11/12/2015 THE LATEST ON THE 340B FRONT AGENDA MEGA GUIDANCE RELEASED. Mega Guidance released. Audit update from HRSA. Maintaining compliance

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1 November 19, 2015 Connie Ouellette, Principal Carole Barker, Senior Consultant THE LATEST ON THE 340B FRONT berrydunn.com AGENDA Mega Guidance released Audit update from HRSA Maintaining compliance Areas of audit risk HRSA and manufacturer audits 2 MEGA GUIDANCE RELEASED August 28, 2015 Open for public comment for 60 days October 27, 2015 HRSA 340B Drug Pricing Program Omnibus Guidance released in Federal Register Comment period ended 3 1

2 MEGA GUIDANCE Patient definition Hospital eligibility Contract pharmacies Covered outpatient drug definition Medicaid Managed Care Reporting requirements Provides clarification but threatens 340B benefits 4 MEGA GUIDANCE: DEFINITION OF A PATIENT Current Definition Covered entity (CE) has established relationship with individual Proposed Definition Drug is ordered or prescribed by CE provider as a result of service Billed as outpatient service Patient record accessible and demonstrates CE responsible for care Issues: Physician administered drugs (chemotherapy, transfusion) Prescriptions written at inpatient discharge 5 MEGA GUIDANCE: DEFINITION OF A PATIENT Current Definition Individual receives health care (HC) services from HC professional employed or under contract or other arrangement with CE Proposed Definition Provider is either employed or services billed by CE 6 2

3 MEGA GUIDANCE: DEFINITION OF A PATIENT Current Definition Individual receives HC service consistent with grant funding or FQHC look-alike status Proposed Definition Individual s HC consistent with scope of grant, project, designation, or contract No change with this aspect of the definition of a patient 7 MEGA GUIDANCE COVERED OUTPATIENT DRUG DEFINITION (MEDICAID) Reaffirms limiting definition; Excluded if: The drug is provided as part of, or as incident to and in the same setting as the services listed (inpatient hospital, hospice, dental, outpatient hospital, NF or ICF, lab or xray, and renal dialysis services) And payment for drug is bundled. 8 MEGA GUIDANCE CONTRACT PHARMACIES 2010 contract pharmacy guidance recommended annual audits Proposed guidance further clarifies expectations of this: Provides for regular review and reconciliation of eligibility and help prevent diversion Using an independent auditor Separate mechanism for at least quarterly comparisons of CE s 340B prescribing records with contract pharmacy s 340B dispensing records 9 3

4 MEGA GUIDANCE OTHER CLARIFICATIONS/GUIDANCE Exceptions to GPO statutory prohibitions for separate non- 340B sites Explanation for any terminations to HRSA Notice and hearing process Record retention standard of not less than 5 years All breaches 10 MEGA GUIDANCE HRSA REQUESTED COMMENT Alternatives to demonstrating eligibility of off-site outpatient facility or site Types of information CE could submit to demonstrate compliance to re-enroll Medicaid Managed Care alternatives 11 WHAT ISN T IN THE GUIDANCE Discounted prices for uninsured patients Additional reporting on use of savings Limit on number of contract pharmacies Clearly addressing refills Materiality 12 4

5 AUDIT UPDATE from HRSA Panel of HRSA auditors at the 340B Coalition Annual Conference Areas of focus: Eligibility Duplicate discounts Diversion Risk-based audits (vs. target-based audits) Frequency of audits 13 HRSA AUDITS 70% 60% 50% 40% 30% 20% 10% 0% 2012 (51 Audits) HRSA AUDIT SANCTIONS 2013 (93 Audits) 2014 (93 Audits) 2015 (65 Audits) No Sanctions Repay Manufacturers Remove Contract Pharm Other 14 HRSA AUDIT RECOMMENDATIONS Pre-audit prep: In the words of HRSA, relax Follow instructions HRSA available for questions Onsite: Permitted staff Know your program Provide access HRSA will not provide guidance HRSA will not provide results 15 5

6 TRUE OR FALSE? A covered entity is prohibited from self-disclosing a material compliance problem if it is undergoing a HRSA audit? A covered entity is only required to initiate corrective action if the non-compliance is material? 16 MAINTAINING COMPLIANCE Have a robust compliance plan Establish internal controls 340B Oversight Committee Educate Perform regular internal audits Targeted audits if needed Findings and Corrective Action Plan (CAP) Materiality 17 GOOD TIPS Don t wait for an audit Don t assume anything External audits get some If audited, be mindful of scope-creep 18 6

7 Site registration Diversion prevention Duplicate discounts Contract pharmacies Documentation Other (GPO, orphan drugs) Could result in repayment or removal from the program 19 Site registration Does your registration on the OPA database match your 340B Program operations? 20 Diversion Are your software interfaces between systems mapped appropriately and maintained on a regular basis? EMR Patient Billing Inventory Contract Pharmacies Do your medical records properly document prescriptions, medications and place of service? 21 7

8 Duplicate Discounts Are your records in the Medicaid exclusion file correct? If your contract pharmacies carve in did you notify HRSA? 22 Contract Pharmacies Do you have a signed contract that meets HRSA requirements? Do you have auditable records that show proof of contract pharmacy oversight? 23 Documentation Do you have written policies and procedures? Do the policies and procedures define your 340B operations? Do you have auditable records that show 340B program oversight? Who is responsible for compliance of the 340B program? 24 8

9 HRSA AUDITS WHAT DOES THE TIMELINE LOOK LIKE? Pre-audit 4 weeks or longer Audit 1-3 days Audit follow-up Final audit report Up to 6 months 30 days to challenge findings If accept findings or have unsuccessful appeal, 60 days to submit a CAP Public letter to manufacturers 2 nd audit if repayment finding 25 MANUFACTURER AUDITS WHAT YOU NEED TO KNOW Manufacturer can audit you for diversion or duplicate discounts Looking for unusual purchasing trends (Be prepared to provide explanations, document) Audit plans are approved by OPA HRSA encourages collaboration between CE and manufacturer 26 CORRECTION ACTION PLAN REQUIRED ELEMENTS How problem has been fixed Process to ensure it doesn t happen again Implementation date Responsible individual Education strategy 27 9

10 REPAYMENTS Key Tips: Get approval before issuing refunds Be transparent Provide complete information (see sample) How to get WAC pricing Benefits of credits and rebills vs. AP check Time-barred or waiver responses frowned upon 28 RESOURCES Apexus Questions Templates Education - 340B University 340B Health HRSA 29 INTERESTED IN MORE? We are always available for your questions cbarker@berrydunn.com couellette@berrydunn.com berrydunn.com 10

THE LATEST ON THE 340B FRONT

THE LATEST ON THE 340B FRONT September 1, 2015 Connie Ouellette, Principal Carole Barker, Senior Consultant THE LATEST ON THE 340B FRONT berrydunn.com AGENDA Mega Guidance released! Audit update from HRSA Maintaining compliance Areas

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