (RRC)

A Medicare participating acute care hospital is classified as an RRC if it is located in a rural area and it meets specific criteria.

Shipping address The HRSA 340B Database uses the “shipping address” field to denote a location that may have 340B drugs shipped to it. This address must be a physical address (no P.O. boxes). A shipping address may include in-house pharmacies, entity-owned warehouses, central fill facilities, repackagers, and the like.

Handout Page 12

http://www.hrsa.gov/opa/programrequirements/policyreleases/pennypricingclarification112111.pdf

http://www.hrsa.gov/opa/programrequirements/policyreleases/pennypricingclarification112111.pdf



http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R57SOMA.pdf

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R57SOMA.pdf

http://www.hrsa.gov/opa/programrequirements/recertification/index.html

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/ruralreferralcenters/index.html

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/ruralreferralcenters/index.html

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/Rural_Referral_Center_Fact_Sheet.pdf



Term Definition

Single source drug A covered outpatient drug that is produced or distributed under an original new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application (NDA). It also includes a covered outpatient drug approved under a product license approval (PLA), establishment license approval (ELA), or antibiotic drug approval (ADA).

Social Security Act, 1935 (SSA)

This federal legislation defines many key terms that apply to the 340B program, including covered outpatient drug and covered entity types (e.g., FQHC and different hospitals such as DSH, CAH, SCH)

Sole community hospital (SCH)

A hospital paid under the Medicare Acute Care Hospital Inpatient Prospective Payment System (IPPS) is eligible to be classified as an SCH if it meets specific criteria determined by CMS. Typically, these hospitals furnish short-term, acute care; are paid under the Medicare Acute Care Hospital IPPS; are not critical access hospitals (CAH); and are not paid under any other Medicare prospective payment system.

Split-billing software Split-billing software is used in settings where a 340B entity uses multiple wholesaler contracts for drug purchasing. This software helps the entity track and separate (“split”) the 340B-eligible dispensations from the non-340B dispensations, and ultimately builds purchase orders based on varied information.

Start date The HRSA 340B Database uses the term “start date” to denote an entity’s start date in the 340B program. Entity start dates are updated quarterly.

Telepharmacy Telepharmacy involves the use of electronic information and communication technology to provide and support the delivery of pharmacy services (including drug product and professional pharmacist services) to locations that are remote from a physical pharmacy.

Termination date The HRSA 340B Database uses the term “termination date” to denote the date that the 340B entity is terminated from the 340B program. As of this date, the entity may no longer purchase 340B or use drugs. Termination dates are updated on a quarterly basis.

Unit rebate amount (URA)

CMS computes this amount and state Medicaid programs apply utilization information to it in order to invoice drug manufacturers for rebates.

Vendor 340B entities may elect to purchase services, designed to simplify or optimize 340B participation, from a variety of organizations collectively called 340B vendors.

Wholesale acquisition cost (WAC)

The price paid by a wholesaler (or direct purchaser) in the United States for drugs purchased from the drug’s manufacturer or supplier. Publicly available WAC lists do not represent actual transaction prices and do not include prompt pay or other discounts, rebates, or reductions in price.

Wholesaler A drug wholesaler is an organization that provides drugs to entities, serving as the distributor between the drug manufacturer and the entity. Typically, states define the term “wholesaler,” so exact definitions may vary from state to state.

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not

been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance

and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of their program integrity efforts.

© 2015 Apexus. Permission is granted to use, copy and distribute this work solely for 340B covered entities and Medicaid Agencies.

Handout Page 13


http://www.ssa.gov/OP_Home/ssact/ssact-toc.htm

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/solecommunityhospitals/index.html

http://www.hrsa.gov/opa/eligibilityandregistration/hospitals/solecommunityhospitals/index.html

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/SoleCommHospfctsht508-09.pdf

http://downloads.cms.gov/cmsgov/archived-downloads/SMDL/downloads/SMD10019.pdf

http://downloads.cms.gov/cmsgov/archived-downloads/SMDL/downloads/SMD10019.pdf

Handout Page 14

340B University Page 1 340B Acronym Guide

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015

Purpose: The purpose of the 340B Acronym Guide is to define common acronyms used in the 340B program.

Acronym Definition

AAC Actual acquisition cost

ACA Affordable Care Act (abbreviation of PPACA)

ACO Accountable care organization

AGP Apexus Generics Portfolio

AHF AIDS Healthcare Foundation

AMCP Academy of Managed Care Pharmacy

AMP Average manufacturer price

APhA American Pharmacists Association

ASHP American Society of Health-System Pharmacists

ASP Average sales price

Avg AC Average acquisition cost

AWP Average wholesale price

BIN Bank identification number

BL Black Lung Clinics Program

BP Best price

BPHC Bureau of Primary Health Care

CAH Critical access hospital

CAN Free-standing cancer hospital

CAP Corrective action plan

CBO Congressional Budget Office

CE Covered entity

CH Consolidated Health Center Program (now combines 340B eligible entity types: federally qualified health centers (FQHCs), FQHC look-alikes, school-based programs, Health Care for the Homeless Program, Migrant Health Program, and Public Housing Primary Care Program entities)

CIA Corporate integrity agreement

CMS Centers for Medicare & Medicaid Services

COD Covered outpatient drug

CPI-U Consumer Price Index-Urban

DoD Department of Defense

DRA Deficit Reduction Act of 2005

Handout Page 15



Acronym Definition

DSH Disproportionate share hospital

DSH Rate Disproportionate share adjustment rate

EAC Estimated acquisition cost

EHB Electronic Handbook (HRSA)

FAR Federal Acquisition Regulations

FAR Final audit report

FASHP Federation of Associations of Schools of the Health Professions

FCP Federal ceiling price

FDA Food and Drug Administration

FP Family planning clinic (includes only Title X funded clinics)

FPL Federal poverty level

FQHC/ FQHCLA Federally qualified health center/federally qualified health center look-alike

FSS Federal Supply Schedule

FUL Federal upper limit

GAO Government Accountability Office

GPO Group purchasing organization

HCPCS Healthcare Common Procedure Coding System

HHS Department of Health and Human Services

HIBCC Health Industry Business Communications Council

HIN Health Identification Number

HIPAA Health Insurance Portability and Accountability Act of 1996

HM Comprehensive hemophilia treatment center

HMO Health maintenance organization

HRSA Health Resources and Services Administration

HTC Hemophilia treatment center

HV Ryan White Part C (formerly Title III)

IHS Indian Health Service

IPAP Institutional Patient Assistance Program

IPPS Inpatient Prospective Payment System

ISMP Institute for Safe Medication Practices

Handout Page 16



Acronym Definition

MA Medicare Advantage

MAC Maximum allowable cost

MCO Managed care organization

MMA Medicare Modernization Act

MMCO Medicaid managed care organization

MTM Medication therapy management

MUA Medically underserved area

MUP Medically underserved population

NABP National Association of Boards of Pharmacy

NACHC National Association of Community Health Centers

NCPDP National Council for Prescription Drug Programs

NDC National Drug Code

NFPRHA National Family Planning and Reproductive Health Association

Non-FAMP Non-federal average manufacturer price

NPI National Provider Identifier

NPRM Notice of proposed rulemaking

ODA Orphan Drug Act

OIG Office of Inspector General

OOPD Office of Orphan Products Development

OPA Office of Pharmacy Affairs

PAP Patient assistance program

PAR Preliminary audit report

PBM Pharmacy benefit manager

PCA Primary care association

PCN Processor code number

PDL Preferred drug list

PDP Prescription drug plan

PED Children’s hospital

PHCP Public Hospital Pharmacy Coalition

PHS U.S. Public Health Service

PHSA Public Health Service Act

Handout Page 17



Acronym Definition

PPA Pharmaceutical pricing agreement

PPACA Patient Protection and Affordable Care Act (Affordable Care Act)

PPO Preferred provider organization

PPS Prospective payment system

PSPC Patient Safety and Clinical Pharmacy Services Collaborative

PVP Prime Vendor Program

RRC Rural referral center

RWI Ryan White Part A (formerly Title I)

RWII Ryan White Part B (formerly Title II)

RWIID Ryan White Part B (formerly Title II) ADAP Direct Purchase

RWIIR Ryan White Part B (formerly Title II) ADAP Rebate Option

RW4 Ryan White Part D (formerly Title IV)

SCH Sole community hospital

SNHPA Safety Net Hospitals for Pharmaceutical Access

SPAP State pharmaceutical assistance program

SPNS Ryan White Part F (formerly Special Projects of National Significance)

SSA Social Security Act

STD Sexually transmitted disease clinic

TB Tuberculosis clinic (OPA acronym)

TrOOP True out-of-pocket cost/spending

URA Unit rebate amount

VA Department of Veterans Affairs

WAC Wholesale acquisition cost This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of their program integrity efforts. © 2015 Apexus. Permission is granted to use, copy and distribute this work solely for 340B covered entities and Medicaid Agencies.

