This article discusses audit readiness for hospitals participating in the 340B drug pricing program. It outlines several key areas hospitals should focus on to ensure compliance, including: 1) confirming eligibility requirements for the hospital, patients, and prescribers; 2) developing comprehensive oversight strategies and compliance monitoring programs; and 3) incorporating frequent self-audits and preparing for potential audits from the Health Resources and Services Administration. The article provides tips for audit readiness, such as establishing policies and procedures, updating databases, conducting ongoing education and monitoring, and developing a community benefit plan.
Title X rule change led to 1,000 clinics leaving the funding networkΔρ. Γιώργος K. Κασάπης
A new analysis from the Guttmacher Institute finds that the Trump administration’s changes to the Title X program has meant that nearly 1 in 4 sites relying on funding through the program have had to leave the network. Here’s more:
•The context: In March last year, the federal government finalized a rule saying that health centers and providers who receive Title X funding can no longer perform abortions or refer patients to abortion providers. Nearly 4 million low-income individuals rely on these sites for other care, including cancer screenings and birth control.
•Services affected: Nearly 1,000 clinics — or 1 in 4 Title X sites — left the program due to the changes, cutting the network’s capacity for treating patients by almost half. Nearly 1.6 million patients who rely on contraception through Title X will likely be unable to get the medication.
•The outlook: The new rules go into effect at the beginning of March, and the report’s authors say it’s likely that more clinics will have to forgo Title X funding if the rules are fully enforced.guttmher institute
SUNRx can lower the cost of drugs for patients and generate profit and cash flow for 340B eligible entities such as FQHC\'s and DSH Hospitals). We also have a Payor model which provides savings to Medicaid Managed Care organizatins. Contact me for more details!
The 340B Program and Implications of the Mega GuidanceCompleteRx
As the 340B Drug Pricing Program continues to undergo changes, our team has been following all the recent updates and how they impact hospital pharmacies. This presentation goes through the latest on the long awaited guidance of proposed changes that was posted by the Federal Register on August 28, 2015.
Title X rule change led to 1,000 clinics leaving the funding networkΔρ. Γιώργος K. Κασάπης
A new analysis from the Guttmacher Institute finds that the Trump administration’s changes to the Title X program has meant that nearly 1 in 4 sites relying on funding through the program have had to leave the network. Here’s more:
•The context: In March last year, the federal government finalized a rule saying that health centers and providers who receive Title X funding can no longer perform abortions or refer patients to abortion providers. Nearly 4 million low-income individuals rely on these sites for other care, including cancer screenings and birth control.
•Services affected: Nearly 1,000 clinics — or 1 in 4 Title X sites — left the program due to the changes, cutting the network’s capacity for treating patients by almost half. Nearly 1.6 million patients who rely on contraception through Title X will likely be unable to get the medication.
•The outlook: The new rules go into effect at the beginning of March, and the report’s authors say it’s likely that more clinics will have to forgo Title X funding if the rules are fully enforced.guttmher institute
SUNRx can lower the cost of drugs for patients and generate profit and cash flow for 340B eligible entities such as FQHC\'s and DSH Hospitals). We also have a Payor model which provides savings to Medicaid Managed Care organizatins. Contact me for more details!
The 340B Program and Implications of the Mega GuidanceCompleteRx
As the 340B Drug Pricing Program continues to undergo changes, our team has been following all the recent updates and how they impact hospital pharmacies. This presentation goes through the latest on the long awaited guidance of proposed changes that was posted by the Federal Register on August 28, 2015.
Translating compliance requirements into action items 340BCompliatric
With constant changes in HRSA’s “expectations”, “recommendations” and audit focus, implementation and ongoing compliance of hospital and grantee’s 340B programs can be an arduous task, and also a moving target. RPh Innovations (RPHI), a 340B Program Support and Independent Auditor established in 2011, will re-center the focus around core statues and regulatory concepts of the program, and outline action items to help attendees start implementing structure, policy, and delegation of responsibilities within their respective institutions.
Prescription Medicines - Costs In Context March 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Best Practices for Traditional Chinese Medicine Companies to Improve Traceabi...Alfons Futterer
Get insights into the latest traceability and brand protection technologies on traditional Chinese medicine.
Through this webinar presentation you’ll learn about:
- Counterfeit drugs and fake Chinese traditional medicine statistics
- Technologies
Tim Mackey, Assistant Professor, University of California, San Diego - Department of Anesthesiology, speaks about the effect counterfeit Avastin has had on efforts to protect the American public from counterfeit medications.
