340B University, presented by Apexus 7:00 – 8:00 am Networking Breakfast 8:00 – 8:30 am

Introductions & Welcome Chris Hatwig, MS, RPh, FASHP, President, Apexus Video Message from Krista Pedley, PharmD, MS, Director, HRSA Office of Pharmacy

Affairs

8:30 – 9:45 am

A: 340B Basics for Hospitals LOCATION: Auditorium B: 340B Basics for Non-Hospitals LOCATION: Art Gallery

Burnis D. Breland, MS, PharmD, FASHP, Manager of 340B Education & Compliance Support, Apexus

Rusol Karralli, PharmD, MS, Manager of 340B Education & Compliance Support, Apexus Donavan Smith, RPh, Director of Pharmacy Services, Wayne Community Health Center,

APhA Contractor, Peer-to-Peer Subject Matter Expert, and former HRSA 340B Leading Practice Site

9:45 – 10:00 am Networking Break 10:00 – 11:15 am

340B Implementation: A: Mixed Use: GPO LOCATION: Auditorium B: In-House Pharmacy LOCATION: Art Gallery C: Rural Hospitals LOCATION: Medical Board Room

Sarah Lee, PharmD, MS, Clinical Manager, Pharmacy Supply Chain, University of North

Carolina Hospitals

Donavan Smith

Gary Merchant, RPh, MBA, Administrative Director, New England Pharmacy Collaborative, Dartmouth-Hitchcock

11:15 – 12:00 pm

340B Pricing Moderator: Chris Hatwig Phil Matheny, Senior National Account Manager - 340B, Genentech, Inc. Andy Wilson, PharmD, FASHP, Vice President, 340B Solutions, McKesson

12:00 – 1:00 pm Networking Lunch 1:00 – 2:15 pm 340B Implementation:

Contract Pharmacy Rob Nahoopii, PharmD, MS, BCPS, Principal, Turnkey Pharmacy Solutions

2:15 – 3:00 pm 340B and Medicaid Jason Atlas, RPh, MBA, Manager of 340B Education & Compliance Support, Apexus

3:00 – 3:15 pm Networking Break with Snack 3:15 – 4:15 pm

340B Audit Panel Discussion

Moderator: Rusol Karralli Ross Thompson, MS, RPh, Executive Director of Pharmacy, Tufts Medical Center Phil Matheny

4:15 – 4:30 pm Networking Break 4:30 – 5:30 pm

340B Hot Topics

Moderator: Burnis Breland Rob Nahoopii Sarah Lee Donavan Smith Gary Merchant

5:30 pm Wrap-Up & Adjourn Chris Hatwig

Handout Page 1

Upon completion of the 340B University, participants will be able to:

1. Describe the history, intent and statutory principals of the 340B program.

2. Outline the process for addressing 340B policy and for maintenance of integrity of 340B Program participation.

3. Describe the role of the manufacturer, wholesaler, prime vendor and entity in 340B pricing integrity.

4. List methods to optimize the value of the 340B PVP’s products, services, and tools.

5. Identify the roles and responsibilities of 340B implementation and monitoring that may be managed by a pharmacy technician.

Link for obtaining CE credit: www.ProCE.com We offer CE credit to all Pharmacists and Pharmacy Technicians. Please turn to page 5 for directions and required information for obtaining CE credit. The Activity Code required when claiming the credit will be given at the end of the course. Please make sure to capture this information, as we are only allowed to give it out during the session. If you are in need of a certificate of attendance, please contact us at 340BUniversity@340BPVP.com. Accreditation and CE Credits

ProCE, Inc. is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education. ACPE Universal Activity Number 0221-9999-15-036-L04-P/T has been assigned to this live knowledge-based conference (initial release date 01-15-2015). This conference is acceptable for 8.0 contact hours (0.80 CEUs) in states that recognize ACPE providers. If there are any registration fees for this session, these registration fees cover the cost of CPE credit. Statements of credit can be received online at www.proce.com at the conclusion of the conference. Participants must complete an online program evaluation in order to receive pharmacy CE credit. Additionally, participants must attend the workshop in its entirety in order to receive pharmacy CE credit. No partial credit will be given. Faculty disclosure information will be included in the attendee program packet. Note: participants may not receive CE credit for this 8-hour activity if they have received CE credit for any of the previous 6-hour or 8-hour 340B University CE activities in the previous calendar year.

Handout Page 2

ABOUT APEXUS Apexus works with more than 25,000 healthcare providers across the U.S. to lower their costs for purchasing outpatient pharmaceutical products, allowing them to stretch their resources to serve more low-income and uninsured patients. Apexus serves as the exclusive contractor for the 340B Drug Pricing Program, managed by the Health Resources and Services Administration (HRSA). As the 340B Prime Vendor, Apexus negotiates significant discounts for branded and generic pharmaceuticals while working with providers to help them comply with 340B laws and rules. Apexus works closely with HRSA’s Office of Pharmacy Affairs to optimize the value of the 340B Drug Pricing Program.

OUR MISSION The mission of Apexus is to leverage our expertise and resources in delivering maximum value to 340B stakeholders, through the promotion of program integrity, compliance, and effectiveness of the 340B Drug Pricing Program.

DELIVERING VALUE Apexus serves the 340B program in four key ways:

1. Negotiating with hundreds of pharmaceutical companies to obtain savings on thousands of products and services.

2. Providing a national network of traditional and specialty distributors to enable 340B priced medications to reachparticipating hospitals and clinics.

3. Managing the national 340B call center, Apexus Answers for all stakeholders

4. Creating 340B University™, a HRSA endorsed training program to assist stakeholders in remaining fullycompliant with 340B rules and regulations.

PROTECTING INTEGRITY To protect the integrity of the 340B program, Apexus established the 340B University, an in-depth educational program for all stakeholders and operates Apexus Answers, a national call center available to answer stakeholder questions to support stakeholder compliance and program integrity. Apexus receives no government funds to perform any of these services.

340B UNIVERSITY Apexus created the 340B University to help covered entities understand 340B policy and maintain compliant pharmacy programs. The 340B University is attended by 340B entities, pharmaceutical manufacturers, 340B vendors and consultants as well as representatives from state and federal government agencies. In 2014, Apexus held 14 340B University training sessions in eight states, serving the educational needs of more than 3,000 attendees.

In 2015, Apexus is expanding its educational offering by incorporating 340B University OnDemand™, and in early 2016, a certificate program for individuals providing specialized 340B training to pharmacy staff and 340B consultants. The Apexus Advanced 340B Certificate Program™, which is beyond the scope of the prime vendor agreement, is an assessment-based certificate program for individuals and will provide eLearning modules with practical solutions focused on integrity and compliance.

APEXUS ANSWERS Apexus operates a high-quality call center for all 340B inquiries—accepting questions via phone calls, e-mail, and live chats. All stakeholders look to Apexus Answers for detailed and trusted compliance guidance, knowing that Apexus staff members are regarded as accessible 340B experts. Apexus recognizes the priority that HRSA places on program integrity, thereby recognizing its role to understand HRSA-created policy and effectively communicate it accordingly.

Handout Page 3

ABOUT THE 340B PRIME VENDOR PROGRAM The prime vendor program (PVP) was established by HRSA to provide a consolidated contracting and distribution process for covered entities. Since 2005, HSRA has contracted with Apexus to fill this role of public-private partnerships in administering the 340B program, and has recently extended the contract through September 29, 2019.

The PVP was established to increase the discounts already offered under Section 340B of the U.S. Public Health Services Act. As the prime vendor, Apexus negotiates sub-ceiling discounts on outpatient drug purchases and discounts on other pharmacy-related products and services for participating public hospitals, community health centers, and other safety-net health care providers that elect to join the program. Further, with recent changes to the 340B regulations, the program provides the only legal means for certain 340B-eligible hospitals to conduct group purchasing for outpatient covered drugs.

The Primary Role of the Prime Vendor • Establishes distribution solutions and networks that improve access to affordable medications• Negotiates sub-ceiling 340B pricing on branded and generic pharmaceuticals• Negotiates sub-WAC pricing on branded drugs for hospitals subject to the GPO Prohibition• Contracts for other value-added pharmacy-related products

Apexus is continually working to add distributors to the prime vendor network and negotiate a portfolio of drugs below the 340B ceiling pricing, so health care organizations participating in the 340B PVP will maximize additional savings, benefits, and value.

.

Handout Page 4

CE Activity Evaluation and Credit Instructions 

340B University™ October 8, 2015 ‐ New York, NY 

Conducted by Apexus, LLC 

1. To receive CE credit for this activity, you must complete the activity evaluation

online no later than Friday, November 6, 2015.

2. Read the CPE Monitor information below.

3. Visit www.ProCE.com/evaluation.

4. Click on the Evaluation button which is listed with the 340B University ‐ October

8, 2015 CE activity.

5. Enter the Event Code for this CE activity: __________________________ 

(you will need this code to access the evaluation).

6. Follow the online instructions to complete the activity evaluation and to receive

CE credit.

7. If you need assistance or have questions, please contact ProCE at 630.540.2848 or

via email at info@proce.com.

CPE Monitor – for Pharmacists and Pharmacy Technicians CPE Monitor is a collaborative program between the National Association of Boards of Pharmacy (NABP) and the Accreditation Council for Pharmacy Education (ACPE). This national e‐system is designed to store and authenticate data for completed CPE units for both pharmacists and pharmacy technicians. To create a new user account at the ProCE LMS (Learning Management System), you will need to enter 

your NABP e‐Profile ID and the month and day of your birthday (in MMDD format). For more information, click the hyperlink near the top of the ProCE evaluation web page (i.e., where you see Pharmacists and Pharmacy Techs: Click to access CPE Monitor and latest CE information). 

Note: It is ProCE policy that CE requirements (i.e. post‐test, if applicable for the specific CE activity, and evaluation) be completed within 30 days of the live activity date to ensure an on‐time submission to your CPE Monitor account. ProCE uploads completed CE activities to NABP/CPE Monitor once each week, usually on Mondays. 

ProCE, Inc. 848 W. Bartlett Road Suite 3E Bartlett, IL  60103 www.ProCE.com Phone: 630.540.2848 Fax: 630.540.2849 

Handout Page 5

FACULTY DISCLOSURE

STATEMENT

October 8, 2015 New York, NY

848 W. Bartlett Road Suite 3E Bartlett, IL 60103 630-540-2848 (phone) 630-540-2849 (fax) www.ProCE.com

As a sponsor accredited by ACPE, it is the policy of ProCE, Inc. to ensure balance, independence, objectivity and scientific rigor in all educational activities. A potential for bias may exist if a continuing education faculty member is affiliated with or has a financial interest in any organization(s) that may have a direct interest in the subject matter of the presentation. Situations involving potential bias are not inherently problematic or unethical, but the prospective audience must be made aware of the affiliation or financial interest. It is intended that any potential bias be identified openly so that the audience is provided full disclosure of the facts and may form their own judgments about the continuing education activity content.

The following individuals report having no relevant financial and/or commercial relationships: Sarah Lee, Gary Merchant, and Ross Thompson.

The following individuals report having a financial and/or commercial relationship: Jason Atlas is an employee of Apexus, LLC. Burnis Breland is an employee of Apexus, LLC. Christopher Hatwig is an employee of Apexus, LLC. Rusol Karralli is an employee of Apexus, LLC. Phil Matheny is an employee of Genentech. Robert Nahoopii is a Principal at Turnkey Pharmacy Solutions. Donavan Smith is the Chair of the Apexus Community Health Center Advisory Council. Andrew Wilson is an employee of McKesson.

Handout Page 6

340B University Page 1

Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Purpose: The purpose of the 340B Acronym Guide is to define common acronyms used in the 340B program.

Term Definition

340B ceiling price The maximum price drug manufacturers can charge for a 340B-purchased drug. 340B Ceiling Price =

Generic: AMP – URA

Brand: AMP – (AMP-Best Price) (if lower than AMP – URA) If AMP is rising faster that the rate of inflation an additional discount is owed:

AMP current – (CPI – U current/CPI – U baseline) * AMP baselineURAs:

Brand-name drugs ([single source] and [innovator]) = 23.1% Generic drugs (non-innovator multiple source drugs (N]) = 13% Hemophilia and pediatric drugs = 17.1%

340B covered entity (CE)

340B covered entities are facilities/programs listed in the 340B statute as eligible to purchase drugs through the 340B program and appear on the HRSA 340B Database.

340B covered outpatient drug (COD)

A covered outpatient drug, defined in 1927(k) of the Social Security Act (SSA), is summarized as: An FDA-approved prescription drug, an over-the-counter (OTC) drug that is written on a prescription, a biological product that can be dispensed only by a prescription (other than a vaccine), or FDA-approved insulin.

340B Drug Pricing Program (340B program)

Section 340B of the Public Health Service (PHS) Act (1992) requires drug manufacturers participating in the Medicaid Drug Rebate Program to sign a pharmaceutical pricing agreement (PPA) with the Secretary of Health and Human Services. This agreement limits the price manufacturers may charge certain covered entities for covered outpatient drugs. The resulting program is the 340B Drug Pricing Program.

340B-eligible patient In summary, an individual is a “patient” of a covered entity (with the exception of state-operated or -funded AIDS drug purchasing assistance programs) only if:

1. The covered entity has established a relationship with the individual, such that the coveredentity maintains records of the individual’s health care;

2. The individual receives health care services from a health care professional who is eitheremployed by the covered entity or provides health care under contractual or otherarrangements (e.g., referral for consultation) such that responsibility for the care providedremains with the covered entity; and

3. The individual receives a health care service or range of services from the covered entity thatis consistent with the service or range of services for which grant funding or federally qualifiedhealth center lookalike status has been provided to the entity. Disproportionate sharehospitals are exempt from this requirement.

An individual will not be considered a “patient” of the entity for purposes of 340B if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting. An individual registered in a state-operated AIDS drug purchasing assistance program receiving financial assistance under title XXVI of the PHS Act will be considered a “patient” of the covered entity for purposes of this definition if so registered as eligible by the state program.