Handout Page 18

340B University Tools Page 1 Mapping the 340B Drug Operations Environment Tool


Purpose: The purpose of this tool is to identify the locations in which 340B drugs are provided within a 340B covered entity and where and how 340B drugs are purchased. This is the covered entity’s 340B Drug Operations Environment. Mapping of the 340B Drug Operations Environment ensures that the entity includes all areas in its 340B Program integrity initiatives. The maintenance of auditable records, including documented 340B Program compliant policies and procedures, is a 340B Program requirement. All 340B Drug Operations Environments should be reflected in policies and procedures and self-audit systems, and a covered entity’s practice must align with its policies and procedures. Systems or mechanisms must be in place to ensure ongoing compliance with all 340B Program requirements, including accuracy of 340B Database records and prevention of diversion and duplicate discounts (both at the covered entity and a contract pharmacy). This tool was created in collaboration with the HRSA Peer-to-Peer Program. Tool Definitions: 340B drug:

• Describes a drug that is purchased using a 340B purchasing account. Non-340B drug:

• Describes a drug purchased using a non-340B purchasing account such as a wholesaler acquisition cost (WAC) account or a group purchasing organization (GPO) account.

Provide drug: • Describes when a drug purchased by the covered entity is dispensed for take-home use or

administered/dispensed as part of a medical encounter. Use this mapping tool to:

• Document all locations that provide 340B drugs. • Document the inventory type, method, and system(s) used to track the purchase, dispensation, and

administration of drugs at each location, including outpatient location, mixed-use pharmacy, entity-owned outpatient pharmacy, and contract pharmacy.

• Document Medicaid billing and NPI numbers used to bill 340B drugs and non-340B drugs that must align with the location’s listing in the Medicaid Exclusion File.

This tool includes opportunities to document any non-340B drug operations environment(s) connected to or interfacing with a 340B Drug Operations Environment, as these drug operations environments can affect 340B drug systems and program integrity initiatives.

Instructions: Complete tables in sequence listed below:

Step 1: Complete Table 1 Overall Drug Operations Environment

Step 2: Complete Table 2 340B ID Site-Specific Drug Operations Environment A unique entry should be completed for each

340B ID site listed in Table 1.

Step 3: Complete Table 3 Entity-Owned Pharmacy Drug Operations Environment A unique entry should be completed for each entity-owned pharmacy listed in Table 1.

Step 4: Complete Table 4: Contract Pharmacy Drug Operations Environment A unique entry should be completed for each

contract pharmacy service location.

Handout Page 19


Table 1

Overall Drug Operations Environment

1. Document the Parent 340B ID.

2. Document the 340B ID of each outpatient facility (child site) registered on the 340B Database.

3. Document the 340B ID(s) of each associated site providing 340B drugs (if applicable).

Note: An associated site has a different 340B ID type, but is associated by management control. For example, a hospital organization may have a DSH 340B ID at one location and a CAH 340B ID at a different location. A grantee organization may have both a CHC 340B ID and an HV 340B ID at the same location.

4. Document the name and address of any location that provides 340B drugs and is not registered in the 340B Database. (Do not include any pharmacies or locations that are not part of the entity.)

Note: Every eligible location must first be registered in the 340B Database before providing 340B drugs. Ineligible sites may not provide 340B drugs.

5. Document the name of each ENTITY-OWNED pharmacy.

Note: Pharmacies are not covered entities and are not eligible to be registered on the 340B Database separately.

6. Document the name of each CONTRACT pharmacy organization (not locations) that provides drugs to patients of the parent, outpatient facility(s) (child site(s)), and associated site(s). A contract pharmacy organization may be a chain or independent pharmacy and have multiple service site addresses.

340B ID Specific Drug Operations Environment completed by: (name) and (title) (date)

Handout Page 20

https://www.340bpvp.com/content/contentSearch.html?category=content&Ntt=1295&main-submit=

https://www.340bpvp.com/content/contentSearch.html?category=content&Ntt=1295&main-submit=


Table 2

Overall Drug Operations Environment From Table 1, list the 340B ID of each location registered on the HRSA 340B Database and document the following:

340B ID# 1: 340B ID # 2: 340B ID # 3:

1. Document the location name. Name Name Name 2. Document the physical address,

including suite number. Address Address Address

3. Do providers generate prescriptions for patient take-home medication use that are subsequently filled with 340B drugs?

Yes or No Yes or No Yes or No

4. Does this 340B ID site administer/dispense drugs as part of outpatient encounters?


4.a. Document type(s) of drug inventory administered/dispensed.

Note: A covered entity subject to the GPO Prohibition is prohibited from providing GPO drugs to outpatients.

340B WAC GPO

340B WAC GPO

340B WAC GPO

4.b. Document wholesaler/ manufacturer name and account number used for each inventory type administered/dispensed.

340B Account# with__ WAC Account# with__ GPO Account# with __



4.c. Document inventory method used

for administered/dispensed drugs. Physical Virtual

Both Physical & Virtual

Physical Virtual


Physical Virtual

Both Physical & Virtual 4.d. Document automated dispensing

devices used. Device Name Device Name Device Name

4.e. Document the inventory tracking system used for administered/ dispensed drugs. Specify software name, if applicable.

Vendor software Paper tracking log

Electronic tracking log





5. Does this 340B ID carve in Medicaid and bill 340B drugs to Medicaid?


5a. Document all Medicaid and/or NPI numbers used to bill 340B drugs to Medicaid. Note: Billing numbers used to carve in Medicaid must be listed in the Medicaid Exclusion File.

Billing numbers used Billing numbers used Billing numbers used

6. Document all Medicaid and/or NPI numbers used to bill non-340B drugs to Medicaid.

Billing numbers used Billing numbers used Billing numbers used


Handout Page 21


Table 3

Entity-Owned Pharmacy Drug Operations Environment From Table 1, list the name of each entity-owned pharmacy in the column heading and document the following: Name #1 Name #2

1. Document the physical address, including suite number if applicable. Address Address

2. Is a “closed door” pharmacy providing drugs only to patients of the covered entity? Yes or No Yes or No

3. Is an “open door” pharmacy providing drugs to covered entity patients and the general public? Yes or No Yes or No

4. Under what 340B ID(s) is the pharmacy purchasing 340B drugs? 340B ID 340B ID

5. In addition to dispensing prescriptions for take-home use, does the pharmacy provide drugs to departments for administration/dispensation as part of medical encounters?

Yes or No Yes or No

5.a. Document the type of department(s) for which drugs are provided.

Inpatient and/or Outpatient

Inpatient and/or Outpatient

6. Provides 340B drugs to patients with an entity health record including a referral arrangement that demonstrates the entity’s responsibility for care?

Yes or No Yes or No

7. Document type(s) of drug inventory provided to patients.

Note: A covered entity subject to the GPO Prohibition is prohibited from providing GPO drugs to outpatients.

340B WAC GPO

340B WAC GPO

8. Document the wholesaler/manufacturer name and account number used for each inventory type provided.

340B Account# with___ WAC Account# with___ GPO Account# with ___


9. Document the inventory method used by the pharmacy. Physical Virtual


Physical Virtual

Both Physical & Virtual 10. Document the inventory tracking system used by the

pharmacy. Specify software name, if applicable. Vendor software

Paper tracking log Electronic tracking log


Electronic tracking log 11. Does the entity-owned pharmacy serve as a contract

pharmacy to other covered entities? Yes or No Yes or No

12. Does the entity-owned pharmacy carve in Medicaid and bill 340B drugs to Medicaid? Yes or No Yes or No

13. Document the pharmacy Medicaid and/or NPI numbers used to bill 340B drugs to Medicaid. Note: Billing numbers used to carve in Medicaid at the

pharmacy must be listed in the Medicaid Exclusion File.

Billing numbers used Billing numbers used

14. Document the pharmacy Medicaid and/or NPI numbers used to bill non-340B drugs to Medicaid. Billing numbers used Billing numbers used


Handout Page 22


Table 4

Contract Pharmacy Drug Operations Environment List the name of the contract pharmacy service location in the column headings and document the following: Name #1 Name #2

1. Document the physical address. Address Address 2. Do the name and address of the contract pharmacy

location appear on an executed contract?