Unethical Practices in Pharma - Interesting Study from Pakistan Anup Soans
This study clarifies the current pharmaceutical drug promotion and prescribing practices in Pakistan. The majority of prescribers and national pharmaceutical firms and to some extent the multinational pharmaceuticals are involved in unethical practices in drug promotion and prescribing. Alarming policies governing the drug promotion and prescribing are required to be implemented by the concerned regulatory authorities to avoid unnecessary harm to the patient’s life and pocket through the unethical drug promotion. The prescribers should not accept any incentives, gifts of financial value from any pharmaceutical companies in return for an increase in prescribing selected brand. On the other hand, pharmaceutical companies must compete in the market on the basis of the drug quality and do not offer any valuable gift and incentives to the prescribers. The interaction between doctors and phar- maceutical firms should be restricted within acceptable boundaries and the authorities must be prepared to play an active role. Strengthening the regulatory machinery and formulating policies in this regard in neces- sary. It is essential that a health care professional such as a pharmacist can play an important role in this process since he/she is an expert in the pharmaceutical field as well as more aware of the outcomes of unethical drug prescribing practices such as polypharmacy and adverse drug reactions.
Quick Sccess Guide: Top 25 Questions Answered by the New FDA Q&A DraftAngela Carver
Supply chain businesses nationwide are rushing to implement operational changes in order to meet upcoming FDA Drug Supply Chain Security Act deadlines. This process has been a struggle for many due to the complexity of this legislation. Different business types must follow different portions of the rule in regards to reporting, registering and much more. The Food and Drug Administration released a new draft to answer some of the most frequently asked questions from third party logistics and wholesale distribution operations. This report is an update to a previously published 2014 draft. It is the intention of the FDA that these drafts are viewed together. This Q&A supplemental provides clarification based on the most frequently asked questions and comments received after the publication of the Annual Reporting draft guidance.
It is critical to clearly understand how these changes will affect your operation as any error in reporting or filing can result in significant penalties. Take advantage of these detailed tools provided by the FDA to ensure your operation is prepared before reported deadline dates. For more information on technologies to aid in pharmaceutical regulatory compliance contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext. 243.
Translating compliance requirements into action items 340BCompliatric
With constant changes in HRSA’s “expectations”, “recommendations” and audit focus, implementation and ongoing compliance of hospital and grantee’s 340B programs can be an arduous task, and also a moving target. RPh Innovations (RPHI), a 340B Program Support and Independent Auditor established in 2011, will re-center the focus around core statues and regulatory concepts of the program, and outline action items to help attendees start implementing structure, policy, and delegation of responsibilities within their respective institutions.
Prescription Medicines - Costs In Context March 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Best Practices for Traditional Chinese Medicine Companies to Improve Traceabi...Alfons Futterer
Get insights into the latest traceability and brand protection technologies on traditional Chinese medicine.
Through this webinar presentation you’ll learn about:
- Counterfeit drugs and fake Chinese traditional medicine statistics
- Technologies
Tim Mackey, Assistant Professor, University of California, San Diego - Department of Anesthesiology, speaks about the effect counterfeit Avastin has had on efforts to protect the American public from counterfeit medications.
Unethical Practices in Pharma - Interesting Study from Pakistan Anup Soans
This study clarifies the current pharmaceutical drug promotion and prescribing practices in Pakistan. The majority of prescribers and national pharmaceutical firms and to some extent the multinational pharmaceuticals are involved in unethical practices in drug promotion and prescribing. Alarming policies governing the drug promotion and prescribing are required to be implemented by the concerned regulatory authorities to avoid unnecessary harm to the patient’s life and pocket through the unethical drug promotion. The prescribers should not accept any incentives, gifts of financial value from any pharmaceutical companies in return for an increase in prescribing selected brand. On the other hand, pharmaceutical companies must compete in the market on the basis of the drug quality and do not offer any valuable gift and incentives to the prescribers. The interaction between doctors and phar- maceutical firms should be restricted within acceptable boundaries and the authorities must be prepared to play an active role. Strengthening the regulatory machinery and formulating policies in this regard in neces- sary. It is essential that a health care professional such as a pharmacist can play an important role in this process since he/she is an expert in the pharmaceutical field as well as more aware of the outcomes of unethical drug prescribing practices such as polypharmacy and adverse drug reactions.
Quick Sccess Guide: Top 25 Questions Answered by the New FDA Q&A DraftAngela Carver
Supply chain businesses nationwide are rushing to implement operational changes in order to meet upcoming FDA Drug Supply Chain Security Act deadlines. This process has been a struggle for many due to the complexity of this legislation. Different business types must follow different portions of the rule in regards to reporting, registering and much more. The Food and Drug Administration released a new draft to answer some of the most frequently asked questions from third party logistics and wholesale distribution operations. This report is an update to a previously published 2014 draft. It is the intention of the FDA that these drafts are viewed together. This Q&A supplemental provides clarification based on the most frequently asked questions and comments received after the publication of the Annual Reporting draft guidance.
