HIN What?

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HIN What?

Many of you have been following and evaluating your options as multiple manufacturers have restricted contract pharmacy pricing for CEs.  You probably also received our email communication in February describing a few exception opportunities that exist for AstraZeneca, Eli Lilly, Novo Nordisk, and Sanofi, if you do not have an inhouse pharmacy.  If you did not receive that communication, please reach out to one of our team members and we can get you that communication.  To take advantage of a few of these exceptions, you must be familiar with a Health Industry Number (HIN).  This blog is meant to provide some insight into this number and how it is important to CEs trying to get 340B pricing.

What is a HIN?  According to HIBCC, a “HIN is a unique and standardized identifier that enumerates hospitals, providers, suppliers, and all other partners doing business in the supply chain.” 

Who assigns a HIN? They are assigned through the Health Industry Business Communications Council (HIBCC).  https://www.hibcc.org/about-hibcc/

Where can I learn more about HINs and 340B? Apexus has a great video highlighting what a HIN is and why it is important in 340B? https://vimeo.com/393312657

I don’t have time for an 8-minute video, can you summarize?  HINs correspond to the location where a hospital has drugs delivered.  Therefore, a contract pharmacy account that gets drugs shipped to a pharmacy offsite from a hospital will have a different HIN.  A hospital HIN will have different suffixes depending on various factors. 

Surely someone, somewhere already has a HIN established, right? This could be the case.  However, more than likely, the HIN that is established is for your normal hospital drug purchasing accounts.  There may have never been a reason for a contract pharmacy to have a HIN associated with your hospital.  Thus, you more than likely may need to apply for a new HIN.

Where do I go to get a HIN? For a $100, you can go here and get a HIN specifically for your hospital and contract pharmacy. https://www.hibcc.org/hin-system/apply-for-a-hin/ 

Wait, I need more than one HIN? Maybe.  You will need a HIN for each contract pharmacy you intend to use to establish a 340B pricing with the 4 manufacturers above.  If you are going to ship these drugs to multiple “ship to” addresses, you will need more than one HIN.

I just paid for a HIN, now what? HIBCC advertises it can take up to 5 business days to receive your HIN and our experience is that they are pretty good about exceeding that expectation.  Once you have your HIN, you need to use it in multiple ways.

AstraZeneca and Novo Nordisk: You will need the HIN to fill out their form to get access to 340B pricing for one contract pharmacy location.

Sanofi: You will need to sign up at www.340besp.com. Note: you do not have to submit data to sign up one contract pharmacy.  When following the prompts for Sanofi, you will need to select the contract pharmacy location you want to be eligible.  Most likely it will not have your new HIN. In that case, you need to submit the following information to: support@340besp.com and include this information:

  1. Their 340B ESP ID #
  2. Their designated pharmacy name
  3. Pharmacy address (actual physical location)
  4. Their Health Industry Number “HIN”

Now what? Once you have a HIN established and you have submitted the appropriate form to one of the manufacturers listed above, you will need to follow any subsequent questions they may have.  Once approved, you should validate that you have 340B pricing for that specific location and wholesaler account.  You do need to renew your HIN annually for $50. 

As always, don’t hesitate to reach out to myself or one of our all-star 340B experts.


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340B and Fee-For-Service Medicaid AAC Requirements

A topic we have covered in our client newsletter in the past, but is long overdue for a full discussion is 340B actual acquisition cost (AAC) requirements for fee-for-service (FFS) Medicaid billing in many states. In 340B audits we perform for clients, we review the AAC requirement and note if there is any risk. However, it is not something specifically looked at by HRSA, since the covered entity (CE) billing AAC does not impact if a Duplicate Discount occurred. To be clear, we are not talking about Duplicate Discount risk here, we are just talking about whether a CE billed an FFS Medicaid plan correctly.

You may be thinking, “if it is not a significant HRSA audit risk, then what is the big deal?” The short answer, is, Government Dollars. We don’t talk about it much, but the 340B program savings isn’t government dollars, it’s manufacturer discounts. Therefore, the legal and financial risks are smaller. When it comes to government dollars, there is the potential for a financial penalty and even legal penalties. Inappropriate billing of Medicaid and Medicare can raise Fraud, Waste, and Abuse concerns. Although this normally refers to egregious acts of commission, such as billing for services you did not actually provide, it is possible that accidental over billing could be considered a form of abuse. Typical fines are 1.5 times the issue/amount in question (e.g., overbilling in the case of charging incorrectly).

Back to 340B, we now have this interesting intersection of 340B and government dollars. This occurs when an FFS Medicaid plan requires a CE to bill at AAC. Many state’s FFS Medicaid plans require this today, and one of the more engaged (that is about the most positive term I can use) states is California. In the past year, California has been sending out self-audit letters for CEs to self-audit their AAC billing. This occurs primarily with the retail side of 340B; however, they have also sent self-audit letters to CEs for hospitals/clinic administered drugs. So far, we have not heard of penalties on top of the payback request, but it is possible. The time period they are using is December 2016 to current. California is using December 2016 because that is when the federal court’s temporary ban on the California AAC law was lifted. If you are in California, we strongly encourage you to plan on receiving a letter at some point in the near future.

Although most of the AAC enforcement is in California, it is likely that states are seeing what California is doing, and noting the positive financial result. As such, more states might try to enforce AAC billing as well. Your assignment for the month is to check your state requirements and confirm you are billing correctly, and remember to check any other states you bill. Don’t just check to make sure you are billing the right dollar amount, also make sure you are billing with the correct NPI or Medicaid provider numbers, and modifiers if needed. If you are a Turnkey (SpendMend) client, ask us for help on identifying your state’s requirements if needed.      