Handout Page 7

340B University Page 2 Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Term Definition

340B ID A unique identification number provided by HRSA to identify a 340B-eligible entity on the 340B Database. This 340B ID is used to purchase 340B drugs.

340B Orphan Drug List (published by HRSA)

HRSA’s list of orphan drug designations used by 340B stakeholders to ensure compliance with the Orphan Drug Exclusion. The list is updated quarterly and is based on the list of orphan drug designations provided by the U.S. FDA, Office of Orphan Products Development. Covered entities may need to conduct additional analyses of the drugs provided on HRSA’s list to determine the appropriate drugs to exclude for 340B Program purposes. The list is posted at http://www.hrsa.gov/opa/programrequirements/orphandrugexclusion/index.html.

340B Prime Vendor Program (PVP)

HRSA is required by the 340B statute to establish a prime vendor program. This PVP is responsible for securing sub-ceiling discounts on outpatient drugs and discounts on other pharmacy-related products and services for participating 340B entities. The current 340B Prime Vendor Program (PVP) is managed by Apexus, through a contract awarded by HRSA. Apexus serves participants in three primary roles:

1. Negotiates sub-ceiling 340B pricing on branded and generic pharmaceuticals 2. Establishes distribution solutions and networks that improve access to affordable medications 3. Provides other value-added pharmacy-related products and services to its participants

5i drugs 5i drugs are drugs that are inhaled, infused, instilled, implanted, or injectable. This definition is pending a proposed CMS rule, and there may be an alternate AMP calculation for these drugs.

Accountable care organizations (ACOs)

Groups of doctors, hospitals, and other health care providers that come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program. HRSA has issued a policy release regarding 340B and ACOs.

Actual acquisition cost (AAC)

The net cost of a drug paid by a pharmacy. AAC may vary by container size and whether or not the drug was purchased from a manufacturer or wholesaler. AAC typically includes discounts, rebates, chargebacks, and other price adjustments, but excludes dispensing fees. States may define AAC differently for purposes of Medicaid reimbursement, and some states ask entities to determine or reimburse using an “estimated acquisition cost.”

AMP true-up An AMP true-up occurs when manufacturers restate their reported AMP for a specific time period and then refund any difference to 340B participating entities that had made purchases at the incorrect price.

Apexus A for-profit entity that is currently contracted as HRSA’s 340B Prime Vendor. Apexus has its own board of directors, including covered entity organizations and industry experts. The organization is self-funded through nominal administration fees from its contracted suppliers and is responsible for meeting the contractual requirements of the 340B Prime Vendor agreement. The current agreement expires in 2019.

Apexus Generics Portfolio (AGP)

The Apexus Generics Portfolio offers discounts on noncontract items for which entities currently pay wholesaler acquisition cost (WAC) pricing. Apexus provides the AGP for outpatient covered and noncovered drugs; this portfolio provides discounted contract pricing, which has no reference to the 340B ceiling pricing, although it can be lower than 340B. The APG is subcontracted to wholesalers and extended to Apexus participants.

Apexus PVP sub-340B Apexus PVP sub-340B pricing reflects pricing that is negotiated by Apexus with branded and/or generic manufacturers offering sub-340B pricing.

Apexus PVP sub-WAC Apexus PVP sub-WAC contracted pricing allows entities subject to the GPO Prohibition to order covered outpatient drugs in situations that would otherwise require the entity to purchase at WAC pricing. This pricing is negotiated without regard to 340B pricing and use of this pricing is GPO Prohibition compliant. Pricing is negotiated for outpatient covered drugs at sub-WAC or GPO-similar prices.

Handout Page 8

340B University Page 3 Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Term Definition

Apexus value-added As HRSA’s 340B Prime Vendor, Apexus is authorized to contract for other products and services required by the outpatient pharmacy environment. Other value-added contracts are for noncovered drugs such as vaccines, blood glucose monitoring supplies, prescription vials and labels, and discounts on service contracts such as pharmacy automation hardware and software.

Average manufacturer price (AMP)

AMP is the average unit price paid in the United States to the manufacturer by wholesalers for drugs distributed to the retail pharmacy class of trade, after deducting customary prompt-pay discounts (excluding direct sales to hospitals and health maintenance organizations, and to wholesalers where the drug is re-labeled under the distributor’s National Drug Code [NDC] number). Originally created as a benchmark by Congress to aid in calculating Medicaid rebates, several legislative changes have recently affected the definition of AMP. A CMS proposed rule is pending that addresses the AMP definition. Because 340B is calculated based on AMP, changes in this proposed rule will result in changes to the 340B program. The base AMP is the calculated AMP for the first full quarter after the market date of the drug.

Average sales price (ASP)

Originally created during drug pricing litigation to ensure accurate price reporting, ASP is the weighted average of all non-federal sales to wholesalers. ASP is net of chargebacks, discounts, rebates, and other benefits tied to the purchase of the drug product, regardless of whether it is paid to the wholesaler or the retailer. Excluded from ASP are sales that are excluded from the best price calculation. ASP is used as a basis of reimbursement for some Medicare Part B covered drugs and biologicals administered in hospital outpatient departments.

Average wholesale price (AWP)

AWP is a publicly available, national average of list prices charged by wholesalers to pharmacies. AWP is not defined in legislation, and does not account for discounts. It is sometimes referred to as a “sticker price,” as it is not an actual price paid by most purchasers. AWP was once used as a primary basis of pharmacy reimbursement, but there is a trend moving away from this practice.

Banking Banking occurs when an entity was initially registered in the HRSA 340B Database as participating, but for a period of time did not place 340B purchases. At some point later in time, the entity places large 340B replenishment orders based on 340B “banked” orders that theoretically could have been placed previously, but were not. HRSA has not authorized the use of a credit/rebill, banking, or similar process to re-characterize previous transactions. Covered entities participating in the 340B program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, the entity should first notify manufacturers and ensure that all processes are fully transparent, with a clear audit trail that reflects the actual timing and facts underlying a transaction. The covered entity retains responsibility for ensuring full compliance and integrity of its use of the 340B program.

Best price (BP) See Medicaid best price.

“Big 4” The federal government’s four largest purchasers of pharmaceuticals: Department of Veterans Affairs (VA), Department of Defense (DoD), Public Health Service (PHS), and Coast Guard.

Billing address The HRSA 340B Database uses the “billing address” field to denote the address verified as belonging to the covered entity. A billing address is not required to be a physical address; it can be a P.O. box or other mailing address.

Bundled sales An arrangement, regardless of physical packaging, under which the rebate, discount, or other price concession is conditioned on the purchase of the same drug, drugs of different types (that is, at the nine-digit NDC level), or another product or some other performance requirement. Example of such performance requirements include the achievement of market share, inclusion or tier placement on a formulary, or the resulting discounts or other price concessions being greater than those that would have been available had the bundled drugs been purchased separately or outside the bundled arrangement.

Handout Page 9

340B University Page 4 Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Term Definition

Carve-out/carve-in See Medicaid carve-out/Medicaid carve-in.

Centers for Medicare and Medicaid Services (CMS)

The federal agency charged with implementing and overseeing the Medicare and Medicaid programs.

Chargeback A chargeback is the method wholesalers use to request reimbursement from manufacturers for 340B discounts provided to entities for 340B covered outpatient drugs. Wholesalers purchase drugs from the manufacturer at wholesale acquisition cost (WAC), but sell to 340B entities at the contracted 340B price, which is much less. The wholesaler submits a chargeback request to the manufacturer to account for the difference.

Children’s hospital (PED)

These nonprofit hospitals serve individuals under 19 years old and have a CMS-issued 3300 Series Medicare Provider Number to designate them as Medicare certified children’s hospitals. Children’s hospitals must meet certain requirements, including a DSH adjustment percentage >11.75% and compliance with the GPO Prohibition, to be eligible to participate in the 340B program.

Consumer Price Index-Urban (CPI-U)

The Consumer Price Index-Urban (CPI-U) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. CPI-U is used in determining whether or not to apply a penalty to the manufacturer for the 340B ceiling price for single-source and innovator multiple-source drugs.

Contract pharmacy 340B covered entities may contract with a pharmacy or pharmacies to provide services to the covered entity’s patients, including the service of dispensing the entity-owned 340B drugs. To engage in a contract pharmacy arrangement, the entity and pharmacy (or pharmacies) must have a written contract that aligns with the compliance elements listed in guidance, and must list the contract pharmacy on the HRSA 340B Database during a quarterly registration period. Typically, a bill-to (entity)/ship-to (pharmacy) arrangement is used.

Corporate integrity agreement (CIA)

OIG negotiates CIAs with health care providers and other entities as part of the settlement of federal health care program investigations arising under a variety of civil false claims statutes. Drug manufacturers sometimes enter into CIAs as a result of pricing calculation settlements.

Critical access hospital (CAH)

A critical access hospital is a hospital certified to receive cost-based reimbursement from Medicare. This reimbursement is intended to improve the hospital’s financial performance, thereby reducing hospital closures. CAHs are certified under different, more flexible Medicare conditions of participation (CoP) than that of acute care hospitals, and must meet certain criteria to be designated as CAHs. For the purposes of 340B, CAHs must meet specific 340B eligibility criteria, including abiding by the orphan drug prohibition. CAHs are not subject to the 340B program’s GPO Prohibition.

Deficit Reduction Act, 2005 (DRA)

This federal legislation permitted manufacturers to include certain sales to 340B entities as nominal prices, and initially conferred 340B eligibility for children’s hospitals.

Dispensing fee A dispensing fee is the charge for the professional services provided in association with prescription dispensing. Most prescription payers reimburse on the basis of a benchmark of the drug cost (e.g., ASP, AMP, AWP, WAC, AAC) plus a dispensing fee.

Disproportionate share adjustment (DSH rate)

See Medicare DSH adjustment percentage.

Disproportionate share hospital (DSH)

Disproportionate share hospitals serve a significantly disproportionate number of low-income patients; as such, they receive adjustment payments to provide additional help. The primary method of qualification is based on the sum of the percentage of Medicare inpatient days and the percentage of total patient days attributable to patients eligible for Medicaid but not eligible for Medicare Part A. Among other requirements, DSHs must have a DSH adjustment percent >11.75% to be 340B eligible.

Handout Page 10

340B University Page 5 Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Term Definition

Disproportionate share hospital (DSH) inpatient pricing

The voluntary DSH inpatient contracts most GPOs offer their membership; the discount is usually ~2–3%. GPOs offer manufacturers this opportunity to put products on the DSH inpatient portfolio at a lower amount than what the manufacturer has given the GPO (i.e., in the GPO acute care file/and/or for products that the manufacturer chooses not to contract under the GPO acute care file).

Duplicate discount A duplicate discount, prohibited by 340B statute, occurs when manufacturers provide both a 340B discount on a drug AND pay a Medicaid rebate to the State on the same drug. A duplicate discount would occur if an up-front 340B discount is given and the state submits the same claim for a back-end Medicaid rebate. 340B covered entities are prohibited from causing a duplicate discount to occur.

Edit date The HRSA 340B Database uses the term “edit date” to denote the date that a 340B entity’s information was edited. Edits to the HRSA 340B Database can occur at any time.

Estimated acquisition cost (EAC)

The estimation of the price typically paid by entities for a particular manufacturer’s drug, using the most commonly purchased package size. Some Medicaid agencies are using EAC (plus a dispensing fee) as a basis for establishing reimbursement, especially for 340B entities. The exact method of calculating or projecting EAC may vary in different states.

Federal ceiling price (FCP)

The maximum price that a manufacturer may charge for a covered drug sold to the “big 4” federal entities engaged in providing health care services—Veterans Affairs, Department of Defense, Public Health Service (including Indian Health Service), and the Coast Guard . The federal ceiling price is effective for a calendar year, or the portion of a calendar year in which the covered drug is marketed.

Federal supply schedule (FSS)

The federal supply schedule involves large contracts through which federal customers can acquire more than 4 million products and services directly from more than 8,000 commercial suppliers. Products include pharmaceuticals and medical equipment and supplies. These contracts are available for use by all government agencies, including, but not limited to, VA medical centers, Department of Defense, Bureau of Prisons, Indian Health Service, Public Health Service, and some state veterans’ homes.

Free-standing cancer hospital (CAN)

A free-standing cancer hospital (CAN) is a nonprofit entity that is financially and administratively independent (not a part of a larger institution). CAN hospitals are exempt from Medicare’s prospective payment system. For 340B purposes, a CAN hospital must meet specific eligibility requirements, including a DSH adjustment percentage >11.75%, and compliance with the GPO Prohibition and Orphan Drug Prohibition.

Government Accountability Office (GAO)

The U.S. Government Accountability Office (GAO) is an independent nonpartisan agency that works for Congress. Often called the “congressional watchdog,” GAO investigates how the federal government spends taxpayer dollars.

GPO Prohibition The GPO Prohibition, per 340B statute, prohibits 340B participating disproportionate share hospitals (DSH), children’s hospitals (PED), and free-standing cancer hospitals (CAN) from obtaining covered outpatient drugs through group purchasing organizations. Upon enrollment, an entity official signs a form attesting that the hospital will comply with the GPO Prohibition. This applies to the hospital as of the date of listing on the HRSA 340B Database. Upon recertification of information on the HRSA 340B Database, the hospital official attests to compliance with the GPO Prohibition. A Policy Release about GPO was posted by HRSA in February 2013.

Group purchasing organization (GPO)

A group purchasing organization is an organization created to leverage the purchasing power of entities to obtain discounts from vendors based on the collective buying power of the GPO members. GPOs are common in the drug industry; the GPO may set mandatory purchasing participation levels from its members or be completely voluntary. Certain 340B participating hospitals (disproportionate share hospitals [DSH], children’s hospitals [PED], and free-standing cancer hospitals [CAN]) are prohibited from purchasing covered outpatient drugs from a GPO. The Apexus portfolio is not considered a GPO.