It is critical to clearly understand how these changes will affect your operation as any error in reporting or filing can result in significant penalties. Take advantage of these detailed tools provided by the FDA to ensure your operation is prepared before reported deadline dates. For more information on technologies to aid in pharmaceutical regulatory compliance contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext. 243.
With constant changes in HRSA’s “expectations”, “recommendations” and audit focus, implementation and ongoing compliance of hospital and grantee’s 340B programs can be an arduous task, and also a moving target. RPh Innovations (RPHI), a 340B Program Support and Independent Auditor established in 2011, will re-center the focus around core statues and regulatory concepts of the program, and outline action items to help attendees start implementing structure, policy, and delegation of responsibilities within their respective institutions.
Julie Johnston from CaptureRx, located in San Antonio, presented at the 340b Winter Conference on the benefits of the Cash Card program. For more information, please head to www.capturerx.com.
Case 13340B Drug Pricing Program OversightSection 602 of the Vet.docxketurahhazelhurst
Case 13340B Drug Pricing Program Oversight
Section 602 of the Veterans Health Care Act of 1992 was titled “Limitations on Prices of Drugs Purchased by Certain Clinics and Hospitals.”It amended the Public Health Services Act by adding a new section, Section 340B, to that act. Section 602 of the Veterans Health Care Actread in part:
Part D of title III of the Public Health Service Act is amended by adding the following subpart: “SUBPART VII – DRUG PRICINGAGREEMENTS” LIMITATION ON PRICES OF DRUGS PURHASED BY COVERED ENTITIES “Sec. 340B (a) Requirements for Agreement withSecretary – “(1) In general. The Secretary shall enter into an agreement with each manufacturer of covered drugs under which theamount required to be paid … to the manufacturer for covered drugs … does not exceed an amount equal to the average manufacturerprice for the drug under title XIX of the Social Security Act in the preceding quarter, reduced by the rebate percentage described inparagraph (2). “Rebate percentage defined. – (A) In general. For a covered outpatient drug … the ‘rebate percentage’ is the amount equalto – “(i) the average total rebate required under Section 1927(c) of the Social Security Act … for a unit of the dosage form and strengthinvolved during the preceding quarter divided by “(ii) the average manufacturer price for such a unit of the drug during such quarter….”
Section 340B applied Medicaid drug discounts to drugs purchased for clinics that served many outpatients who were not eligible forMedicaid at qualified safety-net institutions. For the most part, eligible clinics were associated with hospitals receiving disproportionateshare payments under Medicare, pediatric hospitals, and community health centers. Also included were specialized clinics and projects forHIV/AIDS, hemophilia, black lung, tuberculosis, and family planning, as well as those serving Native Americans and Native Hawaiians.Hospitals were required to be governmental or nonprofit with a contractual commitment to provide services supported by governments,have a disproportionate share percentage greater than 11.75, and not obtain the covered drugs through a group purchasing agreement. Thedrugs had to be used for patients of the covered entity and could not be resold.
A key provision of Section 340B read “(10) No prohibition on larger discount. Nothing in this subsection shall prohibit a manufacturer fromcharging a price for a drug that is lower than the maximum price that may be charged under paragraph (1).” The Patient Protection andAffordable Care Act (ACA or PPACA) increased the 340B discount to 13% on generic drugs and 23.1% on branded drugs. Specific discountshave been reported to range from 15–60% on prescription drugs. The law prohibits getting both a state Medicaid rebate and a 340Bdiscount on a drug.
BACKGROUND
In the 1980s, Congress established a discount drug purchasing program for the Veterans Administration. In 1990, it extended this discountprogram to Medicaid purchases on beh ...
Compliatric is excited to host the first of a two part 340B webinar series, presented by Ryan DiGiovanni, an Apexus Certified Expert (ACE) Pharmacist, President of EPL Health, and 340B Program Manager, Rush University Medical Center.
This webinar will provide evaluation tactics, operational considerations and planning required for covered entities before, and potentially after, participating in the 340B ESP platform. For the C-suite, this webinar will provide an overview of impact and implications of participation. For those involved in daily 340B program management, a more detailed breakdown of 340 ESP app usage, requirements, and resources will be discussed.
The Future of Healthcare in Consumerism WorldCitiusTech
The main aim of this document is to provide an overview of healthcare consumerism, its growth drivers and challenges / barriers providers and payers face while adopting it. The document provides insights on how providers and payers can tackle the rising wave of consumerism in healthcare industry. The document also provides some real-life examples on market trends which emphasize the need to brace consumerism in healthcare
Fair Market Value: What Rural Providers Need to Know PYA, P.C.
PYA Principal Tynan Olechny and Senior Manager Annapoorani Bhat provided important information for rural providers related to fair market value and commercial reasonableness considerations during a National Rural Health Association webinar, “Valuations: What Rural Providers Need to Know."