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Recent HRSA Audit Trends: Supporting Documentation for Eligible Providers

Historically, HRSA auditors have requested a list of eligible providers from covered entities during HRSA audits. Recently, however, HRSA auditors have been requesting that covered entities upload documents demonstrating that, for each audited utilization record, the prescriber was (at the time the medication was administered or prescription written) employed by, under contract with, or had some other type of arrangement/relationship with the hospital such that responsibility for the clinical care provided to the patient remained with the covered entity. HRSA FAQ 1442 further explains that non-covered entity providers solely with admitting privileges at a covered entity hospital are insufficient to demonstrate that any person treated by that provider is a patient of the covered entity, for 340B Program purposes.

We often hear; the provider is credentialed or has privileges, but what does that really mean? Credentialing is the process of obtaining, verifying, and assessing the qualification of a provider to provide care or services for a health care organization. Credentialing documents include evidence of licensure, education, training, and experience. A privilege is defined as an advantage, right, or benefit that is not available to everyone. For providers, the act of being privileged is the process whereby a specific scope and clinical service of patient care is authorized for a healthcare practitioner by a health care organization, based on evaluation of the individual’s credentials and performance.

Back to the question at hand, what have HRSA auditors been requesting to demonstrate provider eligibility? The answer may depend on the type of provider.

Employed or Contracted Providers – Hospital or Clinic Administered and Retail Prescriptions

  • If the provider is employed by the covered entity, an auditor would expect to see confirmation of employment of the provider by the covered entity. This could be the cover or signed page of a provider contract, a checklist of privileges granted to the provider, a screenshot of the internal Medical Staffing Office platform, or other such document.
  • For residents (often an area of challenge for entities and focus for auditors), requested documentation may include a signed contract between the covered entity and the resident, or with a college/educational institution that allows residents to practice at the covered entity and is accompanied by a list of past and current residents. 
  • For health care providers who may not be directly employed with the hospital to provide services, an auditor may expect to see a signed collaborative practice agreement to provide services to patients whereby the care of the patient remains with the hospital. For contracted services, such as for the emergency department, a HRSA auditor may request a signed document with the contracted entity to provide services and a list of providers that fall under the contracted services agreement.
  • For providers with “privileges,” HRSA will expect to see a signed agreement that shows the scope of privileges and preferably documentation or confirmation from the covered entity that the responsibility for care of the patient remains with the covered entity and the providers privileges are not merely admitting privileges.

For each of these supporting documents, auditors have requested that they indicate start dates and, when possible or appropriate, duration of the agreement or granted privileges. Eligible provider lists are also requested to indicate start and term dates for providers.

Healthcare Professionals – Hospital and Clinic Administered Drugs

While supporting documentation to demonstrate responsibility of care may seem more straight forward for providers employed by or contracted with the covered entity, it can leave a bit of gray area for orders written by outside providers. For hospital or clinic administered drugs that are administered as a result of an order from an outside provider, most often observed in the infusion setting, many entities qualify drugs as 340B eligible under their healthcare professional definition. In doing so, they assert their responsibility of care through patient assessment and care related to the administration delivered by members of the entity healthcare team, such as nurses. As HRSA auditors have become more familiar with this practice, they have begun requesting documentation in the medical record to substantiate care beyond the simple administration of the drug, such  as vital signs or clinic notes stating the patient was evaluated for appropriateness of receiving the drug and that it was well tolerated (or that the patient had a reaction and was treated accordingly). In these instances, HRSA auditors have further validated the inclusion of this definition in the entity’s policy and requested documentation that the healthcare professional providing patient care is employed by the entity and was working that day. This may include a contract, privileging documentation, and/or a timecard.

Referrals – Retail Prescriptions

In scenarios in which covered entities have captured retail prescriptions as a result of a referral arrangement, HRSA auditors have requested copies or screen shots of the referrals in the course of the audit and for them to be uploaded to the NIH portal subsequent to the audit. While obtaining documentation back from the referral provider remains a best practice to demonstrate continued responsibility of care, this has not been requested in recent audits, and documentation of the medication in the patient’s medication list with the covered entity has been sufficient.

Preparing for HRSA Audit Success

The key to supporting documents is that they demonstrate that care for the patient by the provider remains with the covered entity at the time the medication was administered, or the prescription was written. Covered entities should consider all aspects of patient definition to use 340B drugs. It is also important to include entity management of provider privileges in policies and procedures.

Unfortunately, these documents are not always found in one location, with one person, or even within the same department. Start checking for these documents during your monthly self-audits, understand each provider type and the documents needed, and lastly, know who would be your point person for each type of provider to obtain the necessary documents and establish a working relationship with them so that you’re both prepared when your number is up for a HRSA audit.

Article written in collaboration with Chelsea Magee, Turnkey Pharmacy Lead Auditor.


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CMS Most Favored Nation Drug Payment Model – What You Need to Know

The end of 2020 is upon us, for better or worse, and the healthcare industry as a whole is envisioning a brighter 2021 ahead of us, especially with the availability of two new COVID-19 vaccines that could signal an end to the pandemic.  But we want to make sure our hospital 340B covered entities are aware of another important change, beginning with the new year – the CMS Most Favored Nation drug payment model, which was published as an interim final rule on November 27th. It has taken some time to fully understand its impact, below is what we believe you need to know…

What is it? 

The MFN model is a revised Medicare Part B reimbursement methodology for certain high-cost drugs that will reduce payments to most hospitals and physician offices. 

When does it go in effect?

