340B Summer ’17 Coalition Meeting

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340B Summer ’17 Coalition Meeting

We had a great time in DC for the 340B Coalition Meeting. Thank you to everyone who stopped by the booth to say hello, or to learn more about our services. We thought the conference did well with keeping the 340B community updated on what is potentially coming with 340B changes, of course, it is still speculation in most cases. Rich Bucher and Rob Nahoopii will try to hit the highlights below.
Ted Slafsky, President and CEO of 340B Health, spoke about the state of 340B, and looking back and moving forward. Ted noted recent scrutiny of disproportionate share hospitals (DSHs) and pointed out that while 36% of this nation’s hospitals are DSHs, they provide close to 60% of this nation’s uncompensated care. He also pointed out that many rural hospitals would most likely have to shut their doors if not for the 340B program. For perspective, it was also noted that manufacturers spend four times as much on advertising as they do on the 340B program.
John Costner with CMS provided some good background on some of the changes they have introduced. He stated that the goal of the covered outpatient drug rule was to move states to AAC, at the time of the conference, 32 states had made the move. In addition, the MCO Medicaid rule also went into effect in July 2017, which requires that MCO contracts with state Medicaid requires a provision on how they prevent duplicate discounts. He also mentioned that generic drugs will be included in the drug pricing penalty. What was not discussed, but came out the day after the conference is the reduction in OPPS payment for administered drugs, this is a tough one. As a reminder, the deadline for comments is September 11th, and the general summary is that Medicare wants to reduce payment to ASP -22.5% (from ASP +6%), a total 28.5% reduction.
Leana Wen, keynote speaker, was fantastic. She discussed a concept I want to share: “In Healthcare we talk about choice; however, choice is predicated on privilege. Thus, the opposite of poverty is health.” I agree, when money is tight, sometimes the McDonald’s dollar menu or the $0.17 Top-Ramen is all you can afford. I remember a patient at my hospital who was about to take out a second mortgage on her house to pay her co-pays, she was retired and running out of options. 340B allowed her to afford her drugs without taking out a second mortgage, and hopefully it also allowed her to buy healthier food. When you are trying to make $100 stretch for 2-weeks of food for you and your children, fresh fruit and veggies often do not fit into the budget, nor green smoothies or acai bowls for that matter.
The legislative update was good, but unfortunately outdated at this point. We know the Energy & Commerce subcommittee met shortly after the conference and in general there was some strong support for the 340B program. As mentioned before, we all need to stay active with our Senate and House representatives, and communicate the importance of the 340B program.
Katheryne Richardson from Apexus focused on the theme of transparency and shared some updates from Apexus. They are on version 10 of the self-disclosure tool, so make sure you download the recent version if you ever need it. They are working on a Medicaid database, and currently have good information on 39 states. Katheryne also summarized Apexus’s role with a reminder that in addition to supporting 340B covered entities and manufacturers, the prime vendor also supports distributors as well by ensuring authorized distributor contracts are available for all 340B covered entity types, structuring compliant purchase account set-up, and partnering with authorized distributors to ensure accurate pricing and facilitate credits and returns. Finally, when asked about documenting the use of 340B drugs, she emphasized the importance of being able to show documentation for each drug returned, administered, or destroyed.
Captain Pedley from HRSA/OPA also provided an update. One major item we want to share is that hospital recertification will occur in October, due to a database/user interface upgrade occurring as of 8/15 through September. The new system will eventually have 340B pricing (but will be for AO and PCs and have 2-factor authentication). For 340B audits, HRSA has conducted 805 audits since 2012 and is still planning on 200 for FY2017. Captain Pedley emphasized that audit selection is based on risk assessment and consistent with the theme of transparency and noted that HRSA continues to post HRSA audit findings to provide a resource for covered entities review and learn from. She also provided a reminder that good faith inquiries by manufacturers are not audits but often are rather attempts to resolve any confusion and confirm compliance, and that these efforts are really working.
George Sigounas, the HRSA administrator. The major takeaway from his presentation was that he would like to see more program integrity and transparency. He specifically mentioned that he would like to see how covered entities are using their savings. He also acknowledged that the operation of the 340B program is a priority and that Congress is aware of its importance.
Those are some of the key highlights. The next conference will be in February 2018 in San Diego, and we strongly encourage each covered entity to have a staff member there. We will be there of course.

About Author

Rich Bucher, JD, RPh, 340B ACE

Pharmacist with experience in pharmacy leadership, compliance, and contracting for a large healthcare organization and for a large regional health plan. This includes practical experience dealing with operational, compliance, and legal issues associated with managing a system-wide 340B Program. Also, over 10 years of legal practice experience, including in health care law and contracting. Rich has presented on 340B and other health care compliance topics at numerous conferences. Rich has conducted many external 340B audits and provided consultation for various covered entity types, including providing onsite support during HRSA audits. Rich is a lead auditor on our 340B independent auditing team, oversees legal and compliance issues, and provides client contract and policy/procedure reviews.

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