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

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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 As of 1/30/2017, the 340B Omnibus Guidance is officially withdrawn.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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It Doesn’t Get Better than this, 340B fans!

The 340B Coalition.  The super bowl of 340B events.  All the 340B all-stars in one place at one time.  The energy is palpable and the excitement is giddy.  I expected to see Maureen Testoni do her touchdown dance at any moment and I awaited with baited breath.
This coalition was no exception and the topics were spot on in regards to several of the issues we see with our clients.  HRSA audits and Medicaid were the half time show and they did not disappoint.  Commentary provided by 340B Health and Apexus kept us all apprised of what is happening in the 340B arena.  If you were not able to make the show I will recap the highlights.  So now you can be a 340B fan, and WOW at the watercooler on Monday morning.
The first play began with Captain Krista Pedley of Office of Pharmacy Affairs (OPA).  She spent a conscious effort moving up the line by discussing HRSA audits.  The surprise to fans came when she informed us that the audit process will be moved to the OPA.  The OPA office will now be fulfilling the audit role.  She made certain to reiterate that this will not change the audit process nor will it affect the covered entities in any way.  The audit process will continue the same as always.  She also reminded fans that manufacturers can limit drugs provided to the 340B program as well as limit distribution in specialty items.  However, with communication to manufacturers and including HRSA in any challenges the covered entity encounter, HRSA can help resolve the ‘roughing the passer’ call.
Recertification was the second play.  Covered entities must be registered in the 340B program in order to participate.  A ‘time out’ from HRSA was the reminder to ensure everything is compliant within your entity.  Material breach was also discussed and should be disclosed to HRSA based on entity policy and procedure.  Manufacturers also need to be informed of material breach and communication initiated.
Orphan drugs finished up the third play with a touchdown!  Captain Pedley reminded the ‘water boy’ (which includes everyone that can’t purchase Orphan drugs) that you are free to purchase Orphan drugs outside of the 340B plan and encouraged you to find these drugs at other discounted prices.  In the words of Bobby Boucher “Now that’s what I call high quality H2O.”
QB Chris Hatwig stepped on the field to introduce Apexus’ 340B Operations Certificate Program.  This is where I pulled out my hot pink No. 1 foam finger.  The Operations certificate is beneficial for any individual who would like to pursue specialized training in 340B knowledge.  This is not a free program, but offered at a discounted rate for individuals in a 340B covered entity.
Chris also introduced a new service provided by Apexus that will help covered entities find orphan drug contracting.  Apexus will also incentivize manufacturers by waiving their fees if they offer orphan drugs at a discount.
A major ‘foul’ was called by Apexus to some manufacturers who are sending “inquiries” to covered entities that imply they are working with HRSA.  These “inquiries” have been sent to HRSA and they are false.  Manufacturers will not be sending communication to covered entities on behalf of HRSA. First step if you receive one of these is communication.  Contact the manufacturer immediately and if needed, contact HRSA.
Lastly, Medicaid, the ‘goodyear blimp’ that hovers over the 340B playfield. They reminded covered entities that duplicate discounts, fee-for-service, and managed care are all resources involved with Medicaid.  It is up to the covered entities to make sure they are correctly billing Medicaid.  Medicaid will not take the ‘ignorant’ plea.  The covered entity needs to know what their state is billing and what constitutes a duplicate discount.
Touchdown!!  Apexus is working on a master database that will include Medicaid policies for reimbursement from all states for duplicate discount prevention. The fans go wild!!!
340B fans, I cannot believe it, I cannot believe it, this will go down as the best 340B coalition in history.  This wraps up the highlights from day 1- Live from Washington DC.  Goodnight.
– Jenn Cook