Note: Each contract pharmacy service location must be listed on an executed contract pharmacy agreement and be registered on the 340B Database before providing 340B drugs.

Yes or No Yes or No

3. Is this location listed on the 340B Database under the parent 340B ID, such that the patients of any site (parent or child site) receive 340B drugs?

Yes or No Yes or No

4. Provides 340B drugs to patients with an entity health record including a referral arrangement that demonstrates the entity’s responsibility for care?

Yes or No Yes or No

5. Document type(s) of drug inventory provided to patients.

Note: A covered entity subject to the GPO Prohibition is prohibited from providing GPO drugs at a contract pharmacy.

340B WAC GPO

340B WAC GPO

6. Document covered entity’s wholesaler/manufacturer name and account number used for each inventory type provided.

340B Account# with__ GPO Account# with __

340B Account# with__ GPO Account# with__

6a. Is each account # listed above set up as “ship to” the contract pharmacy and “bill to” the covered entity? Yes or No Yes or No

7. Document the inventory method used at contract pharmacy for 340B drugs.

Physical Virtual


Physical Virtual

Both Physical & Virtual 8. Document the inventory tracking system used for

providing 340B drugs at contract pharmacy. Specify software name, if applicable.

Vendor Software Paper Tracking Log

Electronic Tracking Log

Vendor Software Paper Tracking Log

Electronic Tracking Log 9. Document any third-party administrator (TPA) used for

340B Program administration. TPA Name TPA Name

10. Has HRSA posted the carve-in contract pharmacy arrangement on the 340B Database if the location is billing 340B drugs to Medicaid?

Note: Contract pharmacies must carve out unless HRSA has approved the mechanism to prevent duplicate discounts.

Yes or No Yes or No


Handout Page 23

Handout Page 24

340B Compliance Self-Assessment: Vendors Page 1 A Tool to Help 340B Entity Leaders Assess Contract Pharmacy Vendors

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.340bpvp.com © 2015 Apexus LLC. All rights reserved. Version 05062015

Purpose: The purpose of this tool is to enable entity leaders to quickly assess the basic level of 340B program integrity resources provided by contract pharmacy vendors to help the entity achieve 340B compliance.

Instructions: Read the question under the column “Does the Entity…?” 1. Review the information in the chart. Consider including green light criteria as part of a vendor request

for proposal (RFP).

2. After receiving vendor proposals, read the question under the column “Does the vendor offer...”

3. Select the answer that best reflects the vendor’s services.

4. Make notes for further question, investigation, or program changes.

5. Use the general key below to help understand each vendor’s estimated level of program compliance support for the answer selected.

Notes: Criteria for assessing vendors is categorized into two groups for purposes of this tool:

Law/Policy: These descriptions are guided by HRSA 340B published statue and regulation guidelines. Local, state, and other federals laws/regulations were not incorporated into this brief assessment.

Financial/Contractual: These factors are guided by the entity’s corporate structure, practices, or state laws. In developing this tool, generally accepted business practices were used, as it would be impossible to include the universe of all possible state and organizational legal considerations.

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of its program integrity efforts.

© 2015 Apexus. Permission is granted to use, copy, and distribute this work solely for 340B covered entities and Medicaid Agencies.

Low program integrity, program change recommended

Moderate program integrity, additional investigation recommended

High program integrity

Handout Page 25


Does the Vendor offer… Answer, to estimate your level of 340B Integrity Notes

Law/Policy

A system that supports identification of eligible patients and adherence to the 340B patient definition? • The entity has a relationship with the individual and maintains records

of the individual’s health care. • The individual receives health care services from a health care

professional: o Employed by the entity or o Under contractual or other arrangements (e.g., referral for

consultation) with entity. • The individual received a health care service (or range of services)

from the entity that is consistent with the grant scope of services (or federal designation/status; this does not apply to hospitals).

• The entity maintains responsibility for the individual’s health care services.

• If using a contract pharmacy that dispenses inventory of another 340B entity’s products (unique 340B ID), a system is in place to prevent misallocated transactions between entities.

Criteria are not met.

Uncertain; needs investigation.

Criteria are met.

A system that supports the entity’s aim for no duplicate discounts? • The vendor has a process such as excluding Medicaid managed care

claims from 340B replenishment if Medicaid rebates will be collected, and/or

• Medicaid fee-for-service prescriptions are not included in the 340B program unless a special arrangement has been made among the entity, HRSA, and the state Medicaid program to prevent duplicate discounts.



Criteria are met.

Adequate inventory management and records/reporting? • The drug ordering process is transparent to the entity and the entity is

ultimately in control of the process (which parties may order and by what mechanisms).

• The vendor does not recommend or engage in re-characterization of claims or banked replenishment without full disclosure to all parties (entity, manufacturer, wholesaler, etc.).

• Inventory tracking is perpetual and the entity has access to inventory reports at any time or as requested.

• If the entity is subject to the GPO Prohibition (DSH, PED, CAN), its inventory system does not allow the entity to obtain covered outpatient drugs from a GPO.

• If the entity is subject to the Orphan Drug Exclusion (CAH, SCH, RRC, CAN), the inventory system is capable of handling orphan drug segregation (either supporting no orphan drugs purchased at 340B prices [“opt-out”] or identifying orphan drugs based upon designation [“opt-in”]).

• The entity establishes/controls reorder trigger points.



Criteria are met.


Handout Page 26

http://www.hrsa.gov/opa/programrequirements/federalregisternotices/patientandentityeligibility102496.pdf

http://www.hrsa.gov/opa/programrequirements/federalregisternotices/duplicatediscountsandrebates062393.pdf



Law/Policy (continued)

• The vendor’s reporting capabilities include patient name, patient DOB, provider NPI, drug name, 11-digit NDC, quantity, date, third party/cash revenue, dispensing fees paid to pharmacy, and fee paid to vendor.

• All pharmacy- and patient-related data and records remain the sole property of the entity; if the entity allows use of the data by the vendor, the vendor must agree that all data will be de-identified, reported in the aggregate only, and comply with HIPAA requirements.

• Data privacy is addressed to the entity’s satisfaction. • A process is in place to reimburse the pharmacy for drugs that cannot

be replenished at an 11-digit NDC match, at reasonable rates and reasonable intervals.

• A process is in place to reconcile inventory following the termination of the contract pharmacy or vendor contract.

• A process is in place to regularly reconcile purchasing, distribution, dispensing, and billing records (time interval clearly stated).

• Records are maintained for at least three years, or longer if required by state/federal law, including after the termination of the contract.

• Contract pharmacy provides data to the entity regarding how many prescriptions for entity patients are presented to the pharmacy, and how many are filled for the 340B program.

Financial/Contractual

An entity fee/term structure for vendor services that aligns with 340B program intent? • The vendor fully discloses all fees, including any fees for low usage

velocity or formulary removal. • $4 generic programs are exempt from fees to the entity or

adjudication cost to the pharmacy. • The vendor has logic that compares these prices (340B, the

pharmacy’s usual and customary, and a maximum allowable cost [MAC] + dispensing fee); the entity should pay the lowest of the three.

• The vendor allows for a non-penalty early cancellation during the first term (i.e., 90-day, no-cause termination).

• Entity permitted to select wholesaler • The vendor’s fees (including fees negotiated for contract pharmacy)

are in line with prevailing market rates. • The vendor discloses the standards by which it evaluates contract

pharmacies prior to inclusion into a network (e.g., the pharmacy is required to respond to patient complaints/recurring problems with dispensing).

• Entity patient recruitment to a vendor-owned or affiliated mail-order pharmacy is fully disclosed (information is obtained on these relationships as part of the proposal process).

• The contract defines net paid claim; the entity does not pay an adjudication fee on claim reversals.



Criteria are met.


Handout Page 27



Financial/Contractual (continued)

Ultimate control to the entity over third party and cash revenue issues? • The entity can create pre-edits to maximize 340B use (brand DAW

indicator as less expensive than generic). • The vendor has a “stop-loss” functionality, which prevents third party

adjudication if the claim will result in a net loss to the entity. • The entity can choose not to utilize 340B (without fee penalty) as

needed. • The vendor supports a sliding fee scale approved or designed by the

entity. • The vendor fully discloses and/or shares all rebate collections

involved through participation with any business (PBM, etc.).



Criteria are met.


Handout Page 28


Vendor #1 Vendor #2 Vendor #3 Vendor #4

Services Offered

Fees paid by entity to vendor

All fees paid by entity to contract pharmacy

Entity annual net revenue (estimate)

Integrity concerns (red and yellow lights from chart above)

Notes


Handout Page 29

Handout Page 30

entities can be chosen for either risk-based or targeted audits. all covered entity (ce) types are considered for risk-based audit selection.