The first wave of changes was initially scheduled to go into effect on January 1, 2021.  However, on December 23rd, the U.S. District Court for the District of Maryland issued a temporary restraining order, delaying implementation for 14 days, i.e. January 6, 2021.  Additional elements of the MFN model will be phased in over the next 7 years.  There has been a fair amount of speculation that this rule will be suspended or eliminated altogether by the incoming Biden Administration, and a number of legal challenges to the rule have been initiated, but for now, hospitals will need to plan on executing operational changes to comply with the rule on January 6.

Which 340B hospitals will be impacted?

The MFN model is mandatory for disproportionate share hospitals (DSHs), rural referral centers (RRCs) and sole community hospitals (SCHs).   Critical access hospitals (CAHs), PPS-exempt cancer hospitals and free-standing children’s hospitals are excluded, and should not be impacted, at least for now.

What drugs are included?

The MFN model identifies 50 high-cost drugs and biologicals (including some biosimilars), outlined in Table 2 of the rule.  The list primarily consists of specialty injection drugs and other agents commonly administered in infusion centers.  Keep in mind that the list is fluid, as CMS intends to add and remove drugs on an annual basis, selecting the “top 50” drugs by total allowed drug charges from the prior year’s Medicare Part B claims.  Also, some drug categories are presently excluded from the MFN model, including oral drugs, intravenous immune globulin products and medications with an Emergency Use Authorization or FDA-approval for treatment of COVID-19, among others.  CMS is gathering feedback on whether other categories, like blood products and gene/cell therapies should be included or excluded from the model.

How is reimbursement defined in this new model?

The MFN drug payment amount will be calculated using a phased-in formula based on a ratio the “MFN price” and the manufacturer’s reported average sales price (ASP), along with a per-dose add on payment. 

  • The “MFN price” will be determined by the lowest adjusted international price for the drug (more specific details on the price definition can be found in section III.E of the rule). 
  • The add-on payment for Q1 2021 is $148.73 per dose of qualifying MFN drug. 
  • Importation Action!  Note that you must bill for the add-on payment separately on the claim form by using a new HCPCS code – M1145, and setting the “units” for this line to equal the number of MFN drug doses administered for the encounter (more specific details on the claims processing of the MFN model can be found in section III.G of the rule).

What will this mean to my reimbursement in 2021 and beyond?

It depends on your covered entity type.  In 2021, DSH, RRC and non-rural SCH covered entities will see reimbursement similar to their current ASP – 22.5%, and in fact, may see slightly higher revenue for these drugs due to the add-on payment.  However, MFN model drugs that have pass-through status will generate lower reimbursement this coming year.  Rural SCH covered entities unfortunately will see a decrease in revenue (340B Health has estimated up to a 16% reduction on the MFN model drugs), as they move away from a rate of ASP +6% to the MFN model. 

After 2021, the ratio of the MFN drug payment amount leans more to the MFN price and away from the ASP price, so reimbursement for all participating providers is going to be decreased, despite the continuation of add-on payments and inflation adjustments.  HHS has provided estimates on payment reductions ranging from up to 3% to as high as 60% once the MFN model is fully implemented.

Is this thing going to stick?

Many experts in health policy are saying probably not, but we’re not sure.  Many are anticipating that the incoming Biden Administration will thoroughly scrutinize, modify or even altogether abandon the rule, and there is an open comment period through January 26, 2021, for stakeholders to submit feedback on the rule.  Numerous organizations, representing both providers as well as pharmaceutical manufacturers, have expressed opposition to the model, and lawsuits have already been filed to halt implementation. However, barring any type of success in delaying or enjoining the rule here in tail end of December, providers should be prepared for the MFN model to begin January 6.

What should I do right now to prepare?

            A few things:

  1. Communicate – Talk with your billing/revenue cycle departments to make sure they are aware of the need to update their claims processing procedures for the MFN model beginning January 6, 2021.
  2. Analyze – Work with your finance teams to analyze the budget impact this could yield for your organization in 2021.  Remember that DSH, RRC and non-rural SCH covered entities will probably not see a negative impact next year (except for those pass-through drugs), but rural SCH entities will see a dip in reimbursement.
  3. Comment – Consider submitting comments to CMS on the rule.  340B Health members should be on the lookout for a template to submit comments soon. 

As always, reach out to us if you have any questions about the MFN model, we are always glad to help our clients navigate complicate changes to their 340B programs!


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Don’t Miss Out On These Resources

The 340B Program is complicated. It’s intimidating, and let’s be honest, at times downright confusing, for newcomers and veterans alike. Those of us in the 340B world know that managing a successful 340B Program requires the juggling of what feels like a million things at once. Between keeping up with state Medicaid requirements, HRSA audit preparation, multiple third-party administrators, NDC crosswalks and formularies, OPAIS registrations, and beyond, it is easy to feel overwhelmed. 

That’s why we at Turnkey are committed to trying our very best to make your lives just a tiny bit easier. Today, we’re doing that by providing a list of some of the best resources in the industry (besides us of course). We encourage you to take advantage of all of these wonderful resources so that you can take your 340B Program to the next level. 

