340B, the ACA, and YOU

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340B, the ACA, and YOU

To fully address the topic of how 340B and the ACA are intertwined would take far more than one blarticle (Roxie word for blog + article); but I will do my best to “nutshell” it. Regardless of your political views and where you stand on the “Repeal and Replace” agenda regarding the Affordable Care Act, if it is repealed and replaced this could be huge (YUUUGE), and even detrimental for and to your 340B program in one, two, or both ways. When the ACA was signed into place in 2010 (yeah, it’s been that long ago!), it expanded the types of sites that could be considered “covered entities” such as children’s hospitals, free-standing cancer hospitals, rural referral centers, critical access hospitals, and sole community hospitals. My guess is that more than a few of you fall into one of these types of covered entities whose 340B programs could go out the window faster than Trump can say, “you’re fired.” (Remember when he was just a fun celebrity personality with a catch phrase?!)

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Contract Pharmacy – Is it a Risk You Are Willing To Take?

When you think of compliance pitfalls in the 340B Program, contract pharmacy immediately comes to mind. Contract pharmacy is one of the highest compliance risk areas of the 340B program; however, the reward of better serving our vulnerable and underserved patients to many is well worth the risk. Contract pharmacies have allowed covered entities to expand their reach to the most vulnerable of patients. Through 340B savings, many covered entities have provided: access to medications, support for non-covered procedures; improved healthcare and education; and support and resources for patient care. In many cases, these most vulnerable patients would have otherwise fallen through the cracks of our sometimes-flawed healthcare system. So how does the covered entity handle the complexities of the contract pharmacy arrangements?

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A Review of Expectations to Prevent Duplicate Discount

Carve-In Medicaid Entities:

At a minimum, list the NPI of the entity for each registered site on the HRSA database and subsequently the Medicaid exclusion file (MEF).  Covered entities (CEs) with multiple child sites will need to confirm the NPI number used for billing at each site as it might be different than the parent NPI.  In addition, Medicaid provider numbers (MPNs) for each site should also be listed, as suggested by a recent 340B Health Webinar on HRSA audit findings.  It is not clearly explained by HRSA if the NPI or MPN is preferred, therefore best practice is to place both numbers on the MEF.  Confirmation that the information is correct on the MEF should be reviewed quarterly and annually during recertification.

During a recent HRSA audit, the auditor asked that for each FFS claim sampled, the CE demonstrate that the NPI placed on the claim/UB04 matched the NPI listed on the database.  The auditor also asked that confirmation of discussion of the carve-in arrangement that occurred with the State DHS office be uploaded as data by the end of the audit.

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340B Update: Omnibus Withdrawal & 340B Coalition Conference

Well, big news out yesterday. As of 1/30/2017, the 340B Omnibus Guidance is officially withdrawn.

Where does that leave us?

Well, that brings be to my second topic, the 340B Winter Coalition Conference. I am in my seat on our airplane to San Francisco. I am excited for this conference, as the legislative sessions will be very hot topics. We, Turnkey, are taking 7 staff to the conference, and have our booth (come visit us at booth 57 if you are attending). In the event you are not attending, we will share some of the follow-up to what the discussion is around the post-Omnibus withdrawal 340B landscape. My personal thought is that HRSA may be waiting for rule making authority to formally write more specific rules and guidance on the 340B program. Especially around the 340B patient definition. Of course, this would require legislation, which is why I am excited to hear from 340B Health about all the bills in the senate and house. We also have to worry about the current ACA repeal potential and how that might affect our ACA covered entities (i.e., CAH, RRC, SCH, and CAN). Stay tuned my friends!

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Are you ready for a mock audit with Turnkey?

For those who have had an audit from Turnkey, you already know how important it is to have a strategy in place for every drug in every location that ensures 340B compliance. At the very least, this should include ensuring that patient-specific and drug-specific auditable records are maintained and available, that 340B drugs are only qualified for 340B eligible patients, and that duplicate discount violations are prevented.

Furthermore, if you are a disproportionate share hospital (DSH), children’s hospital, or freestanding cancer hospital subject to the GPO prohibition (GPO affected entity), you’d better also have a strategy in place for every such drug and location that ensures against possible GPO prohibition violations.