Risk factors for a risk-based audit include characteristics that make your 340B

program more complex; these include the number of outpatient facilities, number

of contract pharmacies, and volume of purchases.

Targeted audits are triggered by allegations of violations of 340B requirements

at a specific covered entity; these are not limited to allegations that may

have been made by whistleblowers or manufacturers. OPA may also perform

a target audit to follow up on a covered entity’s corrective action plan.

HRSA AUDIT STEPS

pre-audit

• The covered entity’s authorizing official will receive the engagement letter fromHRSA four to eight weeks prior to the audit.• The letter will specify which 340B

ID number has been selected for audit and that the scope of the audit willinclude any offsite outpatientfacilities, contract pharmacies,and associated 340B ID numbers.

• The CE should identify a point personto communicate with the HRSAauditor who would be responsiblefor scheduling both the pre-auditpreparation call with the auditor andthe coordination of data requestedby HRSA.

• The CE primary contact should coordinatea conference call with the institution’saudit team and the auditor to discussthe data request as well as any otherquestions the team may have for theauditor regarding the audit.

• The data request information is usuallydue to the auditor two weeks prior tothe onsite audit.

• This is a good opportunity to ensure thatyou have provided 340B education to youraudit team and applicable organization staff.

HRSA AUDITS OF ENTITIES

Apexus | 340B Prime Vendor Program 888.340.2787 | [email protected] www.apexus.com© 2016 Apexus. All rights reserved.

Page 1

Pre-

Aud

it

Ons

ite A

udit

Post

-Aud

it Preliminary audit report submitted

internally by auditor

HRSA sends final report

Corrective action plan

Opening Meeting

Pharmacy staff interviews

Data sample review

Engagement letter

Data Request

HRSA Audits: Supporting Program Integrity

Handout Page 31

ONSITE AUDITHave your entire audit team available on call as resources.

Length of the onsite visit varies case by case based on the entity’s details.

OPENING MEETINGPharmacy tour and staff interviews• Ensure that your audit team is familiar with

the organization’s 340B policies andprocedures, because this is anintegral part of your audit.

• Clearly articulate your 340B processesand procedures to the auditor.

Data sample review • In preparation for the data transaction

tracers that occur during the onsite audit, it is recommended to determine audit tracer personnel based on 340B, pharmacy operations, and/or IT system knowledge prior to the audit. • Conduct tracer practice sessions

to determine the most efficientand rapid methods for retrievinginformation, including differentoutpatient locations, anesthesiarecords, and areas that may stilluse paper records.

• Perform transaction eligibility testingfor mixed-use and contract pharmacysettings.

• Checklist:Documentation of a prescription or medication order in the medical record with associated date of serviceDocumentation that it was written by a qualified providerDocumentation that transaction derived from an eligible location Documentation that patient is in outpatient status

Page 2

ROLES IN AUDIT PREPAREDNESS: INTERNAL

Pharmacy leadership:

• Provides the policies and procedures related to the 340B program, includingprocurement, inventory, dispensing, replenishment, contract pharmacy (CP)oversight, and prevention of duplicate discounts.

• Provides components surrounding inventory reconciliation and purchasesunder each of the purchasing accounts.

• Provides information related to the CPs (including the list of all arrangementsand documentation surrounding CP monitoring).

Authorizing officials:

• Identifies audit engagement letter from HRSA and contacts the primarycontact for next steps.

IT department:

• Prepares a data set that lists all 340B prescriptions or medication orders inthe six-month period designated by the auditor. This data set has a levelof detail that includes NDCs, prescribers, NPI, date, and patient status,among others.

• It is recommended to share this responsibility with the organization’s ITdepartment contacts even prior to an audit, so that they are familiarwith the type of requirements for this data set and are able to aggregateit from various IT platforms and data sources in the event of an audit.

Government:

• Provides the most recently filed Medicare cost report (for hospital CEs only). • Provides a copy of the covered entity’s Medicaid provider enrollment

verification letter.• Provides contract with state or local government , if applicable.

Office of provider credentialing:

• Provides a list of all providers who are either employed by the coveredentity or provide health care under contractual or other arrangements.

• It is recommended that the organization is able to locate the contracts for all ofthese eligible providers if requested during an audit.

• The organization should be familiar with how often the provider list is updated,how the list is utilized for eligibility verification, and includes that procedurein its 340B standard operating procedures.

HAVE AN AUDIT TEAMThe 340B program is an entire organization’s responsibility and is not limited to one department. It is best practice that an interdisciplinary team have oversight of an organization’s 340B program established prior to an audit engagement.Each of the following groups plays an integral role in the various steps of a HRSA audit.

Handout Page 32

HRSA AUDIT FOLLOW-UP

*If no corrective action plan within 60 days of that report, entity terminated

Corrective Action Plan (CAP)• Provide immediate remedy• Propose plan for periodic assessment, continuous monitoring,

and method to determine when CAP is completed• Identify implementation date• Devise internal 340B communication/education strategy• Provide entity contact person• HRSA to provide a general outline dependent on type of finding

TYPES OF SELF-AUDITIt is essential to have continuous self-auditing processes and have your internal audit team to evaluate the results of the self-audits to identify any systematic issues in your 340B program.

POST-AUDIT

• The auditor will not provide anydetermination on compliance orgaps in compliance at the end ofthe audit.

• Onsite findings will be consideredpreliminary, and a basis for review byHRSA’s Office of Pharmacy Affairs.

• Formal notification of the audit findings will be sent typically within 30 to 90 days.

• Potential outcomes:• No adverse findings• Identified areas for improvement • Adverse findings and a request

for a corrective action plan (CAP)• Failure to provide a requested CAP

in a timely fashion can result inremoval from the 340B program

• OPA now accepts all audit-relatedsubmissions in a new emailinbox. Electronic versions ofdocuments can be sent via emailto [email protected]. Hardcopies are no longer requiredto accompany the electronicsubmission.

Apexus provides several tools and resources that facilitate self-auditing and support audit preparedness. These are available at www.apexus.com/solutions/education/340b-tools

Page 3

HRSA notice and hearing; entity has 30 days to review findings and HRSA’s request for Corrective Action Plan (CAP) (if applicable).

If agree with report: 60 days to submit corrective action plan*; If disagree with report: notify HRSA in writing within 30 days with supporting documentation.

Audit summary and corrective action, once approved, posted on HRSA website.

Results support education of covered entities.

Ongoing system audits• Pharmacy systems• Split billing systems• Billing systems

Workflow audits• Interview staff• Identify knowledge gaps• Capture opportunities

for systems failure (e.g.,borrowing)

Annual mock HRSA/ manufacturer audit• Policies and procedures• New/updated regulations• Organized communication• Billing Medicaid• GPO exclusion• HRSA website information

Monthly mini-audits• Drug specific• Patient specific• Location specific

Handout Page 33

For more information contact Apexus Answers.

Apexus | 340B Prime Vendor Program 888.340.2787 | [email protected]

www.apexus.com© 2015 Apexus. All rights reserved.

9.9.2015

Handout Page 34

340B University Tools Page 1 Establishing Material Breach Threshold Tool


Purpose: This tool is designed to provide entity leaders with a framework to guide the written documentation of the entity’s definition of a material breach of compliance and the development of a process to determine materiality that requires self-disclosure, based on leading practices. Note: Materiality is commonly regarded as a convention within auditing/accounting pertaining to the importance/significance of an amount, transaction, or discrepancy.

Background: Upon annual recertification, each covered entity’s authorizing official must attest that “the covered entity acknowledges its responsibility to contact HRSA as soon as reasonably possible if there is any … material breach by the covered entity of any of the foregoing [aspects of 340B compliance].” In this context, "material breach" refers to an instance of noncompliance with any of the 340B program requirements. To increase program transparency among all stakeholders and ensure that covered entities can rely on a reasonable threshold to guide consistent and effective self-disclosure decision-making, it is recommended that covered entities define “material breach” for their organizations and establish a process for self-disclosure in their policies and procedures.

A breach of 340B compliance requirements include any adverse event that results in diversion and/or duplicate discounts. For example, the following events are considered adverse: a facility that uses the 340B Program while not being eligible, a facility providing 340B drugs to ineligible patients, 340B drugs go missing in a facility's inventory, and a facility billing for 340B drugs contrary to an organization’s MEF status.

Action Action Taken

Instructions

1. Identify staff to perform assessment and documentation.

2. Obtain current Policy & Procedure Manual.

3. Refer to the table below to determine if existing material breach threshold policy and procedure adequately address each item.