Presentation: Medicines shortages - Changes to the communication and manageme...TGA Australia
Medicine shortages have become an increasing problem in the past few years for a number of reasons. Under the current medicine shortage management scheme launched in 2014 sponsors voluntarily report shortages to TGA; although a significant number of shortages of extreme or high patient impact have not been reported by some sponsors. Timely reporting of shortages and public communication of those which have a significant clinical impact enables alternative supplies of the product to be accessed or remaining available product to be rationed. This presentation covers changes being made to improve the management and communication of medicines shortages in Australia.
Copyright 2013 American Medical Association. All rights reserv.docxvanesaburnand
Copyright 2013 American Medical Association. All rights reserved.
Hospitals, Market Share, and Consolidation
David M. Cutler, PhD; Fiona Scott Morton, PhD
O ver the last few decades, what was once an independenthospital has increasingly become a health system cen-tered on inpatient institutions. Many health systems in the
market today generally have 1 or more academic medical center
“hubs,” surrounded by other community or short-term acute hos-
pital “spokes,” and ownership interest or close affiliations with phy-
sicians, clinics, rehabilitation facilities, and other health care prac-
titioners and organizations. Because hospitals are often the center
of the institution, medical care across the continuum is effectively
coming under the direct or indirect control of institutions that pro-
vide inpatient care.
Policy makers both revere and revile these health systems. On
the one hand, lack of coordination has long been seen as a key fail-
ure of US health care.1 Integrated health systems have the capacity
to address the quality deficiencies resulting from lack of coordina-
tion. On the other hand, health systems can become so large that
they are able to increase prices, harming consumers and taxpay-
ers. Thus, there are increasing calls for greater antitrust scrutiny of
hospital systems.2
Which of these views is right? Should big health systems be
treated the same as retailers or Internet companies that merge to
become dominant in their markets? Or should growth of health
care systems be encouraged in the name of efficiency and better
outcomes? In this Special Communication, we present data on
the growth of integrated systems, discuss the potential benefits
and harms of integration, and consider possible remedies.
Methods
Analysis of Hospital Markets
Our analysis of hospital markets is based on data from the Ameri-
can Hospital Association (AHA). We used data on nonfederal, short-
term general and specialty hospitals that have facilities and ser-
vices available to the public.
Information on hospital days and the number of hospitals over
time was derived from the AHA Chartbook.3 To understand how hos-
pital markets have become structured, we analyzed information for
the 306 hospital referral regions (HRRs) spanning the country, using
data from 2010. Hospitals were grouped into systems, with the hos-
pitals in each system treated as an entity. We considered systems only
within the same HRR. If a parent system had multiple hospitals in dif-
ferent HRRs, each HRR was considered separately so that we could
adequately assess the competitive environment in each HRR.
To characterize the competitive environment in the HRR, we used
2 metrics. First, we considered the share of admissions that are cap-
tured by a certain number of institutions (eg, the share of admissions
in the largest 3 hospitals or hospital systems). Second, we calculated
for each market using the Herfindahl-Hirschman Index4 (HHI) of con-
centration. This variable is the sum o.
The report features an extensive study of companies engaged in offering patient recruitment and retention services. The study features an in-depth analysis of the key drivers and trends related to this domain.
For more details, click here: https://www.rootsanalysis.com/reports/view_document/patient-recruitment-and-retention-services-market/245.html
Global pharmaceutical companies are modeled with a supply chain, which ensures that the right drug reaches the right people at the right time and in the right condition. The supply chain also ensures 100% product availability at optimum cost by carrying huge inventory, which maintains 100% fill rate. Manufacturers are trying to cut down development time to save costs. For example, a drug manufacturer who can trim development time by 19% can save up to USD 100 million. But if a drug is getting delayed to reach the market, the time delay costs the company around USD 1 million a day. So, pharmaceutical companies today are designing the supply chain to be as responsive as possible to reduce entry time to the market thereby increasing profit margins.
Healthcare is Getting Disrupted... Is Pharmacy Ready?Hillary Blackburn
Change is coming for the healthcare industry, particularly as digital disruption is happening. Within the broader healthcare industry, pharmacy will be impacted and should be ready to help the profession grow and thrive.
10 healthcare players aiming beyond health equality to conquer health equityInsights10
Pharma's reputation may have improved during the pandemic, but that also meant that diversity, equity, and inclusion (DEI) issues were given more attention. Pharma companies have mostly concentrated on equality in recent years, but this new era of health equity is needed to address the expanding population's DEI challenges.
To get a report in detail, contact us at - info@insights10.com
Similar to Compliance Today article March 2015 (20)
10 healthcare players aiming beyond health equality to conquer health equity
Compliance Today article March 2015
1. 27
Fraud control
strategy:
Where to focus
limited resources
Mia Okinaga
31
Is your
privacy
monitoring
up to snuff?