Health Industry Number (HIN)

A unique, universal identification number to be used by all trading partners when they communicate with one another via computer. HINs are randomly assigned, nine-character, alpha-numeric identifiers that are issued by the Health Industry Business Communications Council (HIBCC). Drug wholesalers and manufacturers typically use HINs to identify entities.

Handout Page 11

340B University Page 6 Glossary of 340B Terms

Apexus Answers Call Center | 340B Prime Vendor Program | 340B University | 888.340.2787 | www.apexus.com © 2015 Apexus. All rights reserved. 08112015 Version 09152014

Term Definition

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act, is a US law designed to provide privacy standards to protect patients' medical records and other health information provided to health plans, doctors, hospitals and other health care providers.

Health Resources and Services Administration (HRSA)

An agency of the U.S. Department of Health and Human Services, HRSA is the primary federal agency for improving access to health care services for people who are uninsured, isolated, or medically vulnerable. Comprising five bureaus and ten offices, HRSA provides leadership and financial support to health care providers in every state and U.S. territory. The Office of Pharmacy Affairs (OPA), the office responsible for administering the 340B program, falls under the Healthcare Systems Bureau within HRSA.

HRSA 340B Database The HRSA 340B Database is located here: http://opanet.hrsa.gov/opa/default.aspx. Entities, contract pharmacies and manufacturers submit information to HRSA’s OPA to include in the database. HRSA verifies this information and incorporates it into the database as appropriate.

In-house pharmacy A pharmacy that is owned by, and a legal part of, the 340B entity. Typically, in-house pharmacies are listed as shipping addresses of the entity and the entity owns the pharmacy license.

Innovator multiple source drug

All covered outpatient drugs approved under a new drug application (NDA), product license approval (PLA), establishment license approval (ELA), or antibiotic drug approval (ADA). A covered outpatient drug marketed by a cross-licensed producer or distributor under the approved NDA shall be included as an innovator multiple source drug when the drug product meets this definition.

Manufacturer A manufacturer (for 340B purposes) includes all entities engaged in: 1. The production, preparation, propagation, compounding, conversion, or processing of prescription

drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis; or

2. The packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. A manufacturer must hold legal title to or possession of the NDC number for the covered outpatient drug. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under state law.

“Manufacturer” also includes an entity, described in (1) or (2) above, that sells outpatient drugs to covered entities, whether or not the manufacturer participates in the Medicaid rebate program. For more information, visit ftp://ftp.hrsa.gov/bphc/pdf/opa/pricingagreement.pdf

Medicaid best price (BP)

Regarding the Medicaid Rebate Program, Medicaid best price is the lowest manufacturer price paid for a prescription drug, regardless of package size, by any purchaser. BP is reported to CMS and states, but otherwise is confidential. Included in BP are cash discounts, free goods that are contingent upon purchase, volume discounts, and rebates. Excluded from BP are prices paid by the federal government (e.g., prices to the “big 4”, 340B covered entities, federal supply schedule, state pharmaceutical assistance programs, depot prices, and nominal pricing to covered entities).

Medicaid carve-in 340B entities may elect to use drugs purchased at 340B prices to bill for Medicaid patients. This activity is termed a “Medicaid carve-in.” If an entity chooses to use 340B drugs to bill Medicaid it must indicate this on the Medicaid Exclusion File and list the appropriate Medicaid provider numbers or NPIs. Entities must inform HRSA whether they are carving in or out.

Medicaid carve-out 340B entities may elect to use non-340B drugs to bill for Medicaid patients. This activity is termed a “Medicaid carve-out.” Entities may choose to do this so they can receive fair Medicaid reimbursement (many states reimburse entities that use 340B for Medicaid patients on a cost + dispensing fee basis, as the dispensing fee is often not high enough to cover costs). Entities must inform HRSA whether they are carving in or out through the Medicaid Exclusion File.

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340B University Page 7 Glossary of 340B Terms

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Term Definition

Medicaid Exclusion File HRSA established the Medicaid Exclusion File to help support program integrity regarding the statutory prohibition of duplicate discounts. The Medicaid Exclusion File is maintained on the HRSA 340B website and contains the National Provider Identification (NPI) number or Medicaid Provider Number of entities that use 340B discounted drugs to bill Medicaid for their patients. Entities are expected to provide updated information to HRSA for incorporation into the Medicaid Exclusion File. The covered entity should be billing according to their designation on the Exclusion File. The covered entity should immediately inform HRSA of any changes. The Medicaid Exclusion File is used as follows:

All entities must inform HRSA whether they will use 340B drugs to bill for Medicaid patients.

Entities using 340B purchased drugs for Medicaid patients must inform HRSA of their NPI/Medicaid Provider Number(s).

Medicaid Agencies use the Medicaid Exclusion File to identify the NPI or Medicaid Provider Number of the entities purchasing at 340B prices.

The state Medicaid agency excludes from its rebate requests to manufacturers all claims associated with entities whose NPIs/Medicaid Provider Numbers are listed in the Medicaid Exclusion File.

Manufacturers use the Medicaid Exclusion File to verify denial of rebate payment on claims associated with entities purchasing at 340B prices.

Medicaid rebate net price

The price for covered outpatient drugs paid by state Medicaid programs, including the manufacturer rebates received by the states.

Medicare and Medicaid Extenders Act, 2010

This federal legislation clarified that children’s hospitals should continue to receive 340B prices on orphan drugs.

Medicare DSH adjustment percentage

An adjustment applied to hospitals that treat a high percentage of low-income patients. This adjustment results in an additional payment to these hospitals. Factors included in this adjustment are the sum of the ratios of Medicare Part A Supplemental Security Income (SSI) patient days to total Medicare patient days and Medicaid patient days to total patient days in the hospital. 340B covered entity hospitals must meet a certain threshold for disproportionate share adjustment percentage: >11.75% for DSH, PED, and CAN, and ≥8% for RRC and SCH.

Medicare Modernization Act, 2003 (MMA)

This federal legislation made it easier for rural hospitals to meet one requirement for 340B eligibility (reaching the 11.75% DSH adjustment threshold).

Mixed-use setting A hospital area that serves a mixed patient type of both inpatients and outpatients. Often these are facilities such as surgery centers, cardiac catheter labs, infusion centers, and emergency departments.

National Drug Code (NDC)

Drug products are identified and reported using a unique, three-segment number, called the National Drug Code (NDC), which serves as a universal product identifier for human drugs. FDA publishes the listed NDC numbers and the information submitted as part of the listing information in the NDC Directory, which is currently updated semimonthly. It is an 11-digit number; the first segment (5 digits) of the NDC indicates the manufacturer, the second segment (4 digits) indicates the drug product, and the third segment (2 digits) indicates the package size.

National Provider Identifier (NPI)

The National Provider Identifier (NPI) is a unique identification number for covered health care providers. Covered health care providers and all health plans and health care clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA. The NPI is a 10-position, intelligence-free numeric identifier (10-digit number).

Handout Page 13

340B University Page 8 Glossary of 340B Terms

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Term Definition

Nominal price A nominal price is any price less than 10% of the AMP in the same quarter for which the AMP is calculated. Only nominal price sales to 340B entities and other safety net providers, as specified by CMS, are excluded from the calculation of:

Average sales price (ASP) Best price (BP)

Average manufacturer price (AMP)

Non-federal average manufacturer price (non-FAMP)

Non-federal average manufacturer price is the average price paid to a manufacturer by wholesalers for drugs distributed to non-federal purchasers. Non-FAMP is not publicly available. 340B and Prime Vendor sub-ceiling prices are excluded from a manufacturer’s non-FAMP calculations.

Non-innovator multiple source drug

A non-innovator multiple source drug is a drug that is not originally marketed under an original new drug application, and whose therapeutic equivalent is available from multiple sources

Office of Pharmacy Affairs (OPA)

The Office of Pharmacy Affairs (OPA) is the HRSA office responsible for administering the 340B program.

Office of Inspector General (OIG), Department of Health and Human Services

The Office of Inspector General is an independent and objective oversight unit of the Department of Health and Human Services (HHS) to carry out the mission of promoting economy, efficiency, and effectiveness through the elimination of waste, abuse, and fraud. The OIG:

Conducts and supervises audits, investigations, and inspections. Identifies systemic weaknesses giving rise to opportunities for fraud and abuse in HHS programs

and operations and makes recommendations to prevent their recurrence.

Leads and coordinates activities to prevent and detect fraud and abuse in HHS programs and operations.

Detects wrongdoers and abusers of HHS programs and beneficiaries so appropriate remedies may be brought to bear.

Keeps the HHS Secretary and Congress fully and currently informed about problems and deficiencies in the administration of HHS programs.

The OIG has issued several reports relating to 340B.

Office of Regional Operations (ORO), Health Resources and Services Administration

The Office of Regional Operations (ORO) works through HRSA’s 10 regional offices to improve health care systems and America’s health care safety net, increase access to quality care, reduce disparities, and advance public health. The ORO conducts 340B audits, with oversight by HRSA.

Orphan Drug Act (ODA) The Orphan Drug Act (ODA) provides for granting special status to a product to treat a rare disease or condition upon request of a sponsor. The combination of the rare disease or condition and the product to treat it must meet certain criteria. This status is referred to as orphan designation. Orphan designation qualifies the sponsor of the product for the tax credit and marketing incentives of the ODA. The Affordable Care Act restricted newly eligible 340B entities (critical access hospitals [CAH], rural referral centers [RRC], sole community hospitals [SCH], and free-standing cancer hospitals [CAN]) from purchasing orphan designated drugs at 340B prices. In July 2014, HRSA issued an interpretive rule, pertaining to the statutory requirement for inclusion of drugs with orphan drug designations in the 340B drug pricing program.

Orphan drug “approved”

An orphan-designated product is considered “approved” by the U.S. Food and Drug Administration (FDA) Office of Orphan Products Development (OOPD) if it has received marketing approval for an indication that falls within the designated disease or condition.

Handout Page 14

340B University Page 9 Glossary of 340B Terms

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Term Definition

Orphan drug “designation”

The Orphan Drug Act (ODA) provides for granting special status to a drug or biological product (“drug”) to treat a rare disease or condition upon request of a sponsor. This status is referred to as orphan designation (or sometimes “orphan status”). For a drug to qualify for orphan designation, both the drug and the disease or condition must meet certain criteria specified in the ODA and FDA’s implementing regulations at 21 CFR Part 316.

Orphan drug exclusion As part of the Affordable Care Act, designated orphan drugs were excluded from the definition of covered outpatient drug for Critical Access Hospitals (CAH), Rural Referral Centers (RRC), Sole Community Hospitals (SCH) and Free Standing Cancer Hospitals (CAN); these entities can’t purchase designated orphan drugs at 340B prices. An Interpretive Rule issued in July 2014, clarifies how this section (340Be) will be implemented in these entity types only.

Orphan drug “opt in” 340B hospitals subject to the Orphan Drug Exclusion may choose to purchase orphan drugs used for a non-orphan indication under the 340B program, or “opt in.” If they make this choice, they are required to maintain audible records to demonstrate compliance with the Orphan Drug Exclusion.

Orphan drug “opt out” 340B hospitals subject to the Orphan Drug Exclusion that cannot or do not wish to maintain auditable records regarding compliance with the Orphan Drug Exclusion may “opt out.” If they make this choice, they will purchase all orphan drugs outside of the 340B program, regardless of the indication for which the drug is used.

Orphan drug “sponsor” The party that owns or has assigned rights to an orphan drug designation granted by the FDA. Sponsors listed on the FDA orphan drug list may not be the current manufacturer for an orphan drug if ownership or rights have been subsequently transferred.

Orphan drug “withdrawn”

An orphan-designated drug with marketing approval may have its marketing approval withdrawn for the designated use.

Outpatient clinic To purchase/use 340B drugs, a hospital outpatient clinic must:

Be an integral part of a 340B eligible hospital. Appear as a reimbursable clinic above line 96 on Worksheet A of the hospital’s most recently

filed Medicare cost report.*

Have patients that meet the criteria in the 340B patient definition guideline.

Submit to HRSA the most recently filed cost report to verify clinic eligibility. Be listed on the HRSA 340B Database as eligible to participate.

*Special requirements may apply to certain children’s hospitals (PED).

Patient assistance programs (PAPs)

Programs whereby drug manufacturers provide free or greatly subsidized medications to patients in need of assistance.

Patient Protection and Affordable Care Act (PPACA), 2010

Federal legislation that affected the 340B program in the following ways:

Expanded eligibility to include certain critical access hospitals (CAH), sole community hospitals (SCH), rural referral centers (RRC), and free-standing cancer centers (CAN).

Required HRSA to publish ceiling pricing and actual pricing data submitted by drug manufacturers.

Increased the Medicaid rebate percentage (from 15.1% to 23.1% for brand-name drugs; to 17.1% for clotting factors and pediatric drugs; and from 11% to 13% for generics).

Created integrity provisions for manufacturers, including the ability to impose fines on manufacturers for violations of 340B, increased price transparency, and new processes for dispute resolution and recovery of overcharges.

Created integrity provisions for entities, including civil penalties for providers knowingly violating the prohibition against diversion of 340B drugs.

Directed the Government Accountability Office (GAO) to prepare a 340B-related report to Congress.

Handout Page 15

340B University Page 10 Glossary of 340B Terms

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Term Definition

Penny price A term used to describe the price that results when the calculation for a 340B price yields zero. The manufacturers have been instructed to charge a “penny” for the smallest unit of measure of the product (often per tablet or per package). HRSA has published a policy release clarifying its penny pricing policy.

Pharmaceutical pricing agreement (PPA)

This agreement is required for manufacturers who have executed a Medicaid rebate agreement with CMS and voluntary for those who do not have a current Medicaid rebate agreement. The pharmaceutical pricing agreement must be signed by a corporate officer of the company (e.g., president, chief executive officer, or general counsel; signatures by vice presidents or directors of sales or marketing will not be accepted). A PPA remains in effect until terminated by either the manufacturer or the Secretary of HHS. It is not automatically terminated if a manufacturer terminates its Medicaid rebate agreement.