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Split billing company, suggestion on Medicaid Claims for Contract Pharmacy? Consider this

When your split billing company suggests it is Ok to include Managed Care Medicaid claims for contract pharmacy, please consider the following:

Allowing managed (MCO) Medicaid 340B accumulations, for contract pharmacy, is not worth the risk because at the end of the day it would likely be the covered entity that would have to work out the impact with the manufacturer (and potentially HRSA if it were Material).

Apexus sticks to its advice that,

340B drugs should not be used in a contract pharmacy situation for Medicaid patients unless there is an arrangement to prevent duplicate discounts that has been reported to HRSA in collaboration with the state Medicaid agency” – note they do not make special exception or have different advice for MCO claims.

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Is it a 340B Drug?

Covered entities are often faced with trying to decide whether or not a particular product is a 340B drug for which PHS/340B pricing benefits and regulations apply. Sometimes this can be confusing and tedious. 340B Drug Pricing Program under section 340B of the Public Health Services Act (PHS) only applies to covered outpatient drugs (CODs), as defined under section 1927(k) of the Social Security Act (SSA). Also, the product’s manufacturer must have entered into a pharmaceutical pricing agreement (PPA) with Health and Human Services (HHS) (i.e., with the Secretary of HHS) for the labeler code that applies to the product’s NDC. The labeler code is represented by the first 5 digits of the product’s NDC.

While reaching out to the manufacturer is generally the recommended process for determining whether a product is a 340B drug, there are some initial steps that can be taken to either eliminate having to do this, or at least to facilitate and expedite the process:

  • Step 1: Confirm the product is a COD under section 1927(k) of the Social Security Act (SSA). HRSA has general summarized the following outpatient drugs as being included as CODs under the 340B Program:
    • FDA-approved prescription drugs;
    • Over-the-counter (OTC) drugs written on a prescription;
    • Biological products that can be dispensed only by a prescription (other than vaccines); or
    • FDA-approved insulins
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340B Updates- Happy Thanksgiving!

We often have our name mistaken for Turkey (instead of Turnkey), and during this time of the year, we totally embrace it! Happy Thanksgiving!!!

-The Turnkey Pharmacy Solutions Team

Well, it has been awhile since you have heard from me. Some nice posts by Jen Cook and Jennifer Hagen since my last one. Speaking of which, Turnkey is super excited to have Jennifer Hagen on the Turnkey team. She became full-time with us in October. She just stepped down from her post as the ambulatory service pharmacy director for a large DSH hospital. She has experience as a 340B faculty member and with peer-to-peer. I must admit, she is starting to make me look bad!

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Change of Entity Type from Rural Hospital to DSH

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Does your hospital qualify as more than one type of 340B entity?  Is your hospital a Sole Community or Rural Referral Hospital with a DSH percentage that has risen above 11.75%?

Making the change is not as scary as you think and the possibility of additional savings to help your hospital’s indigent is well worth it.

Here are a few things to consider and an account of my experience of changing entity type from SCH to DSH:

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What does the final CMS rule implementing the site neutrality provision mean to 340B Hospitals?

As summarized by 340B Health, the final CMS rule will not impact enrollment of new Off-campus clinics in 340B in 2017, but could leave the door open to possible changes in the future.

It appears that CMS’ rule will not prevent hospitals from enrolling new off-campus provider based departments (PBDs) as 340B child sites in 2017. However, CMS plans to reevaluate its policy for future years, and changes could impact 340B.

340B Health submitted comments to CMS in response to the original proposed rule requesting that whatever payment system CMS adopted, hospitals be allowed to report costs and charges for new off-campus PBDs on reimbursable lines of the cost report. In response to criticism about its proposed payment policy, CMS is adopting a significantly different payment system for new off-campus PBDs than the one it proposed. Because the revised policy is so different than the proposal, CMS issued an interim final rule effective Jan. 1, 2017 and is accepting comments until Dec. 31, 2016. Under the interim final rule, hospitals will bill Medicare for services provided in new off-campus PBDs on the institutional claim form using a new modifier to identify the services. Medicare will pay hospitals for those services under new, reduced rates (generally, 50 percent of the OPPS rate) that will apply specifically to new off-campus PBDs.

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