  1. HRSA (free):
    1. 340B Drug Pricing Program
    2. HRSA Program Integrity Page (aka audit results)
  2. Apexus:
    1. Free Resources:
      • 340B University on Demand”: 340B modules which are recommended for staff working closely with the 340B Program.
      • Apexus Universities (live and virtual sessions) focused on hot topics and 340B basics.
      • Apexus Answers: Email, Phone, or Chat with an Apexus staff member about any 340B questions you have.
      • HRSA FAQs, published by Apexus.
    2. Paid Resources:
  3. NACHC (for grantees):
    1. Free Resources:
      • NACHC 340B Website and Office Hours: Grantee related news and resources can be found on the NACHC website. Office hours occur on the 3rd Thursday of the month, covering hot topics with Q&A and expert speakers.
      • Noddlepod: A forum exclusively for covered entities. A great way to keep a pulse on the 340B Program and share with peers. Noddlepod can be accessed by emailing Colleen Meiman.
    2. Paid Resources:
      1. National Association of Community Health Centers (NACHC) released an updated edition (2018) of their 340B Manual for FQHCs
  4. 340B Health (for hospitals):
    1. Free Resources:
      • 340B Exchange: A forum for covered entities to discuss hot topics, get feedback from peers, and keep up to date with industry developments.
  5. 340B Report: Resource for breaking news about 340B. Previously free, will be subscription based starting in 2021.  
  6. 340B Coalition:
    • 340B Coalition Conference (paid): There is a 340B Coalition in the winter (San Diego) and summer (Washington D.C.). These conferences are great places to network with peers, meet various vendors in the 340B industry, stay up to date with industry developments, and attend exclusive entity specific breakout sessions.

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Only Time Will Tell: Future Changes to the Affordable Care Act

In 2010, the Affordable Care Act (ACA) was signed into law, changing the approach to healthcare in the United States. These changes had far reaching impacts but for today, we’re going to focus on the implications the ACA had on 340B and what the potential changes to the ACA could mean for the future of the program.

The implementation of the ACA in 2010 expanded 340B to additional categories of hospitals and added in a variety of additional compliance restrictions and oversight elements. These include:

  • Expanded 340B eligibility to additional categories of hospitals.
    • Children’s hospitals (DSH >11.75%, ACA clarified eligibility)
    • Freestanding cancer hospitals – CAN (DSH >11.75%)
    • Sole community hospitals – SCH (DSH >8%)
    • Rural referral centers – RRC (DSH >8%)
    • Critical access hospitals – CAH (No DSH requirement)
  • Added the Orphan drug exclusion for RRC, CAH, SCH, and CAN hospitals.
  • Required HHS to develop a methodology for the calculation of the 340B ceiling price.
  • Authorized HHS to make 340B ceiling price data available to covered entities through a secure website.
  • Required the creation of a formal 340B program Administrative Dispute Resolution (ADR) processes by HRSA.
  • Mandated HRSA develop a structure for imposing a Civil Monetary Penalty (CMP) on manufacturers that knowingly and intentionally overcharge a covered entity for 340B drugs.
  • Expanded the Medicaid Drug Rebate Program to include Managed Care drugs but excluded 340B drugs from the expansion.
  • Required HRSA to extend 340B recertification to all types of covered entities.

Unrelated to the changes the ACA brought about to the 340B program, there have been a number of legislative developments and challenges to the legality of the ACA. In December 2017, President Trump signed into law a tax bill that eliminated the ACA’s penalty on individuals who lack health coverage. Subsequently, Texas’ attorneys general filed a lawsuit arguing that the ACA statute, or at least the parts of the act closely linked to the individual mandate, were no longer valid. This escalated in December 2018, when a Texas district court struck down the ACA, but stayed its ruling pending appeal, concluding that the individual mandate is so connected to the law that Congress would not have passed the ACA without it. On appeal (Texas v. United States), the 5th U.S. Circuit Court of Appeals deemed that the individual mandate was unconstitutional. The panel instructed the district court to rehear the matter and “to employ a finer-toothed comb on remand and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the mandate.” In March 2019, the Supreme Court announced it would hear the case in its term beginning in the fall of 2020, blocking the lower courts from taking further action. The Supreme Court case, Texas v. California, began November 10th, 2020, with a ruling expected by June 2021.

While the concerns raised have little to do with the 340B Program itself, the outcome of the Supreme Court’s proceedings could have significant implications for the Program. Since none of us have a crystal ball, there is little use in trying to guess what the future may bring. With that said, it is prudent to understand the possible outcomes and what they may mean for the 340B program. Simplified, there are three main components of the ongoing litigation, all carrying varied implications for the 340B program.

  1. The Supreme Court could dismiss the case on technical grounds, leaving the statute in place. The court could decide, for instance, that Texas and the individual plaintiffs lacked standing to bring the lawsuit. This would leave the 340B Program hospital expansion and oversight additions from 2010 in place.
    • Previously, the district court had concluded that individual plaintiffs have standing to challenge the mandate and the Fifth Circuit concluded that the states have standing to sue.
    • A substantial portion of initial oral arguments surrounded this topic as a result of the perceived insufficient attention to this issue in the lower courts.
    • Oral arguments did not clearly demonstrate the views of each Justice around standing, but significant focus was placed on the lack of penalty for non-compliance and the lack of transparency around alleged injuries.
      • One of the arguments is related to harm imposed by other facets of the ACA and the assertion that these provisions are inseverable from the individual mandate, thus tying the reported harm to the individual mandate. During oral arguments, most Justices expressed skepticism around this theory.
  2. The Supreme Court could deem the individual mandate unconstitutional.
    • Oral arguments did not clearly demonstrate the views of each Justice around constitutionality; however, questions were targeted to assess whether the mandate is a choice to purchase health insurance or a legal command (as supported by NFIB) and whether the provision is inoperative.
  3. The Supreme Court could deem the individual mandate as severable from the ACA. This would likely eliminate the verdict on the individual mandate from impacting other provisions of the ACA, including the changes brought to the 340B Program.
    • Precedent directs courts to limit damage to the statute if the individual mandate is concluded to be unconstitutional by “finding the mandate severable from the rest of the ACA, including its guarantees-issue and community-rating provisions.”
    • The Chief Justice and Justice Kavanaugh argued that the ACA’s legislative findings should not be treated as an inseverability clause, based on the absence of the “very clear” inseverability language Congress has included in other statutes.