Nadia Fahim-Koster
43
340B drug program:
Hospital audit
readiness
Susan Prior and
Cristine Vogel
39
Compliance
challenges in
new chronic care
management code
Peter A. Khoury
a publication of the health care compliance association www.hcca-info.org
ComplianceTODAY March 2015
Protecting the healthcare
rights of everyday citizens
an interview with Jocelyn Samuels
Director of the Office for Civil Rights,
U.S. Department of Health Human Services
See page 18
Protecting the healthcare
rights of everyday citizens
an interview with Jocelyn Samuels
Director of the Office for Civil Rights,
U.S. Department of Health Human Services
See page 18
Protecting the healthcare
rights of everyday citizens
an interview with Jocelyn Samuels
Director of the Office for Civil Rights,
U.S. Department of Health Human Services
See page 18
Protecting the healthcare
rights of everyday citizens
an interview with Jocelyn Samuels
Director of the Office for Civil Rights,
U.S. Department of Health Human Services
See page 18
This article, published in Compliance Today, appears here with permission from the Health Care Compliance Association. Call HCCA at 888-580-8373 with reprint requests.
2. 888-580-8373 www.hcca-info.org 43
ComplianceToday March2015
FEATURE
T
he 340B drug pricing program is
designed to help certain safety net
healthcare providers extend services to
the underserved and uninsured. It was estab-
lished under the Veterans Health Care Act of
1992 in section 340B of the Public Health Service
Act, and is managed under the federal Health
Resources and Services Administration (HRSA).1
The 340B program enables eligible facilities to
purchase outpatient drugs at discounted prices;
discounts can be up to 50% of the drug’s cost.2
Eligible facilities, called covered entities, receive
discounts from the drug manufacturers and
are expected to pass the revenue gains toward
services targeted at populations in need or to
reduce the cost of patients’ prescription drugs.
Today more than 7,800 entities are covered
by the program. Federal officials estimate that
the 340B program accounts for $6 billion in
outpatient drug spending with an estimated
savings of $1.6 billion for 340B providers. Some
experts say that with the expansion of this
program under the Affordable Care Act (ACA),
the program spending could possibly double.3
In response to the increased number of enti-
ties participating in the 340B program, HRSA is
increasing the number of audits con-
ducted with covered entities. Although
the FY2014 audits are still in process,
HRSA reports that as of August 2014,
91 audits of covered entities have been
conducted, including 1,347 outpatient
facilities and 3,811 contracted phar-
macies (entities may have multiple
outpatient sites and are able to con-
tract with multiple pharmacies). This
far exceeds the number of audits in
FY2012, which included 94 audits of
covered entities (718 outpatient facili-
ties and 1,937 contracted pharmacies).4
Given the complexity of the 340B
program, hospital systems that have
multiple campus locations, outpatient
clinic sites, and contract pharmacies
need to develop a comprehensive oversight
strategy and compliance monitoring program.
Although the probability of an audit may seem
low, the stakes are high when failure to comply
can result in large repayments to the drug
manufacturers or program termination. Audit
readiness is critical to the long-term sustainabil-
ity of the program.
Confirm eligibility requirements
Assessing the hospital’s 340B program is
essential to ensure policies and procedures
by Susan Prior, CHC and Cristine Vogel, MPH
340B drug program:
Hospital audit readiness
»» Develop a comprehensive oversight and monitoring strategy to remain compliant within the complexities of the 340B program.
»» Define clear policies and procedures for patient and prescriber eligibility.
»» Review eligibility requirements and regularly update HRSA database.
»» Incorporate frequent self-audits and annual external audit to ensure readiness.
»» Develop community benefit plan to ensure HRSA’s program intent.
Prior
Vogel
Susan Prior (sprior@vantagepointconsult.com) is the President and COO and
Cristine Vogel (cvogel@vantagepointconsult.com) is a Senior Consultant
for VantagePoint HealthCare Advisors in Hamden, CT.
3. 44 www.hcca-info.org 888-580-8373
ComplianceToday March2015 FEATURE
are in place for all federal requirements.
Equally important is that the hospital is
adhering to its own policies and procedures.
Having well-defined procedures, training,
and monitoring that address these three key
areas are critical:
·· Hospital eligibility
·· Patient eligibility and diversion prohibition
·· Prescriber eligibility
340B hospital eligibility requirements
There are 17 covered entity categories, includ-
ing 11 categories that qualify through federal
grant programs and six categories for hospi-
tals (see Table 1).
Each category has its own eligibility
requirements. For hospital eligibility, they
must be designated as a not-for-profit and
be one of the six hospital categories listed in
Table 1. Secondly, the hospital must meet at
least the minimum Disproportionate Share
Hospital (DSH) percentage for the specific
hospital type as reported on the most recent
Medicare Cost Report. The percentage varies
with hospital categories (see Table 2).