4. Follow the “recommended steps” in the left-hand column of the table below with a written response in the right-hand column.

5. Read the sample material breach definition statement (see below) intended for various covered entity types.

6. Engage with IT/Purchasing/Billing/Pharmacy to obtain data element(s) selected for decision-making.

7. Draft your own statement for your organizations material breach definition.

Handout Page 35



Recommended Steps Response

1. Establish a threshold for what would constitute a material breach of compliance that would require self-disclosure. Ensure identification of any threshold variations among 340B settings (e.g., contract pharmacies).

2. Determine and articulate when, how, and by whom (e.g., 340B task force, compliance officer):

a. materiality would be assessed; b. self-disclosure to HRSA and/or manufacturers accomplished, and; c. corrective action plans submitted, approved and completed in the

organization’s standard operating procedures.

3. Describe the maintenance of records of materiality assessments and of threshold and sub-threshold violations that led to manufacturer correspondence and/or formal self-disclosure process through HRSA, corrective action plans and incident resolution in the organization’s policy and procedures.

4. Determine how often and by whom the organization’s standard operating procedures concerning material breach are to be reviewed. Consider:

a. date of policy origination and; b. date of last review/revision/approval, ensuring that the date of last

review/revision/approval aligns with the organization’s established policy and procedure process.

Sample Statement: [Entity Name] defines a material breach of compliance as a violation(s) that exceeds [threshold indicator – see examples below*]. Such violations require self-disclosure. Violations identified through internal self-audits, independent external audits, or otherwise that [meet or] exceed this threshold, and that remain non-correctable within the entity-defined period timeframe of review, will be immediately reported to HRSA (at [email protected]) and applicable manufacturers using the following self-disclosure report template: https://docs.340bpvp.com/documents/public/resourcecenter/ALL_Entities_Self_Reporting_340B_Non_Compliance.docx

Entity Name] has a [340B committee] that oversees this process, reviews potential violations, performs materiality assessment, and determines if a material breach has occurred. The committee identifies to whom to self-disclose the breach dependent on that materiality determination and the corrective action plan resolution.

On behalf of [Entity Name] the [340B committee] reviews this policy [annually], makes decisions about the material breach definition and self-disclosure and submits any changes to the [Board] for approval.

[Entity Name] maintains records (including all internal or external correspondence and corrective action plans) of violations, materiality assessment, and resolution of manufacturer self-disclosure and/or formal self-disclosure to HRSA.

Handout Page 36

mailto:[email protected]

https://docs.340bpvp.com/documents/public/resourcecenter/ALL_Entities_Self_Reporting_340B_Non_Compliance.docx



*Examples of threshold indicators (use one or more in each definition to be applied within entity-defined review period timeframe of review):

1. X% of total 340B purchases or impact to any one manufacturer 2. $X (fixed amount), based upon total outpatient or 340B spend, or impact to any one manufacturer 3. X% of total 340B inventory (units) 4. X% of audit sample 5. X% of prescription volume/prescription sample 6. Will not self-correct within x months

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages all stakeholders to include legal counsel as part of their program integrity efforts.

Handout Page 37



© 2016 Apexus. Permission is granted to use, copy, and distribute this work solely for 340B covered entities and Medicaid agencies.

Handout Page 38

Medication IN: Invoice Number

Medication OUT: Patient ID/Chart #

Date Dispensed/

Administered OR Receivied

Quantity ( - ) Dispensed/

Administered OR ( + ) Received

(=) Total On Hand

Route Lot # Expiration Date Nurse or Designee Provider Name Patient Signature

Date and Name Reconciled Log On Hand

Actual On Hand

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

• State provider dispensing laws should be followed for all processes.• Each new page should be pre-populated with the Medication name, NDC and JCODE if appropriate at the top of the page.• Each new page should be started with the quantity remaining on the previously used page.• Nurse Manager or designee orders medications from wholesaler order system.• Medications received are entered into tracking sheet with Invoice number, NDC, Quantity, Lot #, Date received• When a product is requested by a provider, Nurse, or designee, selects appropriate tracking sheet by Drug Name and NDC and enters data for dispensation and the remining total on hand after dispendation. • Data may also entered in patient record in EMR if appropriate.

© 2015 Apexus. Permission is granted to use, copy, and distribute this work solely for 340B covered entities and Medicaid agencies.

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages all stakeholders to include legal counsel as part of their program integrity efforts.

Beginning Balance of Medication Units: ___________

DIRECTIONS FOR TRACKING PROCESS:

Entity Name/ Clinic Site of CareFamily Planning Dispensation/Administration Tracking Log

Enter Medication Name, NDC (1 Med per page), JCODE

Handout Page 39

Handout Page 40

340B University ‐ April 16, 2016

April 16, 2016

340B UNIVERSITY™

Alexandria Edition

© 2016 Apexus. Reproduction without permission is prohibited.

340B UNIVERSITY LOGISTICS


• Overview of Session

• What’s in your Participant Packet Agenda

340B Glossary (p. 3)

340B Acronym Guide (p.15)

Tools:

Mapping 340B Drug Operational Environment (p. 19)

340B Compliance Self-Assessment: Vendors Tool

(p. 25)

HRSA Audit Handout (p. 31)

Material Breach Documentation Tool (p. 35)

FP Dispensation Admin Tracking Log (p. 39)

Session Slides (p. 41)

340B University Logistics


• You can use the microphones.

• Meagan Thompson, previously with Apexus Answers

Ask Your 340B Questions Today


• Introduce yourself to your seatmates

• Share your stories

• Ask your questions

• Turn your cell phones to silent

Networking Do’s & Don’ts


Tools and Resources


340B Tools

Handout Page 41


WELCOME TO 340B UNIVERSITY!


• The mission of Apexus is to leverage our unique resources and expertise to deliver maximum value to 340B stakeholders

• Contract for the lowest sub-ceiling and sub-WAC drug prices

• Support YOUR program compliance and integrity

About Apexus


• Support HRSA’s integrity initiatives with the 340B program

• Support the 340B PVP and other stakeholders’ needs in providing a comprehensive program that assists in implementing compliant 340B pharmacy operations, consistent with HRSA’s interpretation

• Train new employees within the 340B covered entities

• Clarify misinformation received from unreliable sources

Goals of 340B University


• Continuously refreshed to reflect the latest HRSA policy and guidance

– Contract pharmacy arrangements

– Orphan drugs

– Medicaid

• ONLY training program endorsed by HRSA

– Ensures consistency with HRSA’s interpretation of 340B policy

• Program integrity and compliance for all stakeholders

Goals of 340B University


Faculty Yearbook


COLLEEN BORNMUELLERCBSS Coordinator

Family Planning Council of Iowa

ROSE BABBITTVice President, Federal Contracts and Grants

American Pharmacists Association

TRACEY COLEDirector of Peer Program

American Pharmacists Association

Faculty Yearbook


SMITA GOYALPortfolio Executive

Apexus

MINDY MCGRATHPolicy Director

National Family Planning & Reproductive Health

Association

KATHERYNE RICHARDSON

Senior Director of 340B Education & Compliance Support

Apexus

Handout Page 42


Staff


KAREN ORSOSenior Director of

Marketing & Education

Apexus

MEAGAN THOMPSONSalesforce Analyst & former Apexus Answers Call Center

Specialist

Apexus

• HRSA’s intent remains consistent: To permit covered entities “to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

• It is more critical than ever to ensure that all 340B providers are carefully documenting their savings with this program, and how it aligns with the program’s intent.

Program Scrutiny & Era of Compliance


• Apexus Answers call center

• Peer-to-Peer program & webinars

• 340B tools located on the Apexus web site

• Participant dashboard

• Many others

HRSA-Supported Tools & Resources


340B BASICS


1. Discuss 340B basic concepts at a high level.

2. Describe 340B compliance.

Objectives


WHAT IS THE 340B PROGRAM?


Handout Page 43


340B Statute

• Resulted from a 1992 federal statute

• Manufacturers participating in Medicaid Drug Rebate Program mustsign a Pharmaceutical Pricing Agreement (PPA) with the Secretary of Health and Human Services

– The manufacturer agrees to charge a price for covered outpatientdrugs that does not exceed the 340B price


340B Price

• Calculated quarterly


– Medicaid unit rebate amount (URA)

340B ceiling price• Manufacturer submits data to CMS


Pricing Comparison


100%

79%

64%51%

42%

100%

50%

0%

PRIVATE SECTOR PRICING“BEST PRICE” 63%

AWP AMP GPO MedicaidRebate

340B VeteransAdministration

66%

ApexusPVP

WAC

83%

Disclaimer: Pricing comparisons listed are for estimation purposes only and may vary based upon GPO class of trade for an organization.