While the Supreme Court proceedings have only just begun, the initial arguments give us optimism that it is unlikely the ACA will be struck down in its entirety. The individual mandate appears to be the most heavily contested component of the ACA and while initially perceived to be interwoven and an integral component of the ACA, which would prevent its reversal without “throwing out the baby with the bathwater,” so to speak, President Trump’s December 2017 tax bill reversed the teeth of the individual mandate and the ACA as a whole has not crumbled as a result.

Ultimately, the future of the ACA and its impact on the 340B Program cannot be predicted or guessed. With that said, the beginning of what is likely to be a many months’ long adventure leaves room for hope that regardless of the life expectancy of the individual mandate, the 340B Program facets implemented through the ACA will remain intact.


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Working Together – Establishing a 340B Oversight Committee

With so much activity occurring in the 340B space in recent months, including HRSA Frequently Asked Questions (FAQs) related to 340B eligibility, hospital recertification, manufacturer developments around contact pharmacies, and the uncertainty of what lies ahead following the upcoming election, now is as good a time as any to rally your organization’s key 340B stakeholders.  A recognized “best practice” to facilitate interdisciplinary 340B-focused discussion and planning is through a 340B oversight committee.  This month’s blog will highlight important considerations to help ensure your covered entity (CE) has built a dynamic, well-informed team to help navigate the future of your 340B program. 

The most important aspect of a 340B oversight committee is the roster of participants.  It is well understood that 340B programs are incredibly complex, with operations spanning across numerous departments and business units within a single CE, and often across large multi-CE health systems.  Ensuring that the 340B oversight committee is comprised of a diverse group of representatives, each member bringing unique expertise and perspectives, will help to broaden the scope of the committee’s work and make sure that all the important bases are covered.  Below is a list of stakeholders to consider recruiting for your 340B oversight committee:

Hospital/Clinic Administration (“C-Suite”)

Starting with your covered entity’s Authorizing Official (AO) – for most CEs this is the Chief Financial Officer (CFO) –  involvement from executive leaders is crucial to make sure the direction of the 340B program is aligned with organizational goals and objectives.  Also, this provides a regular platform to inform and educate executive leadership on compliance trends, financial performance and resource gaps that may be impacting 340B program success.

Pharmacy

Pharmacy staff often serve as the “workhorse” of a CE’s 340B program, and there are many moving pieces of the pharmacy’s operations that can impact program compliance and performance.  Consider a variety of pharmacy participants, including representation from pharmacy leadership, pharmacy procurement, and pharmacy operations.  Shared representation with the Pharmacy & Therapeutics (P&T) Committee may be of value to determine how hospital formulary decisions may impact 340B, and to facilitate policy/procedure review and approval.  

Finance

In addition to the CFO, key players in evaluating and monitoring for 340B program eligibility exist within the finance department.  Involvement from experts in revenue cycle and accounting is critical, given their familiarity with the Medicare Cost Report (MCR) and Trial Balance, and they can address questions related to Medicaid billing processes to promote Duplicate Discount prevention efforts.  

Compliance & Internal Audit

340B program compliance will be a pillar of the oversight committee’s function, so engaging compliance and internal audit is essential to validate the effectiveness of the CE’s compliance strategy.  These participants can help establish a compliance framework, and provide direction for self-auditing exercises and responses to HRSA audit requests.  They can also provide a conduit to your CE’s legal department, who can help review contracts and other agreements with outside parties.

Government Relations

Include colleagues from your organization that interact with your CE’s congressional delegates.  They can help craft your “340B story” to make sure the legislators who represent your CE in Washington understand the impact that 340B has on your patients and your community.  Additionally, these committee members can keep you apprised of legislative changes, both at the federal and state levels, that may impact your 340B program.    

Information Technology (IT)

With so many aspects of 340B operations reliant on data and software technologies, make sure you include leadership from your IT division.  Compliance risks and audit findings that warrant significant IT resources to mitigate should be shared, so that IT leadership can help allocate their expert work force accordingly.  Also, internal IT experts may be able to assist in responding to HRSA Audit data requests, which often require a substantial effort in response.  

While the above are core representatives to consider in the 340B oversight committee, other departments, based on your organization’s needs and resources, may be worth including.  A CE may benefit from having a Medical Staff Office (MSO) participant on their committee, if assistance is routinely needed to validate provider eligibility.   Another CE may decide to include a representative from nursing leadership, if insufficient documentation of medication administration has been a root cause of diversion risk.  The key is to find a roster of experts that represent the various intersections of each of your CE’s 340B program elements.  

Logistical arrangements for the 340B oversight committee, particularly with regard to meetings, should also be determined.  Executive leadership may have a specific vision for authority and governance of the 340B oversight committee, and the committee should be organized accordingly.  If this committee is new to your organization, consider drafting a “charter” to help clarify the scope and purpose of the committee, and to define a structure for how and when the group is to meet.   Consider adopting a “best practice” of quarterly meetings for your 340B oversight committee so that all members of the team are kept informed of key program changes and 340B developments, and also keep minutes summarizing the outcomes of your discussions.  

Once your oversight committee’s membership is established, the information reviewed, i.e., the agenda for each oversight committee meeting, should be carefully constructed.  Routine updates on compliance efforts, financial performance, and optimization strategies should be provided.  Additionally, these meetings can serve as a valuable opportunity to provide continuing education to your key stakeholders on program requirements and updates on “hot topics” across the national 340B landscape.   An example of a potential 340B oversight committee meeting agenda is provided in Figure 1. 

If your CE has an established 340B oversight committee, take some time to review your membership, and consider whether a key piece of the puzzle might be missing in your conversations around 340B program management.  And if you have not yet put a committee together and need some additional guidance, please don’t hesitate to reach out to the team at Turnkey Pharmacy Solutions with questions.