After a hospital applies and is approved
to participate in the 340B program, the hospi-
tal must register in the HRSA database. This
information includes the hospital’s contact
information, hospital and clinic location(s),
Federal Grantees/Designees Certain Hospitals
·· Federally Qualified Health Center
·· Federally Qualified Health Center Look-A-Likes
·· Title X Family Planning Grantees
·· State AIDs Drug Assistance Programs
·· Ryan White Care Act Grantees (A,B,C,D,F)
·· Black Lung Clinics
·· Hemophilia Treatment Centers
·· Native Hawaiian Health Centers
·· Urban Indian Organizations
·· Sexually Transmitted Disease Grantees
·· Tuberculosis Grantees
·· Disproportionate Share Hospitals
·· Children’s Hospitals
·· Critical Access Hospitals
·· Free-Standing Cancer Hospitals
·· Rural Referral Centers
·· Sole Community Hospitals
Hospital Category DSH Percentage
·· DSH Hospitals
·· Children’s Hospitals
·· Free-Standing Cancer Hospitals
11.75%
·· Rural Referral Centers
·· Sole Community Hospitals
≥ 8%
·· Critical Access Hospitals Not Applicable
Table 2: DSH Percentage by Hospital Category
Table 1: Categories of 340B Covered Entities
4. 888-580-8373 www.hcca-info.org 45
ComplianceToday March2015
FEATURE
contracted pharmacies, and Medicaid billing
information. Each outpatient clinic site listed in
the database needs to appear as a reimbursable
clinic on the most recently filed Medicare Cost
Report, each site needs to be an integral part of
the hospital, and be used by patients that meet
the 340B patient definition. If any of this infor-
mation changes during the year, the hospital
must update the HRSA database during one of
the designated quarterly periods.
Additionally, annual recertification is
required to ensure that the information is not
only current for the following year, but also that
the 340B hospital continues to meet eligibility
requirements. If a covered entity fails to recer-
tify, participation is automatically terminated.
340B patient eligibility requirements
Although eligibility to participate in the 340B
program is defined at the covered entity level,
not every patient who receives care at the cov-
ered entity level can receive drugs purchased
through the 340B program. HRSA defines a
patient as eligible for 340B when the hospi-
tal can demonstrate these three parameters
regarding the patient: (1) the patient has an
established healthcare relationship with the
hospital or services provided by the hospital;
(2) the hospital maintains health records of the
services provided to the patient; and (3) the
patient receives services from a provider who
is employed or under contractual or other
arrangements with the hospital.
The 340B drug program is applicable for cer-
tain outpatient drugs and allows the participating
hospital to use the discount. It is the responsibility
of the 340B hospital to make sure only patients of
that hospital are being prescribed 340B drugs and
that the hospital is receiving discounts only for
patients of the hospital.
When a physician under contract with a 340B
hospital provides care to an eligible patient, but
that care is outside of the physician’s contractual
agreement or provided at a site not designated
as a 340B location, the patient is no longer
340B-eligible according to HRSA’s definition. The
hospital must therefore, have a process to deter-
mine and monitor patient eligibility as it relates
to the prescriber and location. Additionally, the
hospital must ensure that proper data is provided
to the pharmacies so the pharmacies are aware
when prescriber and patient eligibility changes
from 340B status. 340B hospitals must be able to
identify not only that the patient at each site of
service is eligible, but also that the physician is
an eligible 340B prescriber at that site of service.
• Preventing diversion
Diversion occurs when 340B drugs are dis-
pensed to ineligible patients, a scenario where
it appears as though the hospital is transfer-
ring or re-selling 340B-purchased drugs at a
non-340B price. The hospital is responsible for
verifying the eligibility of its 340B patients and
is responsible for providing their pharmacies
with the proper data so that only 340B drugs
are prescribed and dispensed to eligible 340B
patients. Because diversion is prohibited, hos-
pitals must have a plan to conduct regularly
scheduled monitoring for compliance. HRSA
recommends monthly monitoring.
340B prescriber eligibility requirements
A 340B hospital must demonstrate that a health-
care practitioner is either an employee, under
contract, or has some “other arrangement” that
satisfies the eligible prescriber requirements.
Active medical staff who have clinical privi-
leges are eligible to write 340B prescriptions.
Specifically excluded from 340B prescriber
eligibility are those physicians with admit-
ting privileges only, affiliates, or emeritus staff.
Practitioner information must be downloaded
and frequently updated in the in-house dispens-
ing system and also in the contracted pharmacy
dispensing system by the hospital’s credential-
ing department to help maintain the integrity
of the data that is used by the pharmacy.