340B Covered Outpatient Drugs (COD)

http://www.ssa.gov/OP_Home/ssact/title19/1927.htm© 2016 Apexus. Reproduction without permission is prohibited.

• Outpatient drugs• Over-the-counter drugs

(with a prescription)• Clinic administered

drugs• Biologics• Insulin

WHY IS THERE A 340B PROGRAM?


340B Intent

To permit covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.

H.R. Rep. No. 102-384(II), at 12 (1992)

“ “


Handout Page 44

MRIDDLE

Stamp


WHO IS INVOLVED IN THE 340B PROGRAM?


Federal Grantees/Designees Certain Hospitals• Federally qualified health center

• Federally qualified health center look-alikes

• Title X family planning grantees

• State aids drugs assistance programs

• Ryan White care act grantees (A,B,C,D,F)

• Black lung clinics

• Hemophilia treatment centers

• Native Hawaiian health centers

• Urban Indian organizations

• Sexually transmitted disease grantees

• Tuberculosis grantees

• Disproportionate share hospitals

• Children’s hospitals

• Critical access hospitals

• Free standing cancer hospitals

• Rural referral centers

• Sole community hospitals

340B Eligible Entities


• HRSA 340B Database

– March 2016

• 34,484 registered sites; 15,709 are non-hospital sites

• 17,463 unique contract pharmacies

• 3,298 Title X sites

HRSA 340B Database: Statistics


• Not an option for FP grantees

• Rationale


Parent and Child Sites

Consider this…


When was the last time you reviewed your 340B database entry?

ask your questions by using the microphones

What percent of HRSA audit findings have been attributed to database errors?

• 5%

• 25%

• 35%

• 60%

Vote by Show of Hands


Handout Page 45


Apexus Focus

340B Prime Vendor Program

CONTRACTING


340B University

340B University OnDemand

EDUCATION ASSISTANCEApexus Answers

Call Center


Customized Quarterly Price List for all Reproductive Health Products


Access the Women’s Health Title X Quarterly Pricing

28 Authorized Distributor Partners

NATIONAL DISTRIBUTORS

REGIONAL DISTRIBUTORS

SPECIALTY DISTRIBUTORS

LIMITED DISTRIBUTORS/3PLs

ANDABurlington Drug Co,Cesar Castillo, Inc.Dakota DrugFrank W. Kerr

Henry ScheinH.D. Smith Drug Co.Kinray, Inc.Morris & Dickson, Co.Mutual Drug Company

Rochester Drug Coop.

R&S SalesSmith Drug CompanyValue Drug Company

ASD HealthcareBesse MedicalBioCARE

Cardinal Specialty

CurascriptFFF Enterprises

Dohmen Life Sciences (Centric)

McKesson Plasma & BiologicsMedico‐Mart

Smith Medical PartnersVaxserve, Inc.

AmerisourceBergen Cardinal Health McKesson Drug

Women’s Health Sub-340B Suppliers• Actavis (formerly Watson; purchased by Teva)

• Merck

• Pfizer

• Sandoz

• Sun Pharma

• Teva

Apexus Contracting Value

© 2015 Apexus LLC. Reproduction without permission is prohibited. © 2015 Apexus LLC. Reproduction without permission is prohibited.

Apexus Savings

30.73%

27.08%

20.10%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2013‐2015 PVP Savings % by Entity Group

2013 Savings Percentage 2014 Savings Percentage 2015 Savings Percentage

Handout Page 46



Liletta available for $50


Apexus Secure PVP Website


Apexus Secure PVP Website

HOW DOES AN ENTITY PARTICIPATE IN THE 340B PROGRAM?


1. Ensure it has the capability to follow (and maintain auditable records documenting compliance with) program rules

2. Register on the HRSA 340B Database

3. Recertify with HRSA annually

To Participate in 340B, an Entity must…


• New entities, entity sites, contract pharmacies, Medicaid information

– 2 week registration periods, quarterly updates made to HRSA 340B Database

• Change requests: changes to existing information, rolling basis

Registration Process

Update Official October 1 January 1 April 1 July 1

Registration Period

July 1 – 15

October 1 -15

January 1 – 15

April 1 - 15


Handout Page 47


• HRSA uses it for validation of site information

• Electronic handbook (EHB) data incorporated as part of recertification in February 2014 for other grantee types

Office of Population Affairs


Recertification

• Entities are required to recertify information in the HRSA 340B Database annually

• HRSA sends a notification email to authorizing official and primary contact

• HRSA sends username/password only to the authorizing official

• The authorizing official performs the recertification online


• Database entry is complete, accurate, correct

• Entity meets 340B eligibility requirements

• Compliance with 340B requirements/restrictions

• Maintenance of auditable records

• Systems in place to ensure compliance

• Contract pharmacy compliance, entity obtains sufficient information

• Entity contacts HRSA for any breach of the above

• Entity acknowledges possibility of payment to manufacturers for failure to notify HRSA in timely fashion

Recertification Statements


• Anticipated mid-May

• HRSA webinar


Title X Recertification

I have at least one 340B contract pharmacy.

• Yes

• No



• Central model (drugs purchased centrally and then state distributes to clinics)

• Decentralized (drugs purchased locally and then state distributes to clinics)

• Provider dispensing/administration

• Entity-owned pharmacy

• Contract pharmacy


Getting Drugs to Patients

Handout Page 48


PREVEN

T DIVER

SION

MAN

AG

E IN

VEN

TORY

Physical Inventory


340B Inventory on Shelf

Pharmacy OutpatientClinic

MedicationsDispensed

Medications Dispensed/

Administered

Covered entity bills payor and tracks use of 340B inventory

Re-ordering 340B drugs

Shipment of drugs received

Patient eligibility for 340B determined at Point of Service

PREVEN

T DIVER

SION

MAN

AG

E IN

VEN

TORY

Virtual Inventory


Neutral Inventory on Shelf

Covered entity accumulates and bills dispensed/ administered drugs

Patient eligibility for 340B determined retrospectively

Drugs dispensed/administered to patients

Re-ordering of drugs; accumulatorsdetermine which account is used

Shipment of drugs received

Contract Pharmacy In-House Pharmacy

• Contracts with covered entity to provide services to its patients,including dispensing of entity-owned drugs

• Covered entity must have a written contract aligning with compliance elements in guidance

• Owned by, and a legal part of, the 340B entity

• Bill to/ship to arrangement• Registered on HRSA 340B

Database

• Typically listed as shipping addresses

• Not eligible to be listed as child site

Contract vs. In-House Pharmacy


340B Contract Pharmacy – Overview

• HRSA guidance permits

entities to partner with

outside pharmacies to

provide eligible patients with

340B medications– Identification via shared

patient and provider data

– Inventory via “Bill To - Ship To”

wholesale arrangements

Bill ToShip To

WHOLESALER

COVERED ENTITYCONTRACT PHARMACY


Contract Pharmacy Inventory Management

Separate Inventory Replenishment Model

Software needed

Complex record-keeping

Lower inventory costs

Higher inventory costs

Simpler maintenance


340B Contract Pharmacy Process

1. Contract pharmacy dispenses drug (non-340B inventory) to 340B entity’s eligible patient

2. When a full package size of the Rx is reached, the pharmacy or vendor orders a 340B drug to replace it

3. Replacement 340B drugs are “billed to” the entity and “shipped to” the contract pharmacy

4. Entity pays contract pharmacy for its services© 2016 Apexus. Reproduction without permission is prohibited.

Handout Page 49


Contract

First, entity has a written contract pharmacy agreement in place with specified pharmacy, including full listing of all pharmacy locations that may be utilized under that agreement.

Oversight

Entity has written 340B policies and procedures to ensure program compliance and oversight activities of the contract pharmacies. Entity is prepared to follow CP oversight plan and be in compliance with requirements.

Database Registration

Entity registers contract pharmacies on HRSA database for participation in 340B Program, with obligation of ensuring ongoing compliance.

CP Implementation

Steps PRIOR to Contract Pharmacy (CP) Implementation


• 10% of FP sites have contract pharmacies

• This includes 50% of states

• Map by zip-code, same as next slide, but updated for current data


Contract Pharmacy MAP Slide


Title X and Contract Pharmacies

State with contract pharmacy

State without contract pharmacy

Contract pharmacy location

Tool: Contract Pharmacy Vendor Assessment

340B Compliance Self-Assessment: Vendors


WHAT ARE THE RULES AND HOW ARE THEY ENFORCED?