Pharmacy benefit manager (PBM)

An administrator of prescription drug programs. PBMs are responsible for processing and paying prescription drug claims, and often for developing and maintaining a formulary of drugs. PBMs also may contract with pharmacies and negotiate discounts and rebates with drug manufacturers. 340B entities often use a PBM in multiple contract pharmacies, but the use of a PBM is not required.

Physician-administered drugs

Drugs administered directly by a physician or a physician designee to a patient. This may occur in 340B entities such as federal qualified health centers (FQHCs), or it may occur in an outpatient clinic setting of a hospital.

Private label product Private label products are typically those manufactured or provided by one company for offer to customers/members under another company’s (GPO) brand. These products are typically the same (chemically) as the manufacturer’s labeled product, but just labeled under the offered company’s own branding.

Provider-based regulations or status

Medicare sets standards that “provider-based” departments or clinics must meet to enable the entity to bill Medicare a facility fee under the outpatient prospective payment system. Hospitals seek provider-based status for financial reasons.

Recertification HRSA is required by statute to conduct annual recertification of participating 340B covered entities’ information listed in the HRSA 340B Database. As part of this process, an authorizing official from each 340B entity certifies basic information about the entity and its 340B compliance. Covered entities with inaccurate information in the HRSA 340B Database run a high risk of being removed from the program.

Reclassification Reclassification (sometimes also called recharacterization) occurs when a credit–rebill process is used to reclassify information about a transaction after it initially occurred. Examples of reclassified information might include the purchasing contract used or the time of dispensing. HRSA has not authorized the use of a credit–rebill, banking, or similar process to recharacterize previous transactions. Covered entities participating in the 340B program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, covered entities should first notify manufacturers and ensure that all processes are fully transparent, with a clear audit trail that reflects the actual timing and facts underlying a transaction. The covered entity retains responsibility for ensuring full compliance and integrity of its use of the 340B program.

Replenishment (340B outpatient drug)

340B outpatient drug replenishment occurs when a non-340B drug is initially dispensed to a 340B eligible patient, and an entity later replaces the non-340B dispensed drug with 340B purchased inventory. The replaced inventory, although it was purchased at 340B prices, is no longer considered 340B inventory, as the title passes to the pharmacy after purchase.

Rural referral center (RRC)

A Medicare participating acute care hospital is classified as an RRC if it is located in a rural area and it meets specific criteria.

Shipping address The HRSA 340B Database uses the “shipping address” field to denote a location that may have 340B drugs shipped to it. This address must be a physical address (no P.O. boxes). A shipping address may include in-house pharmacies, entity-owned warehouses, central fill facilities, repackagers, and the like.

Handout Page 16

340B University Page 11 Glossary of 340B Terms

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Term Definition

Single source drug A covered outpatient drug that is produced or distributed under an original new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application (NDA). It also includes a covered outpatient drug approved under a product license approval (PLA), establishment license approval (ELA), or antibiotic drug approval (ADA).

Social Security Act, 1935 (SSA)

This federal legislation defines many key terms that apply to the 340B program, including covered outpatient drug and covered entity types (e.g., FQHC and different hospitals such as DSH, CAH, SCH)

Sole community hospital (SCH)

A hospital paid under the Medicare Acute Care Hospital Inpatient Prospective Payment System (IPPS) is eligible to be classified as an SCH if it meets specific criteria determined by CMS. Typically, these hospitals furnish short-term, acute care; are paid under the Medicare Acute Care Hospital IPPS; are not critical access hospitals (CAH); and are not paid under any other Medicare prospective payment system.

Split-billing software Split-billing software is used in settings where a 340B entity uses multiple wholesaler contracts for drug purchasing. This software helps the entity track and separate (“split”) the 340B-eligible dispensations from the non-340B dispensations, and ultimately builds purchase orders based on varied information.

Start date The HRSA 340B Database uses the term “start date” to denote an entity’s start date in the 340B program. Entity start dates are updated quarterly.

Telepharmacy Telepharmacy involves the use of electronic information and communication technology to provide and support the delivery of pharmacy services (including drug product and professional pharmacist services) to locations that are remote from a physical pharmacy.

Termination date The HRSA 340B Database uses the term “termination date” to denote the date that the 340B entity is terminated from the 340B program. As of this date, the entity may no longer purchase 340B or use drugs. Termination dates are updated on a quarterly basis.

Unit rebate amount (URA)

CMS computes this amount and state Medicaid programs apply utilization information to it in order to invoice drug manufacturers for rebates.

Vendor 340B entities may elect to purchase services, designed to simplify or optimize 340B participation, from a variety of organizations collectively called 340B vendors.

Wholesale acquisition cost (WAC)

The price paid by a wholesaler (or direct purchaser) in the United States for drugs purchased from the drug’s manufacturer or supplier. Publicly available WAC lists do not represent actual transaction prices and do not include prompt pay or other discounts, rebates, or reductions in price.

Wholesaler A drug wholesaler is an organization that provides drugs to entities, serving as the distributor between the drug manufacturer and the entity. Typically, states define the term “wholesaler,” so exact definitions may vary from state to state.

This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not

been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance

and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of their program integrity efforts.

© 2015 Apexus. Permission is granted to use, copy and distribute this work solely for 340B covered entities and Medicaid Agencies.

Handout Page 17

Purpose: The purpose of the 340B Acronym Guide is to define common acronyms used in the 340B program.

Acronym Definition

AAC Actual acquisition cost

ACA Affordable Care Act (abbreviation of PPACA)

ACO Accountable care organization

AGP Apexus Generics Portfolio

AHF AIDS Healthcare Foundation

AMCP Academy of Managed Care Pharmacy

AMP Average manufacturer price

APhA American Pharmacists Association

ASHP American Society of Health-System Pharmacists

ASP Average sales price

Avg AC Average acquisition cost

AWP Average wholesale price

BIN Bank identification number

BL Black Lung Clinics Program

BP Best price

BPHC Bureau of Primary Health Care

CAH Critical access hospital

CAN Free-standing cancer hospital

CAP Corrective action plan

CBO Congressional Budget Office

CE Covered entity

CH Consolidated Health Center Program (now combines 340B eligible entity types: federally qualified health centers (FQHCs), FQHC look-alikes, school-based programs, Health Care for the Homeless Program, Migrant Health Program, and Public Housing Primary Care Program entities)

CIA Corporate integrity agreement

CMS Centers for Medicare & Medicaid Services

COD Covered outpatient drug

CPI-U Consumer Price Index-Urban

DoD Department of Defense

DRA Deficit Reduction Act of 2005

Handout Page 18

Acronym Definition

DSH Disproportionate share hospital

DSH Rate Disproportionate share adjustment rate

EAC Estimated acquisition cost

EHB Electronic Handbook (HRSA)

FAR Federal Acquisition Regulations

FAR Final audit report

FASHP Federation of Associations of Schools of the Health Professions

FCP Federal ceiling price

FDA Food and Drug Administration

FP Family planning clinic (includes only Title X funded clinics)

FPL Federal poverty level

FQHC/ FQHCLA Federally qualified health center/federally qualified health center look-alike

FSS Federal Supply Schedule

FUL Federal upper limit

GAO Government Accountability Office

GPO Group purchasing organization

HCPCS Healthcare Common Procedure Coding System

HHS Department of Health and Human Services

HIBCC Health Industry Business Communications Council

HIN Health Identification Number

HIPAA Health Insurance Portability and Accountability Act of 1996

HM Comprehensive hemophilia treatment center

HMO Health maintenance organization

HRSA Health Resources and Services Administration

HTC Hemophilia treatment center

HV Ryan White Part C (formerly Title III)

IHS Indian Health Service

IPAP Institutional Patient Assistance Program

IPPS Inpatient Prospective Payment System

ISMP Institute for Safe Medication Practices

Handout Page 19

Acronym Definition

MA Medicare Advantage

MAC Maximum allowable cost

MCO Managed care organization

MMA Medicare Modernization Act

MMCO Medicaid managed care organization

MTM Medication therapy management

MUA Medically underserved area

MUP Medically underserved population

NABP National Association of Boards of Pharmacy

NACHC National Association of Community Health Centers

NCPDP National Council for Prescription Drug Programs

NDC National Drug Code

NFPRHA National Family Planning and Reproductive Health Association

Non-FAMP Non-federal average manufacturer price

NPI National Provider Identifier

NPRM Notice of proposed rulemaking

ODA Orphan Drug Act

OIG Office of Inspector General

OOPD Office of Orphan Products Development

OPA Office of Pharmacy Affairs

PAP Patient assistance program

PAR Preliminary audit report

PBM Pharmacy benefit manager

PCA Primary care association

PCN Processor code number

PDL Preferred drug list

PDP Prescription drug plan

PED Children’s hospital

PHCP Public Hospital Pharmacy Coalition

PHS U.S. Public Health Service

PHSA Public Health Service Act

Handout Page 20

Acronym Definition

PPA Pharmaceutical pricing agreement

PPACA Patient Protection and Affordable Care Act (Affordable Care Act)

PPO Preferred provider organization

PPS Prospective payment system

PSPC Patient Safety and Clinical Pharmacy Services Collaborative

PVP Prime Vendor Program

RRC Rural referral center

RWI Ryan White Part A (formerly Title I)

RWII Ryan White Part B (formerly Title II)

RWIID Ryan White Part B (formerly Title II) ADAP Direct Purchase

RWIIR Ryan White Part B (formerly Title II) ADAP Rebate Option

RW4 Ryan White Part D (formerly Title IV)

SCH Sole community hospital

SNHPA Safety Net Hospitals for Pharmaceutical Access

SPAP State pharmaceutical assistance program

SPNS Ryan White Part F (formerly Special Projects of National Significance)

SSA Social Security Act

STD Sexually transmitted disease clinic

TB Tuberculosis clinic (OPA acronym)

TrOOP True out-of-pocket cost/spending

URA Unit rebate amount

VA Department of Veterans Affairs

WAC Wholesale acquisition cost This tool is written to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of their program integrity efforts. © 2015 Apexus. Permission is granted to use, copy and distribute this work solely for 340B covered entities and Medicaid Agencies.

Handout Page 21

Take advantage of this opportunity to discuss lessons learned in your contract pharmacy arrangements. Focus on things you wish you had known prior to starting arrangements with contract pharmacies to ensure compliant operations and business practices that align with the intent of the program. If you don’t have a contract pharmacy, discuss considerations you have had, and learn from your peers. INSTRUCTIONS: Consider the following decision points discussed during the session.

LESSONS LEARNED DISCUSSION POINTS

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Handout Page 22

LESSONS LEARNED DISCUSSION POINTS

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Handout Page 23

LESSONS LEARNED DISCUSSION POINTS

Apexus would like to acknowledge the extensive contributions of the HRSA Peer-to-Peer Program in the development and review of this tool. This tool, written to align with OPA policy, is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by the Office of Pharmacy Affairs and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of their program integrity efforts. © 2015 Apexus LLC. Permission is granted to use, copy and distribute this work solely for 340B covered entities and Medicaid Agencies.

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Handout Page 24

entities can be chosen for either risk-based or targeted audits. all covered entity (ce) types are considered for risk-based audit selection.

Risk factors for a risk-based audit include characteristics that make your 340B

program more complex; these include the number of outpatient facilities, number

of contract pharmacies, and volume of purchases.

Targeted audits are triggered by allegations of violations of 340B requirements

at a specific covered entity; these are not limited to allegations that may

have been made by whistleblowers or manufacturers. OPA may also perform

a target audit to follow up on a covered entity’s corrective action plan.

HRSA AUDIT STEPS

pre-audit

• The covered entity’s authorizing official will receive the engagement letter from HRSA four to eight weeks prior to the audit. • The letter will specify which 340B

ID number has been selected for audit and that the scope of the audit will include any offsite outpatient facilities, contract pharmacies, and associated 340B ID numbers.

• The CE should identify a point person to communicate with the HRSA auditor who would be responsible for scheduling both the pre-audit preparation call with the auditor and the coordination of data requested by HRSA.

• The CE primary contact should coordinate a conference call with the institution’s audit team and the auditor to discuss the data request as well as any other questions the team may have for the auditor regarding the audit.

• The data request information is usually due to the auditor two weeks prior to the onsite audit.

• This is a good opportunity to ensure that you have provided 340B education to your audit team and applicable organization staff.

HRSA AUDITS OF ENTITIES

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Page 1

Pre-

Aud

it

Ons

ite A

udit

Post

-Aud

it Preliminary audit report submitted

internally by auditor

HRSA sends final report

Corrective action plan

Opening Meeting

Pharmacy staff interviews

Data sample review

Engagement letter

Data Request

HRSA Audits: Supporting Program Integrity

Handout Page 25

ONSITE AUDITHave your entire audit team available on call as resources.

Length of the onsite visit varies case by case based on the entity’s details.

OPENING MEETINGPharmacy tour and staff interviews• Ensure that your audit team is familiar with

the organization’s 340B policies and procedures, because this is an integral part of your audit.

• Clearly articulate your 340B processes and procedures to the auditor.

Data sample review • In preparation for the data transaction

tracers that occur during the onsite audit, it is recommended to determine audit tracer personnel based on 340B, pharmacy operations, and/or IT system knowledge prior to the audit. • Conduct tracer practice sessions

to determine the most efficient and rapid methods for retrieving information, including different outpatient locations, anesthesia records, and areas that may still use paper records.

• Perform transaction eligibility testing for mixed-use and contract pharmacy settings.

• Checklist:Documentation of a prescription or medication order in the medical record with associated date of serviceDocumentation that it was written by a qualified providerDocumentation that transaction derived from an eligible location Documentation that patient is in outpatient status

Page 2

ROLES IN AUDIT PREPAREDNESS: INTERNAL

Pharmacy leadership:

• Provides the policies and procedures related to the 340B program, including procurement, inventory, dispensing, replenishment, contract pharmacy (CP) oversight, and prevention of duplicate discounts.

• Provides components surrounding inventory reconciliation and purchases under each of the purchasing accounts.

