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340 b presentation 5.31.13


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340B and State Medicaid Agencies

340B and State Medicaid Agencies

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  • 340B Prime Vendor Program:
  • - (OIG, 2006)
  • Transcript

    • 1. Michol Bobb, CPhTmbobb1@umbc.eduInternMaryland Medicaid Pharmacy ProgramMay 2013
    • 2.  To identify a way for State MedicaidAgencies to recognize 340B priced claims inorder to avoid inappropriate rebateprocessing
    • 3.  340B is a Federal Discounted Drug Pricing Program that resultedfrom the enactment of Public Law 102-5851(the Veterans HealthCare Act of 1992). This Act came about as a means of controling the prices thatspecified government agencies2paid for purchasingpharmaceuticals. The intent of this program is to expand access to affordablemedications in low income populations and help support theoperations of safety net organizations. The 340B price is a ceiling price set by drug manufactures that isless than the Medicaid price of an eligible outpatient drug.
    • 4.  Apexus: Responsible for negotiating pricesbelow the 340B ceiling price and improvingaccess to affordable medications through adistribution network
    • 5.  Helps to offset the federal and state costs formost outpatient prescription drugs dispensed toMedicaid patients. Requires drug manufacture’s to enter into anational rebate agreement with the Secretary ofDHHS4(known as the Medicaid Drug RebateAgreement5) in exchange for State Medicaidcoverage of the manufacture’s drugs. This agreement holds manufacture’s responsiblefor paying a rebate each time one of their drugsis dispensed to a Medicaid patient
    • 6.  HRSA6: Regulator OPA7: Regulator Medicaid: Payer Contract Pharmacies: Providers
    • 7.  A 340B patient is defined as:◦ Someone who receives healthcare services from acovered entity that maintains health records for thepatient.◦ Someone who is prescribed medications that are for thetreatment of a received outpatient service at a coveredentity.◦ Someone referred for care within a covered entity (froma non-covered entity) becomes eligible as a 340B patientif the continuum of care is within the 340B covered entity
    • 8.  340B covered entities are organizations(facilities/programs) that provide medicalservices to the patient and are listed in the340B Statute as eligible to purchase drugsthrough the 340B Program and appear onthe Office of Pharmacy Affairs Database.
    • 9.  Federally Qualified Health Centers (FQHC) Comprehensive Hemophilia Treatment Centers Ryan White Programs (Parts A, B, C, D)8 Sexually Transmitted Disease/Tuberculosis Programs Title X Family Planning Clinics9 Urban / 638 Tribal Programs10 Federally Qualified Health Center Look-Alikes (FQHC-LA) Disproportionate Share Hospitals (DSH) Children’s Hospitals Free Standing Cancer Hospitals Critical Access Hospitals Sole Community Hospitals Rural Referral Centers
    • 10.  Contract pharmacies work with coveredentities to fill 340B prescriptions for 340Beligible patients. The covered entity isresponsible for maintaining health recordsfor the patient and the pharmacy isresponsible for maintaining medicationrecords for the patient with access to thepatients health records.
    • 11.  1. Hospital: The hospital must be eligible for 340B and registered with the 340Bprogram. 2. Patient: Patient must be seen in an outpatient facility or service area whichis “integral” to the hospital (i.e., whose costs are listed on the reimbursablesection of the hospital’s latest Medicare Cost Report-records each institutionstotal costs and charges associated with providing services to all patients). 3. Provider: Patient must be seen by a provider who is employedby, contracted by, or through other arrangements (such as a referral forconsultation). “Other arrangements” are applicable if the prescriptions capturedare “proximate in type and time” to the care patients receive at the hospital. 4. Records of Care: The record of care and responsibility of care must residewith the hospital 5. Pharmacy: Patient must obtain their prescription at the hospital’s pharmacyor from one of its 340B contracted pharmacies.
    • 12.  Ship-to Bill-to Method: With contractpharmacies, the 340B drugs get billed to thecovered entity and shipped to the pharmacyaddress Virtual inventories: It is managed by softwarefrom a third party company (Ex. SunRx). Itlimits the risk of diversion because it accountsfor every 340B script that is filled. Replenishment Systems: Easier to maintainwhen using a virtual inventory because thethird party automatically replenishes thepharmacy’s stock without the actual pharmacyneeding to keep track of used medications
    • 13.  Covered drugs:◦ Outpatient Prescription drugs◦ Over-the-counter drugs (accompanied byprescription)◦ Clinic administered drugs within eligible facilities Non-covered drugs:◦ Vaccines◦ In-patient drugs
    • 14.  1. Use 2 McKesson accounts, use parenthesis around drugname to identify 340B 2. Use dual inventory system, created NRX13system, useasterisk around product name to identify 340B, use ship-tobill-to 3. Use electronic inventory, uses patients to identify 4. Wrong contact person 5. Uses CaptureRx