Why 340B is like an onion…


Policy Releases

Guidelines

Regulations

Statutes

Handout Page 50


• HRSA audits of entities

– Operational Site Visits for HRSA grantees

• HRSA audits of manufacturers

• Manufacturer audits of entities

• Self-audits

340B Audits


1. Duplicate discount prohibition

2. No diversion (patient definition)

3. Certain hospitals only

– Group Purchasing Organization (GPO) Prohibition

– Orphan drug exclusion

Major 340B Compliance Areas


340B price Medicaid rebate

Duplicate Discount Prohibition


• Records of individual’s care• Health care services, health care professional

– Employed by, under contractual or other arrangements (referral)

• Entity has responsibility for care• Service received is consistent with funding or

designation status (hospitals exempt)• Services must be more than dispensing• AIDS Drug Assistance Program (ADAP) exception

Patient Definition



COD Interpretation Applying Patient Definition in Practice

Covered entities carving‐out Medicaid must ensure that 340B drugs are not billed to Medicaid

Covered OutpatientDrug Order/Prescription

Provide 340B Drug

Excludes ADAP (Scope of Grant Applies to Grantees Only)

Handout Page 51


HOW DOES AN ENTITY ESTABLISH INFRASTRUCTURE TO SUPPORT

COMPLIANCE?


• Dedicated FTEs• Standard operating procedures• Self-auditing• Program oversight committee• Relationship and oversight of third parties

– Contract pharmacies

• Ongoing staff education• Tools, call center• HRSA Peer-to-Peer Program (webinars)

340B Resources



Map Your 340B Use: New Tool

Mapping the 340B Drug Operations Environment


Standard Operating Procedures: Tool

Sample 340B Policy & Procedures Manual

340B University OnDemand Education


Assistance: Apexus Answers

• Apexus Answers is verified and endorsed by HRSA

• Staff in constant communication with HRSA to ensure messaging is consistent

• FAQs available on apexus.com

• Average monthly interactions ~1,500 – 2,000

• Tiered levels of response: can handle from basic to complex


Handout Page 52


Questions

© 2016 Apexus. Reproduction without permission is prohibited.ask your questions by using the microphones

I’m interested in learning more about the contracting opportunities:

• Yes

• No



340B & MEDICAID


Objectives

• Review how a duplicate discount is created and and how to prevent it

• List action steps to review compliance with the duplicate discount prohibition


340B price Medicaid rebate

Duplicate Discount Prohibition


Medicaid Exclusion Terminology

Carving-In Carving-Out


340B 340B340BMedicaid Patient

Handout Page 53


• At registration, covered entities inform HRSA whether the covered entity will purchase and dispense 340B drugs to their Medicaid patients (“carve-in”) or whether they will purchase drugs for their Medicaid patients through other mechanisms (“carve-out”).

• HRSA provides the 340B Medicaid Exclusion File as the official data source to determine whether 340B drugs are billed to Medicaid in order to prevent duplicate discounts.

• December 12, 2014 Release No. 2014-1 http://www.hrsa.gov/opa/programrequirements/policyreleases/clarificationmedicaidexclusion.pdf

Clarification of Medicaid Exclusion File


(“carve-in”)

(“carve-out”)

HRSA 340B Database: Medicaid


How does the Medicaid Exclusion File work?

MedicaidExclusion

File

Manufacturer

State

Entity

340B Discount

Medicaid Rebate


• 80% of Title X sites carve-in

• 100% Carve-in States – 7% of total– Arkansas – 97 grantees

– Michigan - 91 grantees

– Nevada – 19 grantees

– Vermont – 11 grantees

– Wisconsin – 19 grantees

• 100% Carve-out States – 2% of total– Georgia – 1 grantee

– Utah – 83 grantees


Medicaid Data, MARCH 2016 HRSA, CMS & State 340B Policy

HRSA Policy• Prevent duplicate discounts• Use the Medicaid Exclusion File• Bill according to the state policy (no HRSA AAC

requirement)

CMS Policy• Collect rebates on claims (including MCO and clinic

administered)• 340B drugs are not subject to these rebate collection

requirements

State Policy• How will duplicate discounts be prevented in the state?• How will 340B entities bill Medicaid and how will Medicaid

reimburse these entities when using 340B drugs?


Handout Page 54


Preventing Duplicate Discounts

© 2016 Apexus. Reproduction without permission is prohibited.© 2016 Apexus. Reproduction without permission is prohibited.

Our entity carves-in (uses 340B for drugs billed to Medicaid), and we have listed our entity’s NPI in the exclusion file. Can duplicate discounts still occur?

• Yes

• No

Targeting Program Integrity


Our entity carves-in (uses 340B for drugs billed to Medicaid), and we have listed our entity’s NPI in the exclusion file. Can duplicate discounts still occur?



Can we use 340B for Medicaid patients at our contract pharmacy?

• Yes

• No



Can we use 340B for Medicaid patients at our contract pharmacy?





Handout Page 55



Is there a risk of creating a duplicate discount if we use 340B drugs for Medicaid MCO claims?

• Yes

• No



Is there a risk of creating a duplicate discount if we use 340B drugs for Medicaid MCO claims?




Our entity wants to use 340B drugs for Medicaid at some clinics, but not at other clinics. Is there a way to support doing this in the HRSA Medicaid Exclusion File?

• Yes

• No



Our entity wants to use 340B drugs for Medicaid at some clinics, but not at other clinics. Is there a way to support doing this in the HRSA Medicaid Exclusion File?



We bill at an all-inclusive rate for Medicaid, no NDC is transmitted to Medicaid, and therefore no duplicate discount will occur. We do use 340B for these patients; does HRSA expect us to answer YES to its Medicaid question?

• Yes

• No


Handout Page 56



We bill at an all-inclusive rate for Medicaid, no NDC is transmitted to Medicaid, and therefore no duplicate discount will occur. We do use 340B for these patients; does HRSA expect us to answer YES to its Medicaid question?



Our entity carves-in and is located in NY and currently has our Medicaid Provider number for NY listed in the MEF. We also bill Medicaid in 12 other states. Are we in compliance with preventing duplicate discounts since the state that we are located in is listed appropriately?

• Yes

• No



Our entity carves-in and is located in NY and currently has our Medicaid Provider number for NY listed in the MEF. We also bill Medicaid in 12 other states. Are we in compliance with preventing duplicate discounts since the state that we are located in is listed appropriately?


Program Integrity

• All covered entities are expected to have written policies and procedures pertaining to the prevention of duplicate discounts, and ensure their database listing is consistent with actual practice.


Program Integrity

• If a HRSA audit reveals that a covered entity’s information on the 340B Medicaid Exclusion File does not reflect actual billing practices, the covered entity could be found in violation of the duplicate discount prohibition and may be required to repay manufacturers in an amount equal to the reduction in the price of the drug.

• Through the corrective action process, HRSA will direct covered entities to work with States and manufacturers to determine whether a duplicate discount occurred as a result of the incorrect 340B Medicaid Exclusion File listing.


Program Integrity


Handout Page 57


340B ID CE IDMedicaid Number Medicaid State NPI Number

DSH 969 1123456711

DSH 969 250006 TX

DSH 924 250002 TX

DSH 15542 250001 TX

DSH 8554 1214789325

DSH 2224 250123 TX

DSH 17892 1278524632

DSH 17892 250124 TX

DSH 3741 250856 TX

DSH 5113 250370 TX

DSH 8741 1374259634

DSH 8741 250911 TX

DSH 11234 1234563211 TX

Do you see any problems here?


340B ID CE ID Medicaid Number Medicaid State

FQ 1234 1000054210010 UB

FQ 5214 1000054210011 UB

FQ 11004 1000054210008 UB

FQ 17441 100005421015 UB

FQ 8521 100005421009 UB

FQ 4521 1000054210013 UB

Do you see any problems here?


1. Verify the HRSA 340B Database is accurate

2. Contact your state Medicaid agency to ensure you understand state requirements

3. Determine way to account for retrospective Medicaid eligibility

4. Perform a self audit of Medicaid prescriptions

5. Ensure you do not use 340B for Medicaid patients at a contract pharmacy unless you’ve notified HRSA of an arrangement to prevent duplicate discounts

Actions to Review Duplicate Discount Prohibition Compliance


• What is the state’s general policy on Medicaid rebates on 340B drugs (for example, does the Medicaid Agency use the OPA Exclusion File or other methods of segregating claims?)

• If our entity uses 340B for Medicaid, what procedure should we use to notify the state Medicaid agency that a 340B drug was unavailable?