• Provides information related to the CPs (including the list of all arrangements and documentation surrounding CP monitoring).

Authorizing officials:

• Identifies audit engagement letter from HRSA and contacts the primary contact for next steps.

IT department:

• Prepares a data set that lists all 340B prescriptions or medication orders in the six-month period designated by the auditor. This data set has a level of detail that includes NDCs, prescribers, NPI, date, and patient status, among others.

• It is recommended to share this responsibility with the organization’s IT department contacts even prior to an audit, so that they are familiar with the type of requirements for this data set and are able to aggregate it from various IT platforms and data sources in the event of an audit.

Government:

• Provides the most recently filed Medicare cost report (for hospital CEs only). • Provides a copy of the covered entity’s Medicaid provider enrollment

verification letter.• Provides contract with state or local government , if applicable.

Office of provider credentialing:

• Provides a list of all providers who are either employed by the covered entity or provide health care under contractual or other arrangements.

• It is recommended that the organization is able to locate the contracts for all of these eligible providers if requested during an audit.

• The organization should be familiar with how often the provider list is updated, how the list is utilized for eligibility verification, and includes that procedure in its 340B standard operating procedures.

HAVE AN AUDIT TEAMThe 340B program is an entire organization’s responsibility and is not limited to one department. It is best practice that an interdisciplinary team have oversight of an organization’s 340B program established prior to an audit engagement.Each of the following groups plays an integral role in the various steps of a HRSA audit.

Handout Page 26

HRSA AUDIT FOLLOW-UP

*If no corrective action plan within 60 days of that report, entity terminated

Corrective Action Plan (CAP)• Provide immediate remedy• Propose plan for periodic assessment, continuous monitoring,

and method to determine when CAP is completed• Identify implementation date• Devise internal 340B communication/education strategy• Provide entity contact person• HRSA to provide a general outline dependent on type of finding

TYPES OF SELF-AUDITIt is essential to have continuous self-auditing processes and have your internal audit team to evaluate the results of the self-audits to identify any systematic issues in your 340B program.

POST-AUDIT

• The auditor will not provide anydetermination on compliance orgaps in compliance at the end ofthe audit.

• Onsite findings will be consideredpreliminary, and a basis for review byHRSA’s Office of Pharmacy Affairs.

• Formal notification of the audit findings will be sent typically within 30 to 90 days.

• Potential outcomes:• No adverse findings• Identified areas for improvement • Adverse findings and a request

for a corrective action plan (CAP)• Failure to provide a requested CAP

in a timely fashion can result inremoval from the 340B program.

Apexus provides several tools and resources that facilitate self-auditing and support audit preparedness. These are available at www.apexus.com/solutions/education/340b-tools

Page 3

HRSA notice and hearing; entity has 30 days to review findings and HRSA’s request for Corrective Action Plan (CAP) (if applicable).

If agree with report: 60 days to submit corrective action plan*; If disagree with report: notify HRSA in writing within 30 days with supporting documentation.

Audit summary, public letter and corrective action, once approved, posted on HRSA website.

Results support education of covered entities.

Ongoing system audits• Pharmacy systems• Split billing systems• Billing systems

Workflow audits• Interview staff• Identify knowledge gaps• Capture opportunities

for systems failure (e.g.,borrowing)

Annual mock HRSA/ manufacturer audit• Policies and procedures• New/updated regulations• Organized communication• Billing Medicaid• GPO exclusion• HRSA website information

Monthly mini-audits• Drug specific• Patient specific• Location specific

Handout Page 27

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

October 8, 2015

340B UNIVERSITY™

New York Edition

Table of Contents

1 340B Basics…………………...........…. ……………... page 28

2A 340B Implementation: Mixed Use GPO……....…….. page 37

2B 340B Implementation: In-House Pharmacy……….... page 42

2C 340B Implementation: Rural Hospitals………........... page 46

3 340B Pricing…………………………………………… page 48

4 340B Implementation: Contract Pharmacy………… page 53

5 340B & Medicaid……………………………………… page 59

6 340B Audit Panel Discussion……………………….. page 63

7 340B Hot Topics……………………………………… page 67

340B UNIVERSITY LOGISTICS

© 2015 Apexus. Reproduction without permission is prohibited.

• Overview of Session

• What’s in your ParticipantPacket

• Agenda

• CE Credit (p. 5)

• 340B Glossary (p. 7)

• 340B Acronym Guide (p. 19)

• Discussion Worksheet &Tools (p. 23)

• Session Slides (p. 27)

• Evaluation Form

340B University Logistics

© 2015 Apexus. Reproduction without permission is prohibited.

• Please write down any questions you would liketo ask the speakers and hand them to anApexus staff member.

Ask Your 340B Questions Today

© 2015 Apexus. Reproduction without permission is prohibited.

• Introduce yourself to your seatmates

• Share your stories

• Ask your questions

• Turn your cell phones to silent

• Be ready to start the program when you hear the“340B News”

Networking Do’s & Don’ts

Handout Page 28

Table of Contents

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

340B Program Stakeholders

Apexus

Covered Entities

(hospitals and HRSA

grantees)

Manufacturers &

Wholesalers(Suppliers)

Federal Agencies &

Congressional Offices

Contract Pharmacies

Businesses &

Consulting Organizations

Hospital and other Trade Associations

Federal Grantees/Designees Certain Hospitals• Federally qualified health center

• Federally qualified health center look-alikes

• Title X family planning grantees

• State aids drugs 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

340B Eligible Entities

340B Price

• Calculated quarterly

Average manufacturer price (AMP)

– Medicaid unit rebate amount (URA)

340B ceiling price• Manufacturer submits data to CMS

Pricing Comparison

100%

79%

64%51%

42%

100%

50%

0%

PRIVATE SECTOR PRICING“BEST PRICE” 63%

AWP AMP GPO MedicaidRebate

340B VeteransAdministration

66%

ApexusPVP

340B Covered Outpatient Drugs

http://www.ssa.gov/OP_Home/ssact/title19/1927.htm

• Outpatient drugs• Over-the-counter drugs

(with a prescription)• Clinic administered

drugs• Biologics• Insulin

• Vaccines• Inpatient drugs• Drugs not directly

reimbursed• FDA doesn’t require

NDC

• HRSA 340B Database: Click here.

– September 2015

• 32,057 registered sites; 14,993 are non-hospital sites

• 16,571 unique contract pharmacies

HRSA 340B Database: Statistics

Handout Page 29

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

2. 340B PROGRAM INTENT

340B Intent

To permit covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.

H.R. Rep. No. 102-384(II), at 12 (1992)

“ “

Consider this…

Think of the last time you looked at the 340B savings you receive.

Have you ever written a statement in your policies and procedures

describing how your use of 340B aligns with the program intent?

Tool: 340B Benefit and Use of 340B Savings Tool

340B Benefit and the Use of 340B Savings Tool

• How would you collect this financial data?

• What sorts of things do entities consider“benefit”?

• When and how have entities used thisinformation?

Pearls

3. PARTICIPATION IN 340B

Handout Page 30

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

1. Ensure it has the capability to follow (andmaintain auditable records documentingcompliance with) program rules

2. Register on the HRSA 340B Database

3. Recertify with HRSA annually

To Participate in 340B, an Entity must…

• New entities, entity sites, contract pharmacies,Medicaid information

– 2 week registration periods, quarterly updatesmade to HRSA 340B Database

• Change requests: changes to existinginformation, rolling basis

Registration Process

Update Official October 1 January 1 April 1 July 1

Registration Period

July 1 – 15

October 1 -15

January 1 – 15

April 1 - 15

• HRSA uses it for validation of site information

• Electronic handbook (EHB) data incorporated aspart of recertification in February 2014

• Importance of EHB changes and timing,especially changes of scope

• Possibility of chargeback denial and/orwholesaler delivery issues if EHB doesn’t matchHRSA and entity’s wholesaler information

Electronic Handbook

• OSV audits contain a 340B component

• Visit consultants ask the CHC a series ofquestions related to 340B program management

• Questions include:– policies and procedures

– patient definition and patient eligibility

– Rx provided consistent with approved scope ofservices

– duplicate discount prevention

– contract pharmacy arrangements

– oversight and monitoring

Operational Site Visit (OSV) & 340B

• Documentation is requested to validate questionanswers

• Answers are forwarded to HRSA for review;documents examined for inconsistencies withquestion answers

• HRSA requests additional information orclarification from covered entity if needed;follows up as required

Operational Site Visit (OSV) & 340B Consider this…

An entity has received multiple HRSA grants that are eligible for 340B

registration (Ryan White, FP Title X, TB, and 330 CHC).

Which grants should be registered on the HRSA 340B database if the

sites want to use 340B?

Handout Page 31

Non-Hospitals Only

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

• Entities DO NOT need to log into the 340Bdatabase

• The 340B ID is the most reliable search criteria

• Plan ahead for timing of EHB updates and impactof 340B registration

• Review 340B policies for upcoming OSV site visit

Pearls Hospital Cost Report

S2Hospital

ownership/control on

line 21

Part A

340B eligibility if

line 33 shows DSH%

>11.75 or ≥8%

depending upon hospital

type

E340B-eligible

clinics should be

reimbursable

ADate and time of

eligibility signature

block

SShows

outpatient charges

C

• Entities DO NOT need to log into the HRSA 340B Database

• All links referenced on the homepage areaccessible without a username & password

• The 340B ID is the most reliable search criteria

Pearls Recertification

• Entities are required to recertify information inthe HRSA 340B Database annually

• HRSA sends a notification email to authorizingofficial and primary contact

• HRSA sends username/password only to theauthorizing official

• The authorizing official performs therecertification online

• Database entry is complete, accurate, correct

• Entity meets 340B eligibility requirements

• Compliance with 340B requirements/restrictions

• Maintenance of auditable records

• Systems in place to ensure compliance

• Contract pharmacy compliance, entity obtainssufficient information

• Entity contacts HRSA for any breach of the above

• Entity acknowledges possibility of payment to manufacturersfor failure to notify HRSA in timely fashion

Recertification Statements

• Make sure your authorizing official knows the email iscoming, knows what to do with it, and DOES NOTdelete it

• If you have a material breach of non-compliance, youmay still recertify

• Recertify early in the window so that you have time tocorrect issues if they arise

Pearls

Handout Page 32

Hospitals Only

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

4. THE PRIME VENDOR PROGRAM

Apexus Focus

340B Prime Vendor Program

CONTRACTING340B University

340B University OnDemand

EDUCATION ASSISTANCEApexus Answers

Call Center

Contracting: 340B Prime Vendor

Negotiate sub-ceiling 340B pricing on brand

and generic pharmaceuticals

Negotiate sub-WAC pricing

on brand and generic

pharmaceuticals for entities

subject to the GPO Prohibition

Vaccines, blood glucose

monitoring supplies,

point-of-care test kits, pharmacy hardware and

software automation

Establish wholesale distribution

networks that improve access

to affordable medications:

national, regional, specialty

DistributionValue AddedSub-WACSub-Ceiling

• Participating in the 340B PVP is fast, easy and can be completed online

• You must be actively registered with HRSA’s Office of Pharmacy Affairs and have a 340B ID Number

• Upon validation of the PVP agreements and receipt at Apexus by the 15th of the month, agreements are activated on the 1st of the following month: All completed agreements received after the 16th of the month are activated on the first of the next full month

– You will receive an email message welcoming you to the PVP, notifying you of your PVP effective date, and providing instructions to register for our secure Web site

– We’ll send a separate e-mail message to your distributor(s) – and copy you – so PVP pricing can be loaded

Registration in the Prime Vendor Program

• Apexus contracts and pricing are announced viaContract News Brief; more info on web site

• Monitor contract announcements to recognizesignificant value

• May require formulary evaluation for genericinterchange or therapeutic interchange

• Moving market share delivers value, increasesadditional Apexus contract opportunities

Apexus Contracting Opportunities

• Apexus contract for cyclophosphamide injection– Multi‐source (generic) injectable product

– Contract commitment by Sandoz

• DSH oncology infusion center failed to convert– Missed $ 9,797 savings in one month

– Pricing may change but Apexus contract will stay lowerpriced vs competitors

• DSH did not monitor contract notices; opportunity was identified and converted immediately but after several months of lost savings

• What contract opportunities are you missing?

Contracting Case Study

Handout Page 33

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

• Flu vaccines: use Apexus for outpatients

• IUDs and steep sub‐340B oral contraceptive pricing

• Biosimilars: filgrastim‐sndz coming soon

• Plasma products: IVIG, blood factors

• Contrast media: radiology and MRI

• Generic multi‐sourced products:– Cyclophosphamide

– Bivalirudin

– Leucovorin

• Hundreds of brand name drugs at sub‐340B pricing

Examples of Contract Opportunities Prime Vendor Program Participant Website

Prime Vendor Program Participant website

• New Contracts

• Price Changes

• Download the PVP Contract Catalog

• Data and analytics for your organization

– Savings and Opportunities

– Best Buys

Prime Vendor Program Participant Dashboard

• Review contracted savings

• Evaluate product conversion opportunities

Prime Vendor Program Participant Dashboard

• Quickly and easily identify quarterly price changes andPenny Buys

Prime Vendor Program Participant Dashboard

Handout Page 34

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

340B University OnDemand Education Assistance: Apexus Answers

• Apexus Answers is verified and endorsed by HRSA

• Staff in constant communication with HRSA toensure messaging is consistent

• FAQs available on apexus.com

• Average monthly interactions ~1,500-2,000

• Tiered levels of response: can handle from basicto complex

5. 340B PROGRAMOVERSIGHT/COMPLIANCE

Why 340B is like an onion…

Policy Releases

Guidelines

Regulations

Statutes

1. Duplicate discount prohibition

2. No diversion (patient definition)

3. Certain hospitals only

– Group Purchasing Organization (GPO) Prohibition

– Orphan drug exclusion

Major 340B Compliance Areas How do you interpret a covered outpatient drug?