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HRSA Hospital Recertification

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It’s everyone’s favorite time of the year. No, not college football (still stings to think about that), but HRSA’s annual recertification for hospitals.  This year, HRSA has provided updated registration and recertification requirements. This blog is not intended to cover every aspect of recertification, but a few tips and thoughts as you prepare to get this off your to do list.  Below are some key points to share on the different aspects of recertification.

When:  If you are a hospital 340B covered entity, for 2020 you must recertify between August 17th and September 14th.

Who: Authorizing Officials (AO) can complete in one login session OR the Primary Contact (PC) can do the bulk of the verification with the AO logging in separately and attesting to it. AO’s must complete their attestation by September 14th.

More Info on the basics

What is new:

  • “340B OPAIS will prompt Authorizing Officials and Primary Contacts (AOs and PCs) to upload supporting documentation for the “Hospital Classification” selected at the time of registration of a parent hospital.”
  • The Medicaid billing question is modified as follows: “At this site, will the covered entity bill Medicaid fee-for-service for drugs purchased at 340B prices?” If the 340B covered entity site (340B ID) answers “yes” to this question, the site must also provide each Medicaid state it plans to bill and the billing number(s) it will list on the bill to the state. 
    • See Medicaid section below for more details if you Carve-In

Recertification Guidelines:  The purpose of recertification is to simply validate information in OPAIS.  Thus, you may edit database information and terminate existing child sites/contract pharmacies.  However, you may NOT register new child sites or add contract pharmacies.

Login/Communication: AO’s will get daily reminders to attest the work completed by a PC.  Don’t rely on this email to communicate the AO’s responsibility.  Be sure to communicate with the AO in other means so he/she knows of the needed task.  And most likely, the AO will need to change their password, so be prepared for that very important task (aka. waste of time). 

Documents Needed:

  1. Medicare Cost Report (MCR) signed Worksheet S: filling details
  2. MCR Worksheet E, Part A: DSH percentage
    • Worksheet S-3 for children’s hospitals
  3. MCR Worksheet S-2: hospital type
  4. MCR Worksheet A and C: outpatient facility registration
  5. Employer Identification Number (EIN)
  6. Medicaid Billing Information: NPI and state Medicaid numbers
  7. Government Contract: make sure it is effective

***If MCR data does not match OPAIS/CMS database information, be prepared to submit pdf or excel versions of the above***

Once logged in:

  • Start at the parent and then go through each child site.  This will cascade important information down vs. input at each child site.
  • Government Official: Be prepared to update this information with relevant name, phone, email of key contact. 
  • Hospital Control Type: Compare to status on MCR Worksheet S-2, Line 21
  • Verifying DSH %: MCR Worksheet E, Part A, Line 33 (S-3 for Children’s hospitals)
  • Child Sites: Verify each still exist on MCR with outpatient revenue and expenses
  • Medicaid Information:  This is the largest change from previous years.  HRSA expects that for every state you carve-in, you have that listed separately with your NPI, Medicaid, or both numbers (whichever you actually submit on the bill).  This is for each state. 
    • During recertification, you can complete this section by simply selecting the states for the NPI/Medicaid numbers you already have registered. 
    • However, if you want to get it on the next MEF as HRSA expects, you will need to do this through a change request now, during recertification or prior to September 15th.
    • Important note, your duplicate discount risk may or may not change with this requirement as states will continue with their specific policies.  For example, a state may continue to rely on the CE’s NPI number at the parent level no matter which state it is assigned to in OPAIS.  However, any omissions can be considered a database finding in the future.

***Preventing duplicate discounts is a vital aspect of program integrity and should be assessed comprehensively and separately outside of recertification***

  • Key message here is that HRSA wants you to be transparent on which states you are carving in and what numbers you bill with: NPI, Medicaid, or both.

Other Random Points:

  • Make sure you actually hit SUBMIT at the end of recertification!!
  • Pay attention to pop-ups. They are not annoying alerts, but have impactful messaging.
  • Don’t help your PC/AO over Zoom video.  It will make them uncomfortable when they search for their password and type it in wrong a few times.

As always, we are your partner and can answer any specific questions you may have!


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When Does 340B Eligibility Begin for FQHCs?

As the second largest covered entity (CE) type after hospitals, Federally Qualified Health Center (FQHC) specific 340B information and application can often lag behind. Within the last few years, Apexus begun offering 340B University OnDemand  for FQHCs, as well as periodically offering 340B University Live for FQHCs only, in conjunction National Association Community Health Center (NACHC) conferences. NACHC too provides some great resources on the program including the NACHC 340B Manual for Health Centers (2nd Edition, March 2018) and Noddlepod – Pharmacy Access for Health Centers a listserv based “peer group for sharing information and resources related to 340B and other pharmacy issues impacting health centers and their patients.” All FQHCs are welcome to join Noddlepod, even if you are not a member of NACHC and it is a great place to learn from peers. You will even see me periodically posting content there!

If you are a member of the Health Center 340B community, you may or not have noticed the flurry of communications and excitement last month as HRSA’s Office of Pharmacy Affairs (OPA) and Apexus released a variety of Frequently Asked Questions (FAQ) relating to when 340B eligibility begins for new services and offsite locations of hospital Covered Entities. The FAQs clarified that so long as policies and procedures support the practice and patient eligibility requirements are met, hospitals may consider the new service or location 340B eligible prior to its registration becoming active on the Office of Pharmacy Affairs Information System (OPAIS). Prior to this clarification hospitals could experience 340B eligibility delays of up to twenty-two months before becoming active on OPAIS. This is because hospital child site registrations cannot occur until the service is listed on a filed Medicare Cost Report (MCR).