5. 46 www.hcca-info.org 888-580-8373
ComplianceToday March2015 FEATURE
Ensure 340B compliance
with HRSA statute prohibitions
Duplicate discounts are prohibited and Group
Purchasing Organizations (GPO) cannot use
340B discounts. During an HRSA or manu-
facturer audit, make sure policies, procedures,
and other supporting documentation can
be produced and align with the hospital’s
current practice.
A duplicate discount occurs when the
same drug is purchased with an upfront 340B
discount and also credited with a back-end
Medicaid Rebate transaction. 340B hospitals are
responsible for the prevention of duplicate dis-
counts, and HRSA will request documentation
to demonstrate compliance with the program.
When an eligible hospital enrolls in the
340B program, it must decide whether or not
to purchase and dispense 340B drugs for its
Medicaid patients (carve-in), or whether it
will purchase drugs through other methods
(carve-out). Table 3 summarizes these details.
The decision as to how the 340B hospital
will handle the dispensing of 340B drugs to
Medicaid patients should be directly related
to its diversion compliance plan.
When a hospital decides to purchase 340B
drugs for its Medicaid patients, the hospital
is required to inform HRSA by inputting
its Medicaid provider number and/or it’s
National Provider Identifier (NPI) into
HRSA’s Medicaid Exclusion File database.
The Medicaid Exclusion File is the mecha-
nism that state Medicaid agencies use to identify
all covered entities that use 340B drugs for
Medicaid patients, so that the state can remove
pharmacy claims associated with those enti-
ties from rebate requests. The 340B hospital
is responsible for its Medicaid Exclusion
File accuracy, including all Medicaid billing
numbers/NPI(s) used for billing those claims
to the state.
If a hospital decides to bill Medicaid for
drugs purchased under 340B with a Medicaid
provider number/NPI, then all drugs billed to
that number must be purchased under 340B
and that Medicaid provider number/NPI must
be listed on the HRSA Medicaid Exclusion
Carve-In Carve-Out
·· Purchase drugs at 340B prices
·· Medicaid patients receive 340B program drugs
·· 340B-purchased drugs are excluded from
Medicaid Rebates
·· Covered entity must respond with “YES”
in the Medicaid Exclusion File
·· Medicaid billing numbers/NPI(s) are listed
in the Medicaid Exclusion File
·· All listed NPI numbers must be checked for
accuracy, especially to reflect any changes
·· Purchase drugs at non-340B prices
·· Medicaid patients do not receive 340B drugs
·· Covered entity must respond with “NO”
in the Medicaid Exclusion File
·· No Medicaid billing numbers/NPI(s) are listed
in the Medicaid Exclusion File
·· Covered entities must have clearly defined
procedures surrounding the 340B process,
monitoring, and auditing
·· Covered entities must ensure compliance
with state Medicaid Rebate billing procedures
Table 3: Summary of Covered Entity Responsibilities with HRSA’s Medicaid Exclusion File
6. 888-580-8373 www.hcca-info.org 47
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FEATURE
File database. When a hospital has multiple
Medicaid billing numbers/NPI(s), it is possible
that the hospital can decide which billing
numbers (or facilities) dispense 340B-purchased
drugs and which facilities do not.
The GPO prohibition is an eligibility
requirement for DSH hospitals, children’s
hospitals, and free-standing cancer hospi-
tals. Hospitals and their off-site outpatient
clinic sites that are registered in the HRSA
database are subject to the GPO participation
prohibition and cannot purchase any covered
outpatient drugs through a GPO or other
group purchasing arrangement. Hospitals
will attest to compliance with this prohibition
annually at re-certification, and HRSA will
review procedures and monitoring mecha-
nisms to ensure compliance during an audit.
According to HRSA guidance, certain off-
site outpatient hospital facilities may use a GPO
for covered outpatient drugs, if those outpatient
facilities meet all of the following criteria:
·· Are located at a different physical
address than the parent;
·· Are not registered on the HRSA Database
as participating in the 340B program;
·· Purchase drugs through a separate
pharmacy wholesaler account than
the 340B participating parent; and
·· The hospital maintains records
demonstrating that any covered
outpatient drugs purchased through
the GPO at these sites are not utilized
or otherwise transferred to the parent
hospital or any outpatient facilities
registered on the HRSA database.5
Because the GPO prohibition is an eligi-
bility requirement, 340B hospitals found in
violation will be considered ineligible and
immediately removed from the 340B program.
Hospitals may also be subject to repayment to
manufacturers for the time period for which
the violation occurred.