Handout Page 35

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

340B price Medicaid rebate

Duplicate Discount Prohibition Preventing Duplicate Discounts

© 2015 Apexus. Reproduction without permission is prohibited.

• Records of individual’s care• Health care services, health care professional

– Employed by, under contractual or otherarrangements (referral)

• Entity has responsibility for care• Service received is consistent with funding or

designation status (hospitals exempt)• Services must be more than dispensing• AIDS Drug Assistance Program (ADAP) exception

Patient Definition

• Applies to:– Disproportionate share hospitals– Children’s hospitals– Free-standing cancer hospitals

• Such hospitals:...will not participate in a group purchasing

organization or group purchasing arrangement for covered outpatient drugs as of the date of this listing on the HRSA website.

HRSA GPO Certification

GPO Prohibition

“ “

Orphan Drug Exclusion

• Final rule published July 23, 2013, effective October 1, 2013

• Free-standing cancer hospitals, rural referral centers, sole community hospitals, and critical access hospitals

• Excluded from 340B: drugs used for the indication for which they received an orphan designation but not when the drug is used for indications independent of that designation

• Orphan drug list: click here

Orphan Drug Exclusion

February 2015October 2014

PhRMA files lawsuit challenging HRSA’s

interpretive rule

HRSA posted list of manufacturers that

are not offering 340B pricing for their

designated orphan drug products

August 2014Judge does not

invalidate interpretive guidance; PhRMA

will have to file a new suit in order to

challenge the interpretive guidance

Handout Page 36

Hospitals Only

Hospitals Only

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

Apply It: Take Action

1. Apply the brief tool 340B Compliance Self-Assessment Policy to your entity type

2. Review FAQs on specific policy topics for more information

3. Contact Apexus Answers to help you resolve any questions or concerns

• Check your 340B standard operating procedures to make sure they reflect your entity’s operations

• If a new location/contract pharmacy are added to the HRSA 340B Database, remember the quarterly deadlines

• Remind leadership they are not required to log into the HRSA 340B Database for change forms or to view profiles

Tips for Pharmacy Technicians

Takeaways

1. The intent of 340B: to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services

2. Major 340B stakeholders: federal government, certain drug manufacturers, certain covered entities, 340B Prime Vendor Program (managed by Apexus)

3. Covered entities must register on the HRSA 340B Database; once a year they must recertify accuracy of HRSA 340B Database information

“ “ 4. The 340B Prime Vendor Program provides: – Contracting (contracting with distributors

and suppliers)– Education and tools (340B University)– Assistance (Apexus Answers Call Center)

5. Covered entities must maintain auditable records:– Only patients of the covered entity receive

340B drugs– A Medicaid rebate is not paid on a 340B drug– All eligibility criteria are met

Takeaways

Question

340B IMPLEMENTATIONMIXED-USE: GPO

Handout Page 37

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

• Mixed-use setting in a nutshell

– In a mixed-use area, the entity dispenses/administers medications to both inpatients and outpatients from the same location (pharmacy)

– Examples

• Cardiac cath lab, one-day surgery, emergency department, endoscopy

Overview: Mixed-Use

• Applies to:– Disproportionate share hospitals– Children’s hospitals– Free-standing cancer hospitals

• Such hospitals:...will not participate in a group purchasing

organization or group purchasing arrangement for covered outpatient drugs as of the date of this listing on the HRSA website.

HRSA GPO Certification

GPO Prohibition

“ “

• 340B is limited to outpatients• Patients meet patient definition

– Patient status = outpatient (at time of service)

– Prescriber = eligible prescriber

– Location of service = reimbursable on cost report, registered on HRSA 340B Database (if required)

• No GPO use for covered outpatient drugs for DSH/PED/CAN

• No duplicate discounts on Medicaid transactions

Entities Must Ensure

• There is one physical drug inventory serving both inpatients and outpatients

• This software merges data from patient visits (date/time of service, patient status, prescriber, location/clinic, Medicaid status) to help split orders into the right buckets

Split-Billing Software

Accumulator: GPO

Inpatients

Accumulator: 340B

340B eligible outpatients

Accumulator/Default: Non-GPO/WAC

340B ineligible outpatients

Medicaid carve-out

Lost charges

Clinics within 4 walls but not 340B

eligible

In-house pharmacy open to public

Accumulators and Eligibility Question

What data do you feed into your split-billing software?

What is the source of the data?

Handout Page 38

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

InpatientGPO

• GPO Contract• DSH Inpatient GPO

Contracts (DSH only)• GPO or Wholesaler

Generic Source Program

• Individual Hospital Agreement

Wholesaler Account Setup-DSH/PED/CAN with GPO Prohibition

Outpatient(340B eligible)

340B

• PHS/340B• PVP Sub-340B

(if enrolled in PVP)

• Apexus Generic Portfolio (AGP) (if enrolled in PVP)

• Individual Hospital Agreement (single entity only)

Outpatient(not 340B eligible)

Non-GPO/WAC

• WAC Pricing• PVP Sub-WAC

(if enrolled in PVP)

• Apexus Generic Portfolio (AGP) (if enrolled in PVP)

• Individual Hospital Agreement (single entity only)

Update: Account Load Options

GPO Prohibition and Wholesaler Non-GPO Account Load Options

• The following situations are not GPO-compliant contracting practices:

- An individual DSH accessing contracts executed by a network (i.e. IDN, ACO, etc.) in which it is a member

- A wholesaler’s generic source program (unless offered as a subcontracted solution to the Apexus Generics Source portfolio)

- A manufacturer extending a discounted price to a group of covered entities (subject to the GPO prohibition) through a wholesaler, other third party or group purchasing arrangement, that is not supported by an individual contract between the 340B covered entity and the manufacturer. Such agreements should be reproducible for review during an audit of compliant 340B.

Contracting: Avoid These Pitfalls

• GPO private label products

• IVIG

• Drug shortages

GPO: Special Situations

Answer these questions

How do you purchase outpatient blood products, contrast media and gas?

Are you purchasing GPO private label products?

Verify that all covered outpatient drugs are purchasedfrom the correct accounts

340B Non-GPO/WAC

Maintaining Compliance

1. What outpatient accounts do you have?

2. How do you purchase drugs for ineligible outpatients?

Two Key Questions HRSA Will Ask

Handout Page 39

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

Question

What is your biggest challenge regarding

record-keeping/inventory management?

• Steps to take

• Pitfalls to avoid

• Example

Mixed-Use Inventory/Record Keeping Challenges

Tool: Minimize WAC Exposure

Minimize WAC Exposure

• A few strategies to minimize WAC exposure

Next Up

Q: Can a hospital subject to the GPO Prohibition use a GPO for drugs that are part of/incident to another service and payment is not made as direct reimbursement of the drug (“bundled drugs”)?

Strategy #1: Covered Outpatient Drug

A: If the entity interprets the definition of covered outpatient drug referenced in the 340B Statute and decides that drugs do not meet this definition, a GPO may be used for drugs that are not covered outpatient drugs. The decision the entity makes should be defensible, consistently applied in all areas of the entity, documented in policy/procedures, and auditable.

In certain off-site outpatient hospital facilities that meet all of the following criteria:

Strategy #2: GPO “Only” Clinics

1. Are located at a different physical address than the parent;

2. Are not registered on the HRSA 340B Database as participating in the 340B Program;

3. Purchase drugs through a separate pharmacy wholesaler account than the 340B participating parent; and

4. 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 340B Database.

Handout Page 40

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

• Expired/returns-return company policy, entity policy

• Waste/lost charges

– Multi-dose vials, insulin

– Mixed product, but patient doesn’t get dose

Strategy #3: Waste/Lost Charges

• Charge code to the correct NDC

• Charge quantity to the package size– Procrit, e.g.

• Billing unit: 1000 units

• Vial size: 20,000 units/1 mL vial

• Package size: 4 vials per box

• How many billing units per package?

– 1000

– 20

– 80

Strategy #4: Charge Code to NDC

• Replenishment model

– New products purchased as a new NDC will begin a new replenishment

– New NDC must be purchased at WAC since no accumulation available

– WAC should be used the first time an NDC is purchased by the entity, and anytime the quantity needed exceeds the 340B accruals available

– You may purchase on your 340B account as soon as you have enough accumulations to make a purchase

• In 340B-only areas (not replenishment model), not necessary to purchase new NDCs under WAC

WAC Purchase for New NDC

• Stay up to date with Apexus sub-WAC price changes; sign up for Contract News Brief

• Educate your colleagues and identify ways to capture lost charges and expired drugs, to avoid unnecessary WAC exposure

• Ensure the CDM to NDC crosswalk stays updated

Tips for Pharmacy Technicians

1. Carefully consider which options you elect if using split billing software

2. Take steps to minimize your WAC spend

3. Load correct contracts, including Apexus sub-WAC pricing

4. Define: inpatient, outpatient

5. Interpret: covered outpatient drug

6. Account: for waste and lost charges

Takeaways Question

Handout Page 41

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

340B IMPLEMENTATIONIN-HOUSE PHARMACY

Pharmacy Model Benefits

In-House, Owned Pharmacy Contract Pharmacy

Generally lower average operating costs (average $10-15 per prescription) afterstart up costs are covered.

Less staffing resources needed; needpharmacy point person and for monthly reporting and compliance.

Pharmacy staff can contribute as part of patient care team, improving patient outcomes and meeting organizational goals.

Less risk for low volume clinics or those with very high rate of uninsured patients.

Achieve higher capture rates for pharmacy; patients can be very loyal.

Low start up costs: no need for infrastructure development or licensing.

Able to keep uninsured costs very low. No building space requirements.

Pharmacy can be community resource; retail business can increase business of pharmacy and clinic.

Use negotiated contracts of pharmacy partner; do not need to negotiate your own.

Pharmacy Model Challenges

In-House, Owned Pharmacy Contract Pharmacy

Higher start up costs. Higher ongoing operational costs and potential need for 3rd party administrator, too.

Requires space within or immediately proximate to entity site.

Added cost for quarterly drug reconciliation costs.

Greater administrative resources required; need to develop space,get licensed and hire staff.

Less opportunity for clinical integration of pharmacy services and improved patient outcomes.

Note: Pros and Cons are offered as generalizations and are not mutually exclusive. Entities can have owned and contracted pharmacy programs.

• What are the entity goals of creating a pharmacy program?

• Would your volume and payer mix support an in-house pharmacy?

• Consider types of clinical services offered or special populations served by entity

• Would your community benefit from a retail pharmacy?

In-House Pharmacy Considerations

• 340BAccount

• RetailAccount

Wholesaler

• 340B Inventory• Retail Inventory

In-House Pharmacy

• 340B Patient• Retail Patient

Patient

• 340B Provider• Retail Provider

Provider

• 340B Billing• Retail Billing

Billing

In-House Pharmacy Operation

Planning, Design,

Construction

Licensing and Accreditation

Inventory Model

Choices

Wholesaler Negotiations

Insurance Contracting

Carve-In vs. Carve-Out

Pharmacy Operating System

Pharmacy Staffing Plan and Training

Policies and Procedures

Start-Up Steps

Handout Page 42

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

Detail strategies to achieve growth rate

Educating patients and prescribers to

use pharmacy

Sales and Marketing

Added value services for clients

Tracking and reporting on

progress

Strategies for Growth:12-month Start-Up Plan

Staffing Considerations

Manage Accounts Receivable

Maximize Technology & Workflow

Regulatory Compliance Plan

Optimize SavingsControl Costs

In-House Pharmacy Keys to Success

Investments to increase pharmacy efficiency and improve 340B compliance

• Pharmacy operating system

• Robotic dispensing devices

• Barcode scanning through dispensing and check-out processes

• Interactive voice / text response

• Telepharmacy

Maximize Technology & Work Flow

Perpetual Inventory System with Par Levels

Monthly unused drug report

Quarterly drug level check

Labor as a percent of sales

Cost of Goods

Cost of goods reviewed at every order Quarterly price changes Apexus 340B

Prime Vendor Program

Control Costs

• Eligibility and Registration

– A grantee has a new clinic that opens March 15th

– It must be added to the electronic handbook prior to registration in the HRSA 340B Database.

• What steps have to be taken before the clinic can begin using 340B?

Compliance Considerations

• Referral Prescriptions

– If we refer a patient to an outside clinic, can we fill their prescriptions from our 340B clinic?

Compliance Considerations

Handout Page 43

© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

– Demonstrating “Responsibility for Care”

• Some examples of auditable records for a 340B prescription resulting from a referral prescription:

Compliance Considerations

Methods to help demonstrate responsibility for careOutgoing referral from covered entity

Incoming notes from outside provider

Shared EMR access with outsideprovider

Referring returning patient for follow up encounter to review outside care

Covered entity maintains a list

of providers who could prescribe

at non-entity location

Pharmacy should have means to verify entity address of floaters• Use provider address

check • Without means to verify

floater’s address - NO 340B drugs should be used

Pharmacy should have means to verify entity address of floaters• Use provider address

check • Without means to verify

floater’s address - NO 340B drugs should be used

Compliance Considerations

• Eligible providers who are “floaters”

Compliance Considerations

Real-time access to patient and

provider eligibility information

Eligibility verification at

filling

Right inventory to right person

Retail inventory

Documentation of outgoing referral

and incoming

Specialist prescriptions

Do you have responsibility

for care?

Hospital prescriptions

Patient and provider eligibility

Duplicate discounts

Billing for all prescription

Inventory to match

dispensations

Matching return-to-stock

to correct account

Compliance and Business Reporting

End of month reporting:• Weekly• Monthly• Quarterly

Case Studies

A patient came to our pharmacy with prescriptions from a local hospital discharge. Can we fill these prescriptions with 340B drugs?

1. Is the person an active patient of the health center?

2. Is your health center provider medically responsible for the care related to these prescriptions?

3. Does your health center have a contract with prescriber?

In-House Case #1: Patient

Handout Page 44

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We have a cardiologist that sees health center patients once a month because we have no specialists in the area. Can the health center use 340B to fill these prescriptions?