    • 15.  6. Referred to another person in charge of CHAMP14program 7. Doesnt participate, 340B is to confusing 8. Clinic does everything and replaces drugs used inpharmacy 9. (had a 340B contact person listed that was in charge ofmultiple sites) Doesn’t participate in MD 10. Two separate inventories and 2 separate accounts withwholesaler
    • 16.  11. One store participates, uses 3rd party to identify340B scripts (would not disclose name of 3rd party) 12. Told me to address any questions to the coveredentity, doesn’t know much about 340B 13. Four 340B hospitals out of 10 14. Mixed-use = carve in, retail = carve out, usesreplenishment model, uses virtual inventory system totrack usage (does not identify drugs at shelf level) 15. Use ship-to bill-to, doesn’t use any inventory system
    • 17.  16. One program in MD, virtual inventorysystem, retail pharmacy contract, bill-toship-to replacement method * Results: HRSA website containedinconsistencies with contact name, contactnumber, and participating information
    • 18.  Use Provider NPI15 Use HRSA Exclusion File: contact providersto ensure participation Use an agency created exclusion file andaudit that against HRSA exclusion file Use NCPDP16Transaction Strings: basis ofcost and 340B indicator fields
    • 19.  Monthly Claims Audit is required from 340Bpharmacies: monitors that discount is beingpassed on to Medicaid 340B providers have different ID numbers Dual inventory systems Avoiding Duplicate Discounts:◦ Exclude all claims from entities on HRSAexclusion file in rebate processing, encourageproviders to be all in or all out.
    • 20.  Charge no more than actual acquisition cost+ dispensing fee Use Usual and Customary pricing: toidentify 340B claims on invoices Pay dispensing fees up to $12.00 *data was obtained from 42 states*17
    • 21.  The 340B ceiling prices are calculated according to a formulathat is based on information generated in connection with theMedicaid drug rebate program Manufacturers are required to report to the Centers forMedicare & Medicaid Services (CMS) each quarter the averagemanufacturer price (AMP) for each of their drugs CMS uses AMP and other data to calculate a unit rebateamount (URA) that serves as a basis for the rebate amountspaid by manufacturers The AMP and URA used in the 340B ceiling price formula arebased on the smallest dispensable unit of each drug The 340B ceiling price is based on these components and isessentially equal to the AMP reduced by the URA
    • 22.  The 340B ceiling prices per package arecalculated as follows:◦ [(AMP) - (URA)] * drug’s package size
    • 23.  Can’t identify by pharmacy: purchase 340B andnon 340B drugs Can’t identify by patient: they bring in theprescription (unless entity fills all 340B scripts) Can’t identify by prescriber: may work at 340Band non 340B entity Can’t identify by NDC19: 340B and non 340Bdugs have same NDC (some places put aunique identifier in the NDC)
    • 24.  Have provider differentiate 340B claims at timeof submission Split billing software to differentiate 340B claims Implementing audit forms *after verifying all information is accurate* -Require all participating entities on the HRSAexclusion file to purchase and bill all Medicaiddrugs under 340B pricing
    • 25.  Include a line in the NCPDP transaction thatcodifies a 340B claim Recommend that state Medicaid Agenciescome together and petition for HRSA torelease 340B prices
    • 26. 1.Limitation on prices of drugs2. US Department of Veterans Affairs: (Big 4) Department of Veterans Affairs, theDepartment of Defense, Public Health Service/Indian Health Service, and the CoastGuard. These government agencies receive special pricing discounts on pharmaceuticalsin accordance with public law 102-585.3. Partnership between CMS, State Agencies, and participating drug manufactures4. Department of Health and Human Services5. Medicaid Drug Rebate Agreement: Health Resources and Services Administration7. Office of Pharmacy Affairs8. Ryan White Programs: Title X Family Planning Clinic: Urban/Tribal Programs: SunRx:,%20Understanding%20the%20340B%20Program%20-%20David%20Hardman.pdf
    • 27. 12. Health Resources and Services Administration13. Electronic system created to manage 340B inventory14. Maryland Child Abuse Providers at the University of MarylandChildren’s Hospital (Part of the University of Maryland Medical Center)15. National Provider Identifier16. National Council for Prescription Drug Programs17. Nebraska, Ohio, New York, Minnesota, Washington, Alaska, Alabama,Arizona, Arkansas, California, Connecticut, Delaware, Iowa, Louisiana,Maine, Massachusetts, Mississippi, Montana, Illinois, Nevada, Oklahoma,Missouri, New Hampshire, New Mexico, Oregon, Rhode Island, NewJersey, South Carolina, South Dakota, North Dakota, Tennessee, Texas,Utah, Colorado, Florida, Georgia, Michigan, Kentucky, Wisconsin, WestVirginia, Virginia, Pennsylvania18. Office of the Inspector General, 200619. National Drug Code
    • 28.  Apexus 340B University. (2013, April). 340B Glossary of Terms. RetrievedApril 26, 2013, from Public Law 102-585. (2012, October 12). In United States Department ofVeterans Affairs. Retrieved April 26, 2013, from Review of 340B Prices. (2006, July). In Office of the Inspector General.Retrieved May 3, 2013, from HRSA FAQ : 340B Drug Pricing Program: 340B Prime Vendor Program:
    • 29.  Office of Pharmacy Affairs (OPA)Phone: 301-594-4353Mailing Address: Office of Pharmacy Affairs, HRSA5600 Fishers LaneParklawn Bldg, Room 10C-03Rockville, Maryland 20857Pharmacy Support Services Center: 1-800-628- 6297