Since the Electronic Handbook (EHB) is updated in real-time, the registration delays experienced by FQHCs are significantly shorter, but can stretch to up to eight and a half months in a worst-case scenario. The time between opening a clinic location, and it becoming active on OPAIS can result in significant 340B savings opportunity loss. While HRSA periodically offers the opportunity to register outside of the first 15 days of each quarter (as they are now related to the COVID-19 state of emergency), there can still be a two month delay before the associated site becomes active on OPAIS.

Having said all of this, FQHCs should not feel excluded from the recent attention shed in this area by OPA and Apexus. The nature of FAQs is that they raise a specific question to be answered which has applicability beyond the exact scenario raised to other similar situations. FQHCs and hospital covered entity types are similar in the eyes of HRSA, in that the covered entity is inclusive of all of the eligible locations that make up the organization. Outside of FQHC-Lookalikes, this is not the case for the other types of 340B eligible Federal grantees, where HRSA considers each 340B registration to be a separate and distinct covered entity.

Because of the aggregate covered entity registration models used for both hospitals parent and child sites and FQHCs (associated sites), logic would suggest that the newly published FAQs (included for reference below) would also be applicable to health centers registered as covered entities. To validate this reasoning, we reached out to Apexus and posed this question:

Turnkey Question: For hospitals, FAQ 4301 makes it clear that 340B eligibility may begin prior to OPAIS registration, can we also conclude that this logic applies to the FQHC associated sites? That once they are active on the EHB, they would be able to consider patients 340B eligible, so long as patient definition is met, and then register the location on OPAIS in the next registration window?

Needless to say, we were very appreciative and excited for the impact this would have for our FQHC clients when Apexus confirmed our logic answering:

Apexus Answer:  Yes, the patients could be eligible. As stated in the FAQ, the covered entity should evaluate whether the patients of the new site would be considered eligible patients with the patient definition and defined in your policies and procedures.

Knowing that with the right supporting policies, procedures, and processes are in place, OPA permits 340B utilization to begin prior to an associated site becoming active on OPAIS, you are likely wondering what policy language would look like. Policy and procedure must outline this new consideration and how auditable records must be maintained. When updating your policy, be sure to address necessary changes to definitions, as well as procedures for determining eligibility and enrollment.

Turnkey has drafted potential policy language to address the clarification made by the HRSA and Apexus FAQs:

340B Eligible Location:  A clinic location that is an integral part of a 340B federally qualified health center (FQHC) covered entity, is within scope of the grant and actively listed on the EHB. Both associated sites actively registered on  the OPAIS and new locations that are not yet actively registered as associated sites on OPAIS but are within Covered Entity’s scope of grant and actively listed on the EHB, are 340B Eligible Locations where 340B drugs can be purchased and/or used. 340B Eligible Locations shall be registered as associated sites on OPAIS during the OPA registration window which follows the site becoming active on the EHB.

Associated Site Participation: New associated site approval: CE ensures that each new associated site (i.e. new service delivery site) is assessed/approved internally before beginning participation in the 340B Program:

  • FQHC’s 340B Oversight Committee evaluates a new service delivery site of CE to determine if the location is eligible for participation in the 340B Program as an associated site of CE. 
  • The 340B Oversight Committee validates that the new service delivery site is added to the Electronic Handbook (EHB) prior to being enrolled as a new associated site of “FQHC” on the OPAIS.
  • At the 340B Oversight Committee’s recommendation, the Authorizing Official documents his/her approval of the new associated site’s participation in the 340B Drug Pricing Program in writing to the 340B Oversight Committee, including to CE’s accountable 340B staff member.

New Associated Site Participation: The 340B Oversight Committee validates that each new associated site approved by CE is enrolled and listed on the EHB before participating in the 340B Drug Purchasing Program.

New Associated Site Enrollment/Registration:

  • The Authorizing Official enrolls each new associated site approved by CE on the HRSA/OPA 340B database during the next available online OPA registration period.
  • The 340B Oversight Committee validates that each new associated site participating in the 340B Program is registered as associated sites on OPAIS during the OPA registration window which follows the site becoming active on the EHB.
  • For example, if a new associated site is enrolled/registered on January 1-15, 2021, the next available active OPAIS listing date is April 1, 2021. 

It is important to note that information regarding 340B eligibility is not a new policy from OPA but is instead a clarification of existing policy.

Turnkey’s Suggested New Associated Site 340B Eligibility Determination Process

Here are the newly approved FAQs:

Unpublished FAQ 1318 (5/29/20) Question:  Hospitals that have only ‘costs’ associated with that cost center/dept have been rejected from 340B registration because they had to wait for revenue to be on the MCR for that cost center/dept. Does worksheet A (and/or C) have to show costs, revenue, or both? For example, a clinic might just be opened and have costs, but has not seen patients (no revenue on cost report). Would such a clinic be eligible?
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Unpublished FAQ 1648 (5/29/20) Question: Our hospital subject to the GPO Prohibition moved a clinic outside the four walls but didn’t register it on the 340B OPAIS. It is not on the most recently filed cost report at that location but will be on our next cost report as a reimbursable clinic. Will OPA consider the site “continuously eligible?”
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Published FAQ ID: 4301 (06/04/2020) Question: Are hospital covered entities able to register offsite, outpatient facilities before being listed as reimbursable on their Medicare Cost Report?
Answer: In order to register for the 340B Program and be listed on the 340B Office of Pharmacy Affairs Information System (340B OPAIS), HRSA must first verify that the offsite, outpatient facility is listed as reimbursable on the hospital’s most recently filed Medicare cost report and has associated outpatient costs and charges as outlined in HRSA’s 1994 Outpatient Hospital Facilities GuidelinesHRSA notes that for hospitals who are unable to register their outpatient facilities because they are not yet on the most recently filed Medicare Cost Report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility. These situations should be clearly documented in the covered entity’s policies and procedures. In addition, a covered entity is responsible for demonstrating compliance with all 340B Program requirements and ensure that auditable records are maintained for each patient dispensed a 340B drug.

