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.

1. The 340B Program and Implications
of the Mega Guidance
Kenneth Maxik
Director, Patient Safety & Pharmacy Compliance
October 14, 2015

2. Speakers
Kenneth Maxik, MBB, MBA, FACHE
Director, Patient Safety & Pharmacy
Compliance

3. Today's Objectives
1. Understand changes to the 340B program which
directly impact covered entity eligibility
2. Changes to the 340B program definition of a patient
3. Review the potential financial impact of the mega
guidance to covered entities

4. Disclosure
This presentation reflects experience with the topics at
hand and does not constitute legal advice. It also does
not reflect interpretation of guidance or agency
perspective.

5. Mega Guidance
What can you do?
• Submit comments on or before October 27, 2015
• www.regulations.gov (Search HRSA)
• Email: 340bguidelines@hrsa.gov
• Mail: Krista Pedley, Director, Office of Pharmacy Affairs
(OPA), Health Resources and Services Administration (HRSA)
5600 Fishers Lane, Mail Stop 08W05A, Rockville, MD 20857

6. Poll Question
How many hours a month in total
resources (Pharmacy and IT) do you
spend on 340B activities?

7. 340B Intent
“To stretch scarce Federal resources as far as
possible, reaching more eligible patients and
providing more comprehensive services”

8. GPO Prohibition
• Covered entities do not “obtain covered outpatient
drugs through a group purchasing organization or
other group purchasing arrangement”
• Covered outpatient drug defined by Section 1927(k) of
the Social Security act (42 U.S.C. 1396r-8(k))

9. GPO Prohibition Exceptions
• “Further, the limiting definition in section 1927(k)(3) to
exclude covered outpatient drugs for purposes of the 340B
Program only applies when the drug is bundled for
payment under Medicaid as part of a service in the settings
described in the limiting definition.”
• When GPO drugs are provided to an inpatient who’s status
is changed by a third party
• When drugs cannot be accessed

10. Patient Eligibility
“Under this proposed guidance, an individual will be
considered a patient of a covered entity, on a
prescription-by prescription or order-by-order basis, if all
of the following conditions are met:”

11. Patient Eligibility
1) The individual receives a health care service at a facility or
clinic site which is registered for the 340B Program and
listed on the public 340B database.
2) The individual receives a health care service provided by a
covered entity provider who is either employed by the
covered entity or who is an independent contractor for
the covered entity, such that the covered entity may bill
for services on behalf of the provider.
3) An individual receives a drug that is ordered or prescribed
by the covered entity provider as a result of the service
described in (2).

12. Patient Eligibility
4) The individual’s health care is consistent with scope of the
Federal grant, project, designation, or contract.
5) The individual’s drug is ordered or prescribed pursuant to
a health care service that is classified as outpatient.
6) The individual’s patient records are accessible to the
covered entity and demonstrate that the covered entity is
responsible for care.

13. Duplicate Discounts
Must notify HRSA whether covered entity will:
 Purchase and dispense 340B drugs to its Medicaid Fee
For Service patients (Carve-In) and bill the state
OR
 Whether it will purchase drugs for these patients
through other mechanisms (Carve-Out)

14. Duplicate Discounts
Medicaid Managed Care
 “The covered entity may make a different
determination regarding carve in or carve-out status
for MCO patients than it does for FFS patients. An
entity can make different decisions by covered entity
site and by MCO, but must provide to HRSA identifying
information of the covered entity site, the associated
MCO, and the decision to carve-in or carve-out.”
 Need mechanism for this to occur
NEW

15. Contract Pharmacy
 Compliance Area of Risk During Audits
 Covered Entity Should Evaluate Relationship and Make
Sure it Benefits the Covered Entity
 Contract Should Include ALL Locations Covered Entity
Plans to Use and ALL Child Sites

16. Contract Pharmacy
Program Integrity
 Contract Pharmacy Must be Registered
 Annual Audit of ALL Contract Pharmacies Through an
Independent Auditor
 Quarterly Compare Prescribing Records to Dispensing
Records: Review for Diversion and Duplicate Discounts
 Must report to HRSA any discrepancies

17. Maintenance of Records
Proposed to maintain records for five years:
 Covered Entity
 Child Sites
 Contract Pharmacy
(Including those whom lost eligibility)

18. Hospital Eligibility
 “The third category of hospital eligibility under section
340B(a)(4)(L)(i) of the PHSA includes a private
nonprofit hospital which has a contract with a State or
local government to provide health care services to
low income individuals who are not eligible for
Medicare or Medicaid.”
 “For the purposes of the 340B Program, such contract
should create enforceable expectations for the
hospital for the provision of health care services,
including the provision of direct medical care.”

19. Child Site Eligibility
“Medicare cost report demonstrating that:
 Each of the facilities or clinics is listed on a line of the
cost report that is reimbursable under Medicare
AND
 The services provided at each of the facilities or clinics
have associated outpatient Medicare costs and
charges.”

20. Conclusion
If the Mega Guidance is approved as written it will
result in:
 An overall decrease in cost savings to covered entities
 Increase the burden of record keeping and information
technology
Savings

21. Questions?
www.completerx.com
Knowledgeseries@completerx.com