1. Does the health center contract with the specialist to provide services to the patients?

2. Is the health center medically responsible for the care provided by the specialist to the patients?

In-House Case #2: Provider

The local mental health providers send uninsured patients to our pharmacy if they can’t afford prescriptions. Under what circumstances can we fill them?

1. Is the person a patient of the health center?

2. Can you verify documentation of a referral from the health center to the specialist and report back from the specialist?

In-House Case #3: Referral Patients

May we use 340B for the Medicaid managed care patients and bill regular rates (U&C)?

1. What information do you need to know to make this decision?

In-House Case #4: Medicaid Billing

Our health center provides dental and primary care. A patient presents to the pharmacy with two prescriptions, (Rx #1) is from a health center dentist for an antibiotic and (Rx #2) is for birth control from a non-health center OB/GYN provider.

1. Can 340B inventory be used for the antibiotic?

2. Is the health center medically responsible for the care provided by the OB/GYN to the patient?

In-House Case #5: Multiple Provider Types

• Prior to dispensing prescriptions, verify prescriber and clinic/location for 340B eligibility

• Ensure your entity’s policy for referrals is reflected in the 340B standard operating procedure

• Ensure that your pharmacy operations are reflective of your state’s Medicaid 340B billing policy and HRSA 340B Database entry

Tips for Pharmacy Technicians

1. The entity is responsible for compliance

2. Understand your state’s Medicaid billing policy (ambulatory, physician administered)

3. Identify the key policies and procedures that are needed to support your 340B program

4. Continually review 340B program and conduct self-audits to maintain program compliance

Takeaways

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Question

340B IMPLEMENTATIONFOR RURAL HOSPITALS

Orphan Drug Exclusion

September 2013

PhRMA sues HRSA on basis regulation

is outside of HRSA’s scope of authority

July 2013HRSA publishes first final 340B regulation

May 2014

Judge vacates rule on the basis HRSA

didn’t have authority to issue the regulation

Orphan Drug Exclusion

July 2014

HRSA issues new interpretive

guidance, PhRMA asks judge to

invalidate interpretive guidance

or determine if it should survive

June 2014HRSA stands by its

position in the regulation as an

“interpretive guidance”

August 2014Judge does not

invalidate interpretive guidance; PhRMA

will have to file a new suit in order to

challenge the interpretive guidance

Orphan Drug Exclusion

October 2014

PhRMA files lawsuit challenging HRSA’s

interpretive rule

February 2015HRSA posted list of manufacturers that

are not offering 340B pricing for their

designated orphan drug products

Orphan Drugs/340B Eligibility

• What could the process look like for repayment from manufacturers to entities (for 340B prices not offered)?

• Which vendors are currently supplying you with orphan drugs at 340B pricing?

• What information and discussions have you had about orphan drugs and 340B pricing with suppliers and wholesalers?

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Orphan Drugs/340B Eligibility

• Will the orphan drug ruling impact your decision to participate in 340B – why or why not?

• What process does your wholesaler use to “block” orphan drugs in the 340B account?

• Do you maintain a list of NDC numbers for orphan drugs?

Apply: 340B Price Unavailable

HRSA Notification Template - 340B Price Unavailable

• Does your organization use an outside, third-party auditor, and how often?

• Within the organization, who has overall responsibility for the 340B program – pharmacy, finance, compliance?

• What procedures do you have in place for self-auditing?

• How often do you conduct self-audits and how often are policy and procedures reviewed?

Audits Contract Pharmacy

• How do you handle identified non-eligible transactions with a contract pharmacy?

• What process does your contract pharmacy use to block orphan drugs?

• How do you determine contract pharmacy terms?

• Any comments on pharmacy benefits manager (PBM) contracting/challenges?

Medicaid

• How do you handle managed care organization (MCO) patients?

• Do your sites carve-out or carve-in for Medicaid and why?

• How does your organization handle patients from different/surroundings states regarding Medicaid?

Replenishment/Inventory

• How do you handle expired medications and returns?

• Does your organization link multiple NDC to one charge code or does each NDC have its own charge code?

• How do you monitor your vendor in relation to crosswalk, accumulations/qualifications, and purchases? How are you made aware of changes in billing units/package sizes made by the vendor?

• How do you address borrow/loan issues for emergencies?

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• How does your entity use 340B savings?

• How do you create your provider list?

• How do you handle referral prescriptions?

• How do you determine qualified orders in your

entity’s Infusion center?

• How do you use pharmacy technicians to assist with

340B compliance, purchasing, or clinical programs?

• Review HRSA’s new registration changes.

General Question

340B PRICING

Objectives

• Identify the activities of the manufacturer and wholesaler in 340B pricing

• Explain 340B price calculation for covered outpatient drugs

• Discuss the manufacturer and wholesaler perspectives on policy issues

Question for the Panel

What are the 340B-related roles and responsibilities for you and your organization?

Manufacturer: Role/Responsibilities

• Uphold responsibilities in the pharmaceutical pricing agreement

– Calculate and charge a correct public health service (PHS) price

– Ensure that you charge the price to valid 340B entities

• Validate customers on indirect sales (chargebacks) to the HRSA 340B Database (eligibility)

Handout Page 48

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Pharmaceutical Pricing Agreement

HRSA Responsibilities Manufacturer Responsibilities

• Public list of 340B entities, including Medicaid information

• Require entities to maintain purchasing/dispensing records for covered outpatient drugs and Medicaid reimbursement for these drugs for not less than 3 years

• Charge 340B entities a price that does not exceed the 340B ceiling price

• Retain necessary records for not less than 3 years from date of creation

• Afford secretary (or designee) reasonable access to records relevant to compliance

• Permit CMS to share AMP and URA with secretary in order to carry out agreement

• Participate with HRSA 340B Prime Vendor Program (voluntary)

Wholesaler: Role/Responsibilities

• Open accounts with only eligible entities

• Deliver correct price to 340B entities

• Process chargebacks with manufacturer correctly

Manufacturer Question

How is the 340B price calculated?

Manufacturer: 340B Calculation

• For most drugs, it’s the weighted average price (net of discounts) to retail community pharmacies

AMP: Average Manufacturer Price

• Lowest price to US customers, certain federal pricing, such as 340B, excluded

BP: Best Price

• Brand: Greater of [(AMP * 23.1%) or (AMP – BP)] plus inflation penalty

• Generic/OTC: 13% of AMP

URA: Unit Rebate Amount

• 340B price based on quarterly Medicaid metrics which are based on commercial contracting practices

Manufacturer: 340B Calculation

WAC

AMP

BP

URAminus 340B Unit Priceequals

Units per Package

340B Ceiling Price

times

equals

• 340B ceiling price

Manufacturer: 340B Implementation

• Quarterly pricing– 340B prices change quarterly

– Manufacturers upload to authorized wholesalers 15-30 days prior to beginning of a quarter

– 340B pricing lags behind Medicaid by two quarters

Sales transactions occur

Q1 AMP and BP calculated, submitted to CMS; 340B ceiling price

calculated, submitted to wholesalers

340B ceiling price becomes effective

(based on Q1 transactions)

Q1 Q2 Q3

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Apexus Answers

Why is my 340B price different from another 340B

entity’s price?

Question for the Panel

How do you implementa chargeback?

1. 340B price is established

2. Wholesaler purchases at WAC ($10)

3. Covered entity places 340B order with wholesaler

4. Wholesaler reviews HRSA 340B Database, then sells to covered entity at 340B price ($6)

5. Wholesaler sends manufacturer a 340B chargeback ($4)

6. Manufacturer verifies 340B eligibility of covered entity (reviews HRSA 340B Database)

7. Manufacturer pays wholesaler the chargeback

Wholesaler: Chargeback Process

Potentially significant Medicaid implications if a manufacturer provides the 340B price to a non-participating entity

Wholesaler: Chargeback Comments

1.340B pricing changes quarterly: unique and challenging – 340B is the most challenging price file to administer in

the pharmaceutical industry

2.No “verified” central file of all 340B pricing

– Wholesale distributors receive more than 100 different notices from manufacturers, 4 times per year

– PVP does provide a comparative price file to participants which shows the big three and one regional wholesaler’s 340B pricing for comparison

3.Contract pharmacy and entity identification

– Health industry number (HIN), DEA, 340B ID

4.Returns

– The correct invoice must be chosen when returning a product

Wholesaler: Chargeback Comments Manufacturer: Chargeback Comments

• Manufacturer MUST validate entity on the chargeback to confirm 340B eligibility

• Manufacturer will deny the chargeback if they can not validate eligibility

– “Bill to” address on the chargeback identifies eligibility

– Correct information is critical

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Manufacturer Question

What types of adjustments do manufacturers make to their

Medicaid, AMP and BP?

Manufacturer: AMP/BP Pricing Adjustments

• Standard procedures

– Routine Medicaid restatements

– AMP and standard BP true-ups

• Medicaid restatements resulting from audits/investigations

• Reclassification/banking

Apexus Answers

What steps does an entity take to resolve what it

believes to be an incorrect 340B price?

Apexus Answers

What is the procedure used by manufacturers that wish

to refund payment to covered entities who are overcharged for 340B?

Question for the Panel

What are special situations or challenges for you

specific to 340B?

Manufacturer: Special Situations

• Penny pricing

• Sub-ceiling prices (voluntary)

– Through 340B Prime Vendor Program (non-FAMP exempt)

– Not through 340B Prime Vendor Program (include in non-FAMP)

• Inpatient pricing

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Manufacturer: Special Situations

• Product allocation systems

– 340B customers can be subject to product allocation systems just like commercial customers

• Non-discrimination guidance– Timing issues

– Concern about hoarding

Apexus Answers

If a drug is only available through a specialty

distributor or specialty pharmacy, how would a

340B patient access that drug?

Wholesaler: Contract Pharmacy Challenges

• Complex 340B contract pharmacy relationships present additional challenges

• Manufacturer requirements are not consistent regarding 340B sales reporting for 340B contract pharmacy

Wholesaler: Contract Pharmacy Challenges

• Process:1. Confirm accurate “bill to” 340B covered entity and

“ship to” (contract pharmacy) information specific to the relationship on the HRSA website

2. Request HIN (5-7 business days)

3. Account Set Up (Multi-Ship To Form/Customer Application)

4. Set ordering/delivery options

5. Covered entity authorization

6. Complete credit application, if new customer

7. Verify licenses, CSMP setup

8. Set up EDI specific to 340B vendor

Apply It: Take Action

• Keep HRSA 340B Database information accurate/current to avoid chargeback issues

• Check the HRSA website for manufacturer updates

• Log in to the Apexus website (www.340BPVP.com)

to verify pricing, run customized reporting, and keep up-to-date with new contracts

• Communicate pricing changes to leadership; significant price changes may impact purchasing decisions

Tips for Pharmacy Technicians

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Takeaways

• Manufacturers and wholesalers have important roles in supporting program integrity

• Manufacturers have 340B compliance responsibilities

• Actions entities take can impact a manufacturer’s calculations and ultimately impact the manufacturer’s compliance

Question

340B IMPLEMENTATION CONTRACT PHARMACY

Objectives

1. Learn about the following 340B delivery models: – Contract pharmacy– In-house pharmacy– Mixed-use areas (hospital only)

2. Apply decision points to your arrangements– Entity-contract relationship– Contract negotiations– Compliance safeguards

3. Share implementation strategies

Pharmacy Options

yContractPhcy

Single Contract

Supplement with Contract

Clinic Administered Drugs

Central Fill, Telepharmacy or

Specialty Pharmacy

Pharmacy Services

Mixed-Use

Contract Pharmacy

In-house Pharmacy

Other

Multiple Contract

Contract Pharmacy In-House Pharmacy

• Contracts with covered entity to provide services to its patients,including dispensing of entity-owned drugs

• Covered entity must have a written contract aligning with compliance elements in guidance

• Owned by, and a legal part of, the 340B entity

• Bill to/ship to arrangement• Registered on HRSA 340B

Database

• Typically listed as shipping addresses

• Not eligible to be listed as child site

Contract Pharmacy vs. In-House

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340B Contract Pharmacy – Overview

• HRSA guidance permits

entities to partner with

outside pharmacies to

provide eligible patients with

340B medications– Identification via shared

patient and provider data

– Inventory via “Bill To - Ship To”

wholesale arrangements

Bill ToShip To 

WHOLESALER

COVERED ENTITYCONTRACT PHARMACY

Contract Pharmacy Inventory Management

Separate Inventory Replenishment Model

Software needed

Complex record-keeping

Lower inventory costs

Higher inventory costs

Simpler maintenance

340B Contract Pharmacy Process

1. Contract pharmacy dispenses drug (non-340B inventory) to 340B entity’s eligible patient

2. When a full package size of the Rx is reached, the pharmacy or vendor orders a 340B drug to replace it

3. Replacement 340B drugs are “billed to” the entity and “shipped to” the contract pharmacy

4. Entity pays contract pharmacy for its services

340B Contract Pharmacy Process

hospi

Covered Entity PBM

hospi

Contract Pharmacy

Vendor/AdministratorDistributor

Switch

Patient

Contract

First, entity has a written contract pharmacy agreement in place with specified pharmacy, including full listing of all pharmacy locations that may be utilized under that agreement.

Oversight

Entity has written 340B policies and procedures to ensure program compliance and oversight activities of the contract pharmacies. Entity is prepared to follow CP oversight plan and be in compliance with requirements.

Database Registration

Entity registers contract pharmacies on HRSA database for participation in 340B Program, with obligation of ensuring ongoing compliance.

CP Implementation

Steps PRIOR to Contract Pharmacy (CP) Implementation

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Implementation Decision Points

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Decision Point 1: Entity-Contract Relationship

Considerations for selecting a contract pharmacy:

1. Sufficient volume of scripts to necessitate relationship• Trends in where organization’s scripts are

being filled: location, chains, etc.