FROM RELEASE No. 2014-1 In the event that a covered entity that is listed on the 340B Medicaid Exclusion File as using 340B drugs for MFFS patients, but is unable to use a 340B drug in a particular instance, it must have a mechanism in place to notify the state Medicaid agency. • Does the State Medicaid Agency exclude 340B claims when seeking a

Medicaid Rebate on claims from patients:

1. That are billed from Medicaid Managed Care

2. That received physician administered Drugs

3. That are “Dual Eligible” (Medicaid/Medicare)

4. In any other circumstance?

What to Ask Your State


• Check the HRSA 340B Database listing to ensure the Medicaid information reflects practice (remember MCO not addressed)

• Ensure Medicaid patients with retroactive eligibility are accounted for in 340B software/operations and treated consistently with standard operating procedures

Tips for Technicians and 340B Coordinators


Questions



Handout Page 58


340B AUDIT PANEL


• Review the key points of the audit processes

• Outline key lessons learned from HRSA and manufacturer audits

Objectives


HRSA AUDIT OVERVIEW


Handout Page 31

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016*

(As of 03/11/16)

Number of coveredentities audited

51 94 99 200 80

• Outpatient facilities/sub-grantees

410 718 1,476 2,720 2,034

• Contract pharmacies 860 1,937 4,028 4,443 1,736

Number of finalized reports

51 94 98 172 14

HRSA Audits by the Numbers


I have been audited by HRSA:

• Yes

• No



ENTITY EXPERIENCES:LESSONS LEARNED


Handout Page 59


Scenario:

An STD grantee gives in-kind lab services to a prenatal clinic. May the STD 340B purchased drugs be used on the prenatal clinic’s patients?

If there are no in-kind services provided to the prenatal clinic and it is unregistered, may the STD 340B purchased drugs be used on the prenatal patients?

Diversion: Considerations

HRSA FINDINGS

340B drug dispensed for prescription written at ineligible site, by ineligible provider, or not supported by medical record

Entity did not have adequate controls in place for proper accumulation and prevention of diversion


• Diversion occurs when a 340B drug is provided to an individual who is not an eligible outpatient of that entity (not meeting all or part of the patient definition), AND/OR dispensed in an ineligible area clinic

• Different approaches to eligibility verification (to include location):

– Barcodes, location codes, e-prescribing

Diversion: Lessons Learned


Scenario:

If the Medicaid Provider Number is already in the Medicaid Exclusion File one time with one entity in the state, does that “cover” other entities in the state that also use that number and carve-in?

Duplicate Discounts: Considerations

HRSA FINDINGS

Entity was billing Medicaid contrary to information contained in Medicaid Exclusion File

340B drugs dispensed to Medicaid patients by contract pharmacy, absent arrangement to prevent duplicate discounts

Inaccurate or incomplete information in Medicaid Exclusion File


• All clinics under the same Medicaid provider number/NPI must handle Medicaid drugs in the same manner

• In past audits, entities have received findings for Medicaid Exclusion File (MEF) inaccuracies, whether or not those inaccuracies have led to duplicate discounts.

• MEF requirements must be followed in all cases, even in carve-in arrangements for contract pharmacies

• Contact State Medicaid director before audit on how handling entity’s claim in regards to rebates

– Try to get documentation of confirmation

Duplicate Discounts: Lessons Learned


Have you contacted your state Medicaid office about the state’s practice on preventing duplicate discounts?

• Yes

• No



Scenario:

Can a male client who meets the 340B definition of patient and being seen in a Title X clinic purchase 340B emergency contraception (EC) for use by a current or perhaps future female partner who may wish to use EC?

Auditable Records: Considerations

HRSA FINDINGS:

Entity failed to maintain auditable medical records


Handout Page 60


• Auditable records include specific documentation that all 340B Program requirements are met for every 340B drug.

• Handling self-audit records; who reviews these and makes decisions about self-reporting? Are they shared with others, and if so, under what circumstances?

Auditable Records: Lessons Learned


• There are going to be times where an auditor does not know that the audit will include associated sites UNTIL they speak to the entity under audit

• If the entity self-discloses AFTER receiving the HRSA audit letter, the self-disclosure will be treated as part of the audit process


Audit Letter, Scope of Audit

MANUFACTURER PERSPECTIVE


• What are the “triggers” that manufacturers use to determine need for informal dispute resolutions and/or audits of entities?

• What data is used by manufacturers to substantiate these engagements? Challenges in data transparency?

• What can an entity expect when contacted by a manufacturer as an informal engagement/inquiry?

Manufacturers Auditing Entities


Key Takeaways

• Entities can prepare for HRSA and manufacturer

340B audits with available tools and resources

– Apexus tools: self-audit, sample HRSA data request

• Prepare for a HRSA audit now

– Assemble a team of experts and self-audit

• Compliance is the entity’s responsibility; do not rely

on a vendor’s records alone

• There are lessons to be learned from prior audits


Questions



Handout Page 61


340B HOT TOPICS


• Describe current events in the 340B environment

• Discuss 340B-compliant approaches used by leading practices to common hot topics

• Discuss tools available for entities

Objectives


• AMP Rule: Published February 1, 2016

• 340B implications

– Definitions of best price, covered outpatient drug

• Impact still being evaluated

– Medicaid FFS

• States must reimburse 340B entities at AAC; states must have a plan for dispensing fee for 340B entities and contract pharmacies

– Medicaid MCO

• AAC reimbursement for 340B entities is not mandated

• 340B claims for MCO Medicaid are not subject to rebate requirements

• Duplicate discount prevention is the responsibility of the state


Medicaid Reimbursement

I feel our 340B-related SOPs are adequate and ready for a HRSA audit.

• Yes

• No



• SOPs to address:

– Oversight of contract pharmacies (internal and external audits, documentation, plan for when discrepancies occur)

– When and how self-disclosure would occur, material breach definition

– Handling controlled substances

Be Prepared in 2016


Grantee

Subgrantee B

B1

B2

Subgrantee C

C1

Subgrantee D

D1

D2

340B Purchasing, Inventory Transfer

© 2015 Apexus LLC. Reproduction without permission is prohibited.

Handout Page 62



Inventory, Responsibility Scenarios

• Can Subgrantee B transfer inventory to Subgrantee C?

• Can Subgrantee B transfer inventory to Subgrantee D?

• What responsibility does the Grantee have for the oversight of its subgrantees?

Question for Panel


Our Title X grantee provides services in a mall; must we

register that site?


Question for Panel


How do you define material breach?


• X% of total 340B purchases or impact to any one manufacturer

• $X (fixed amount), based upon total outpatient or 340B spend, or impact to any one manufacturer

• X% of total 340B inventory (units)

• X% of audit sample

• X% of prescription volume/prescription sample

Material Breach


If an organization loses Title X funding, but still has STD funding, what has to happen to the inventory purchased on the Title X 340B account?


Inventory, Termination Question for Panel


Is the grantee responsible for its subgrantee’s sites in

a HRSA audit?


Handout Page 63


Question for Panel


FP entities often are located in rural areas and the health department

would need to contract with a private specialist for certain activities that a nurse might not be able to provide

(ex. insert/place IUD). In this situation, the private physician could

have a contract with the FP entity, but the location wouldn’t be registered, is

this OK?


• Mega-guidance published 8-28-15

• 60 day comment period (ended 10-27-15)

• Timeline could be 1 year before finalization

• Focused on improving program integrity

• Increased requirements for both entities and manufacturers

Mega‐guidance Overview

• Entity restrictions/areas– Covered outpatient drug (limiting definition, Medicaid bundled claims)– Patient definition (discharge, referral, self-insured plans)– Records (5 years for entities and manufacturers)– Contract pharmacy annual and quarterly audits (expectation)

• Medicaid– HRSA considering changes to Medicaid Exclusion File to handle separate carve-in

decisions for MCO vs. FFS• Manufacturer restrictions/areas

– 90 days for manufacturers to correct overcharges– Limited distribution plan submission to HRSA for specialty drugs with restricted

availability– Manufacturer recertification

Mega-Guidance Key Areas


Questions



340B UNIVERSITY WRAP-UP


Apexus Answers 340BPVP.com

• Register for access to secure section for contract maximization

Take Action

[email protected]

Apexus | 340B Prime Vendor Program | 290 E John Carpenter Frwy | Irving, TX 75062


Handout Page 64


Attending the NFPRHA Conference? Visit Apexus at Booth #22


THANK YOU FOR ATTENDING340B UNIVERSITY!


Handout Page 65

340b university 340b university is attended by 340b entities, ... negotiates sub-ceiling 340b...

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