Tips for 340B program audit readiness
Developing a compliance plan and continually
monitoring for compliance is an integral part
of the hospital 340B program. Some essential
oversight and monitoring components include:
·· Plan for ongoing education for all levels
of staff and physicians involved;
·· Review and update policies to include all
off-site clinics and contracted pharmacies;
·· Update work process flows and re-evaluate
the 340B standard operating procedures;
·· Assess the impact of organizational
changes (e.g., people, services, facilities)
to ensure the HRSA database is accurate;
·· Continually improve communication and
flow of data and information;
·· Develop a compliance plan that includes
a self-auditing process;
·· Conduct appropriate weekly, monthly,
and quarterly monitoring for the various
program elements;
·· Plan for an external audit annually;
·· Develop a community benefit plan
to ensure intent of 340B program is
supported; and
·· Make sure the hospital has a procedure
for when HRSA sends notification to
initiate an audit.
Defend the intent of the program with a plan
Consider developing a community benefit plan
in preparation for an HRSA audit to reduce the
risk of the program’s intent being questioned.
Scrutiny over the original intent of the 340B
program is increasing from lawmakers and
drug manufacturers as the program has been
experiencing unprecedented growth. There
are concerns about the program’s intent being
shifted away from helping the low-income and
uninsured populations to providing profit to
large hospital systems.
The 340B program has nearly doubled in
the number of participating sites since 2001
with 16,500 entity sites that were affiliated with
7. 888-580-8373 www.hcca-info.org 49
ComplianceToday March2015
FEATURE
approximately 3,200 unique 340B entities in
2011. A recent study examined 960 hospitals
and 3,964 affiliated clinics and found a differ-
ence in the population served from those sites
registered before 2004 from those sites regis-
tered after 2004. The researchers concluded
that when entities registered for the 340B pro-
gram after 2004, the communities served were
wealthier and had
higher rates of having
commercial health
insurance. Some have
questioned if hospitals
are strategically locat-
ing outpatient clinics
within more affluent,
insured communities
for the purpose of enhancing the profitability
of the participating 340B hospital without
advancing the core goals of the program.6
340B hospitals must meet certain eligibil-
ity requirements, as outlined above, based on
their DSH percentage, which implies that those
hospitals already do provide a disproportion-
ate share of uncompensated care. 340B DSH
hospitals continue to serve as the safety net for
Medicaid, low-income Medicare, and individu-
als not eligible to purchase health insurance.
Additionally, hospitals contend that the ACA
encourages hospitals to shift inpatient care to
outpatient settings, when appropriate, and be
more accountable with coordinating care out-
side the walls of the hospitals. This shift in the
marketplace is resulting in more hospital affili-
ations with more outpatient sites.
Currently under section 340B, there are no
provisions related to how a covered entity dis-
tributes savings. According to a Government
Accountability Office report, “…the purpose
of the program is to enable covered entities to
stretch scarce federal resources to reach more
eligible patients, and provide more compre-
hensive services.”7
HRSA plans to issue more
guidance concerning the 340B program within
the next several months, and this topic will
likely be discussed.
Hospitals should develop a community
benefit strategy to address the allocation of
savings, and how those monies will be used to
enhance outpatient services for the low-income
and uninsured populations. A community
benefit strategy is not required by HRSA, but
should be strongly
considered.
Summary
The 340B program
offers many benefits
for hospitals to ensure
their patients have
continued access to
outpatient services. The revenue gains associated
with the 340B program should be strategically
allocated throughout the hospital system to
target those patients with the greatest financial
need. Eligibility requirements for the program
pertain to the hospital and not the financial
status of the patients. Therefore, it is important
for hospitals to demonstrate the community
benefit of the 340B program on behalf of patients.
Hospitals must dedicate the proper
resources to make sure that all 340B policies
and procedures are adhered to, that oversight
occurs continually, and that all pharmacies
and outpatient clinics associated with the 340B
hospital are well informed and compliant with
the program requirements.
1. Public Health Service Act, 42 U.S.C. §256b.
2. Apexus: 340B Prime Vendor Program, informational sheet on the
340B Compliance for the C-Suite. Available at http://bit.ly/1yGBpEw
3. A.W. Mulcahy, C. Armstrong, J. Lewis, and S. Mattke: The 340B
Prescription Drug Discount Program, Origins, Implementation,
and Post-Reform Future. RAND Corporation, 2014. Available at
http://bit.ly/1C4xTU6
4. Apexus, 340B University training session, October 2014. Available at
http://bit.ly/1yGUqFg
5. Health Resources and Services Administration website at
www.hrsa.gov/opa
6. R.M. Conti and P.B. Bach: “The 340B Drug Discount Program:
Hospitals Generate Profits by Expanding to Reach More Affluent
Communities.” Health Affairs, 33 No.10 (2014): 1786-1792. Abstract
available at http://bit.ly/1zutdac
7. U.S. Government Accountability Office, Report to Congressional
Committees: Manufacturer Discounts in the 340B Program Offer
Benefits, but Federal Oversight Needs Improvement. GAO-11-836,
2011. Available at http://1.usa.gov/1yGBSGR
HRSA plans to issue more
guidance concerning the
340B program within the
next several months…