Published FAQ ID: 1193 (06/02/2020) Question: May an outpatient facility that is reimbursed by CMS as a provider-based facility, but not included on the most recently filed Medicare cost report, participate in the 340B Program?
Answer: A facility must be both reimbursable and included in the hospital’s most recently filed Medicare cost report with associated outpatient costs and charges to access the 340B Program and register in 340B OPAIS. HRSA’s outpatient facility guidelines can be found at in HRSA’s 1994 Outpatient Hospital Facilities Guidelines.

Please don’t hesitate to reach out if you have specific questions on this new development.


  • 1

HRSA Allows for Immediate 340B Use at PBDs/HOPDs

Several Apexus frequently asked questions (FAQs) have been released recently that have been interpreted to mean hospital 340B CEs will no longer need to wait to use 340B drugs at new or relocated provider-based clinics. Turnkey is just as pleasantly surprised as you are! Below is an attempt to clarify implications of these FAQs and highlight some important considerations. This much needed good news for hospitals means that there appears to be a renewed focus by HRSA to rely on the statutory definition of a patient, as Medicare would, and consider individuals to be patients of the hospital even though the service or department has not yet appeared on a filed Medicare Cost Report (MCR). A new provider-based location may begin to use 340B drug immediately, so long as provider-based requirements of CMS are met.  The following are some caveats to consider.

1. Policy and Procedure must outline this new consideration and how auditable records must be maintained. When updating your policy, be sure to address necessary changes to definitions, as well as procedures for determining eligibility and enrollment.

Turnkey has drafted potential policy language to address the clarification made by these FAQs:

340B Eligible Location Definition:  An onsite or offsite service area or facility (location) that is an integral part of a 340B hospital covered entity, as evidenced by the fact that it has reimbursable outpatient revenue and expense allocated to the hospital’s Medicare Cost report.

  • New locations that are not yet registered with OPA, but that are either (i) listed on the CE’s most recently-filed Medicare cost report with reimbursable outpatient costs and charges or (ii) will be listed with such on the next filed MCR, are 340B Eligible Locations where 340B drugs can be purchased and/or used.
  • Offsite 340B Eligible Locations shall be registered with OPA as soon as possible once listed on the hospital’s filed MCR. All clinics/services of an offsite 340B Eligible Location must be registered as a child site, regardless of whether they are in the same offsite building.

2. Once registered, a ship to address would be available for wholesalers to open a 340B account and ship 340B drugs to the off-site location. Until that occurs, alternate arrangements would need to be made to have 340B drug shipped to an already registered location (e.g., the parent).

3. Consider duplicate discount prevention strategies for an off-site clinic that carves-in Medicaid and uses a different NPI than the parent NPI to bill.  The new clinic’s NPI would need to be added to the parent registration, and subsequently the MEF, prior to utilizing 340B drug to prevent duplicate discount.

4. This new interpretation of statute does not appear to reflect HRSA’s flexibility during the COVID-19 health emergency and is expected to continue after the emergency ends.

Turnkey has drafted potential policy language to address the clarification made by these FAQs:

Here are the newly approved FAQs:

Unpublished FAQ 1318 (5/29/20) Question:  Hospitals that have only ‘costs’ associated with that cost center/dept have been rejected from 340B registration because they had to wait for revenue to be on the MCR for that cost center/dept. Does worksheet A (and/or C) have to show costs, revenue, or both? For example, a clinic might just be opened and have costs, but has not seen patients (no revenue on cost report). Would such a clinic be eligible?
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Unpublished FAQ 1648 (5/29/20) Question: Our hospital subject to the GPO Prohibition moved a clinic outside the four walls but didn’t register it on the 340B OPAIS. It is not on the most recently filed cost report at that location but will be on our next cost report as a reimbursable clinic. Will OPA consider the site “continuously eligible?”
Answer:  HRSA is not able to register and list this site on 340B OPAIS at this time.  In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report.  However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.

Published FAQ ID: 4301 (06/04/2020) Question: Are hospital covered entities able to register offsite, outpatient facilities before being listed as reimbursable on their Medicare Cost Report?
Answer
: In order to register for the 340B Program and be listed on the 340B Office of Pharmacy Affairs Information System (340B OPAIS), HRSA must first verify that the offsite, outpatient facility is listed as reimbursable on the hospital’s most recently filed Medicare cost report and has associated outpatient costs and charges as outlined in HRSA’s 1994 Outpatient Hospital Facilities Guidelines. HRSA notes that for hospitals who are unable to register their outpatient facilities because they are not yet on the most recently filed Medicare Cost Report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility. These situations should be clearly documented in the covered entity’s policies and procedures. In addition, a covered entity is responsible for demonstrating compliance with all 340B Program requirements and ensure that auditable records are maintained for each patient dispensed a 340B drug.

Published FAQ ID: 1193 (06/02/2020) Question: May an outpatient facility that is reimbursed by CMS as a provider-based facility, but not included on the most recently filed Medicare cost report, participate in the 340B Program?
Answer: 
A facility must be both reimbursable and included in the hospital’s most recently filed Medicare cost report with associated outpatient costs and charges to access the 340B Program and register in 340B OPAIS. HRSA’s outpatient facility guidelines can be found at in HRSA’s 1994 Outpatient Hospital Facilities Guidelines.

Please don’t hesitate to reach out if you have specific questions on this new development.