2. Existing arrangements with other entities

3. 340B vendor affiliations/exclusivity

Decision Point 1: Entity-Contract Relationship

Role of 340B Vendor• Minimizes impact on retail pharmacy

workflow• Provides the interface to identify eligible

claims (matches entity data and pharmacy data)

• Reporting functions• Manages inventory replenishment• Retrospectively collects data from retail

pharmacy at the switch• Dependent on:

− Contract terms− Quality and integrity of service

delivery− Data submitted by covered entity

1. Direct contracting with a pharmacy

2. Contracting through 340B vendor

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Implementation Decision Points

• Entities can negotiate the terms of their contract pharmacy agreements

• Entities to ensure contract terms support program integrity and aligns with program intent

Decision Point 2: Contract Negotiations

• Reasonable fee structure– Pay flat fee per claim– Stop-loss function – Do not pay fees on claim reversals – Pay lowest of U&C, MAC, and 340B

• Transparent reporting– Entity has access to ALL data

• High complexity data management systems – HL7 interface

• Non-exclusivity

Contract Negotiations: The GOOD

• Pay fees based on % of revenue or drug cost• Entity does not keep 3rd party reimbursement• Vendor recruits patients to its mail order

pharmacy• Early cancellation fees• Not permitted to select wholesaler• Purchase of partial bottles at high rates due

to non-replenishment• Not permitted to contract with other 340B

vendors

Contract Negotiations: The BAD

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Fee Structure Example

Scenario:Self-pay: Pharmacy shall collect and receive a $18 dispensing fee and a $1 administrative fee from patient

Insured: Pharmacy shall collect and retain 35% of the contracted rate + a $19 dispensing fee

Dispensing fee: rates will increase according to the consumer price index yearly

• Is this a reasonable fee structure? Does this align with 340B program intent?

Share Pearls

• What do you wish you would have known prior to signing a contract with a pharmacy and/or vendor?

• Have you set up fee relationships with a contract pharmacy to provide discounts for your patients?– Cash pay/sliding fee

Tool: Contract Pharmacy Vendor Assessment

340B Compliance Self-Assessment: Vendors

Entity-Contract

Relationship

Contract Negotiations

Compliance Safeguards

Implementation Decision Points

Reality of the Complexity

• Covered entity responsible for ensuring compliance with all 340B requirements

• Covered entity to determine the “HOW” in meeting compliance elements– Duplicate discounts– Diversion

Decision Point 3: Compliance Safeguards

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Internal Audits

(By Covered Entity)

Independent Audits

(External)

Vendor Audits

Decision Point 3: Compliance Safeguards

Tool: Independent Auditor RFP Checklist

340B Independent Audit RFP Checklist

Operations Diversion Duplicate Discount Auditable Records

• Covered entity purchases and owns the inventory

• Comprehensive pharmacy services specified in agreement

• Covered entity informs patient of freedom of choice of pharmacy provider

• Federal, state, local law compliance

• Contract pharmacy to establish and maintain a tracking system

• Establish system to verify patient eligibility

• 340B drugs will not be subject to Medicaid rebates

• Contract pharmacy to provide reports consistent with customary business practices

• Periodic independent audits performed by covered entity

• Record of compliance with drug resale/transfer prohibition

• Upon request, contract pharmacy service agreement to manufacturers

Compliance Elements

1. Claim qualification– Patient definition– Charge capture

2. Inventory accumulation & replenishment

3. Billing

4. Policies and procedures

Compliance Monitoring Overview

• Data samples– First-time patients– Multiple providers– Ineligible prescriptions (i.e. Medicaid)

• Hardcopy prescriptions

• Contract pharmacy reports– Dispense to accumulation reports– Replenishment invoice

Compliance Monitoring: Data

Monitoring Checklist Data Reviewed

• Patient definition− Entity relationship with patient &

maintains records of his/her care− Health care professional

employed by entity or under contractual or other arrangements with entity

• Charge capture− Does the patient have an

encounter at clinic reimbursable on Medicaid cost report within eligible window?

• Patient medical record• Entity provider list

Compliance Monitoring: Claim Qualification

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Sample of Monthly Audit

Date Pt First Pt Last Medicaid Pharmacy Provider Active EligibleLocation Rx # Pass

5/28/14 XXXX XXXX no RA 10305 Buchsbaum yes yes 1202869 yes5/2/14 XXXX XXXX no RA 10305 Bowen yes yes 1176509 yes

5/18/14 XXXX XXXX no RA 10305 Sornberger yes yes 1201566 yes5/1/14 XXXX XXXX no RA 10305 Lockhart yes yes 1204278 yes

5/26/14 XXXX XXXX no RA 10305 Elliott yes yes 1182940 yes5/24/14 XXXX XXXX N/A RA 10305 Reversed N/A yes 1201143 N/A5/16/14 XXXX XXXX no RA 10305 Patten yes yes 1206596 yes

What other aspects of the prescriptions would you audit?

Share: Patient/Prescriber Data Updates

Scenario:

Pharmacy will update the patient and prescriber data once monthly, per data receipt from entity.

• Is this frequency of updating appropriate?

• What kinds of data files could the entity use as sources for eligible prescribers/patients?

Share: Prescriber Eligibility

Scenario:

Prescriber eligibility is determined by a match to a prescriber “eligibility” list.

• Is this enough? What additional information could be used?

Compliance Monitoring: Inventory

Monitoring Checklist Data Reviewed• Matching prescription data in

system with hard copy• 11-digit NDC accumulated

match 11-digit NDC dispensed?

• Correct quantity accumulated• Are accumulators manually

adjusted for manual orders?• Claim reversals in

accumulators

• Hard copy prescriptions• Dispense to accumulation

data report• Replenishment invoice

Compliance Monitoring: Billing/SOPs

Monitoring Checklist Data Reviewed

• The claim should not be billed to Medicaid fee-for-services

• Standard Operating Procedures (SOPs)consistent with practice?

• Contract pharmacy claim dispensing report

• Policies and procedures• Results from covered

entity administered audits of contract pharmacies

Share: MCO Medicaid

Scenario 4The contract will include patients with private insurance. Contract definitions of private insurance includes Managed Care Medicaid Plans.

1. How can you find out if your state collects Medicaid rebates on MCO drugs?

2. If your state collects rebates on MCO drugs, is this language appropriate to include in the contract?

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Open Discussion

Handout Page 22

Takeaways

• Do not outsource your 340B complianceresponsibilities to another party

• Entities can negotiate the terms of their contractpharmacy agreements

Question

340B & MEDICAID

Objectives

• Review how a duplicate discount is created andand how to prevent them

• List action steps to review compliance with theduplicate discount prohibition

• Share leading practices regarding compliancewith the duplicate discount prohibition andMedicaid reimbursement

340B price Medicaid rebate

Duplicate Discount Prohibition

Handout Page 59

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Medicaid Exclusion Terminology

Carving-In Carving-Out

340B 340BMedicaid Patient

340B

How does the Medicaid Exclusion File work?

MedicaidExclusion

File

Manufacturer

State

Entity

340B Discount

Medicaid Rebate

HRSA, CMS & State 340B Policy

HRSA Policy• Prevent duplicate discounts• Use the Medicaid Exclusion File• Bill according to the state policy (no HRSA AAC

requirement)

CMS Policy• Collect rebates on claims (including MCO and clinic

administered)• 340B drugs are not subject to these rebate collection

requirements

State Policy• How will duplicate discounts be prevented in the state?• How will 340B entities bill Medicaid and how will Medicaid

reimburse these entities when using 340B drugs?

Who uses the Medicaid Exclusion File?

Covered Entities:

Designating if they will be billing the

state for 340B drugs

State Medicaid Agencies:

To exclude 340B claims from their

rebate requests to manufacturers

Manufacturers:

To verify denial of payment of

Medicaid rebates for 340B claims

HRSA 340B Database: Medicaid

1. Verify the HRSA 340B Database is accurate

2. Contact your state Medicaid agency to ensure you understand state requirements

3. Determine way to account for retrospective Medicaid eligibility

4. Perform a self audit of Medicaid prescriptions

5. Ensure you do not use 340B for Medicaid patients at a contract pharmacy unless you’ve notified HRSA of an arrangement to prevent duplicate discounts

Actions to Review Duplicate Discount Prohibition Compliance

Handout Page 60

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What to Ask Your State

• What is the state’s general policy on Medicaid rebates on 340B drugs (for example, does the Medicaid Agency use the OPA Exclusion File or other methods of segregating claims?)

• If our entity uses 340B for Medicaid, what procedure should we use to notify the state Medicaid agency that a 340B drug was unavailable?

• Does the State Medicaid Agency exclude 340B claims when seeking a Medicaid Rebate on claims from patients: 1.That are billed from Medicaid Managed Care

2.That received physician administered Drugs

3.That are “Dual Eligible” (Medicaid/Medicare)

4.In any other circumstance?

Our entity carves-in (uses 340B for drugs billed to Medicaid), and we have listed our entity’s NPI in the exclusion file. Can duplicate discounts still occur?

Target Practice #1

Can we use 340B for Medicaid patients at our contract pharmacy?

Target Practice #2

Is there a risk of creating a duplicate discount if we use 340B drugs for Medicaid MCO claims?

Target Practice #3

Target Practice #4

Our entity wants to use 340B drugs for Medicaid at some clinics, but not at other clinics. Is there a way to support doing this in the HRSA Medicaid Exclusion File?

Target Practice #5

Our entity carves-in and is located in CO and currently has our Medicaid Provider number for CO listed in the MEF. We also bill Medicaid in 12 other states. Are we in compliance with preventing duplicate discounts since the state that we are located in is listed appropriately?

Handout Page 61

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State Medicaid Engagement: 21 States

Discussions

Active Engagements

• Medicaid reimburses for drugs in 4 basic program areas that are managed in three separate areas of the agency

– Traditional prescriptions

– Physician and clinic administered products

– Drugs billed through medical claims

– Sub-specialty drug products for specific medical conditions

• Potential savings to be shared between state and CE is in the range of 7 to 10% of WAC

Medicaid Drug Product Reimbursement

Medicaid Net CostExample: Drug with $100 WAC

$61 $51 

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Non‐340B 340B

Medicaid rebate

10% Delta

• Surrogate pricing model (may be legislatively mandated)

– WAC-X% is maximum state pays plus a dispensing fee, regardless of what is submitted

• Rebate bill back

– State pays typical reimbursement, invoices entity for the rebate usually paid by manufacturer

• MAC pricing and MAC pricing of sub-specialty limited-use medications

– State sets MAC for a group of 340B drugs (ex. HTC)

• AAC plus fee (sometimes enhanced)

Medicaid Reimbursement Leading Practices

• Check the HRSA 340B Database listing to ensure the Medicaid information reflects practice (remember MCO not addressed)

• Ensure Medicaid patients with retroactive eligibility are accounted for in 340B software/operations and treated consistently with standard operating procedures

Tips for Technicians and 340B Coordinators Takeaways

1. Duplicate discounts are prohibited by 340B Statute

2. The entity can take action to check its compliance

3. There are leading practices emerging in the marketplace regarding Medicaid reimbursement

Handout Page 62

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Question

340B AUDIT PANEL

• Review the key points of the audit processes

• Outline key lessons learned from HRSA andmanufacturer audits

Objectives

HRSA AUDIT OVERVIEW

Handout Page 25

FY 2012

FY 2013

FY 2014

FY 2015*

(As of Sep 4)

Number of covered entities audited

51 94 99 200

• Outpatient facilities/sub-grantees 410 718 1,476 2,720

• Contract pharmacies 860 1,937 4,028 4,443

Number of finalized reports 51 93 95 86

HRSA Audits by the Numbers

ENTITY EXPERIENCES:LESSONS LEARNED

Handout Page 63

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Scenario:

We had a contract pharmacy script that was filled on 340B. Patient had an eligible encounter at our hospital. The script, however, did not come from that encounter. The patient had called the physician at a non-340B clinic asking for a refill months after the eligible encounter itself. Could this result in a finding?

Diversion: Considerations

OPA FINDINGS:

340B drug dispensed for prescription written at ineligible site, by ineligible

provider, or not supported by medical record

340B drug dispensed to an inpatient

340B drugs not properly accumulated

Entity did not have adequate controls in place for proper accumulation and

prevention of diversion

• Diversion occurs when a 340B drug is provided to an individual who is not an eligible outpatient of that entity (not meeting all or part of the patient definition), AND/OR dispensed in an ineligible area clinic

• Different approaches to eligibility verification (to include location):– Barcodes, location codes, e-prescribing

• No eligibility encounter window defined– Eligible encounter but script coming from second ineligible

encounter

• Infrequent/inappropriate load of prescriber file

Diversion: Lessons Learned

Scenario:

Bundled billing for everything within four walls of our hospital and hence state Medicaid unable to seek rebates for those claims. We do, however, use 340B for Medicaid patients within four walls. At offsite clinics, our entity is carved out and does not use 340B for Medicaid patients. Same NPI for parent hospital and offsite locations/child sites. Might we receive a finding?

Duplicate Discounts: Considerations

OPA FINDINGS:

Entity was billing Medicaid contrary to information contained in Medicaid

Exclusion File

340B drugs dispensed to Medicaid patients by contract pharmacy, absent arrangement to prevent

duplicate discounts

Inaccurate or incomplete information in Medicaid Exclusion File

• All clinics under the same Medicaid provider number/NPI must handle Medicaid drugs in the same manner

• In past audits, entities have received findings for Medicaid Exclusion File inaccuracies, whether or not those inaccuracies have led to duplicate discounts.

• Medicaid Exclusion File requirements must be followed in all cases, even in carve-in arrangements for contract pharmacies

• Contact State Medicaid director before audit on how handling entity’s claim in regards to rebates– Try to get documentation of confirmation

Duplicate Discounts: Lessons Learned

Scenario:

Some contract pharmacies consider payer information to be proprietary and are not sharing this data with the entity. Not having payer information would make it challenging to ensure prevention of duplicate discounts. What do we do if our vendor won't share that information?

Auditing Contract Pharmacies: Considerations

OPA FINDINGS:

340B drug dispensed to non-patients at a contract pharmacy

340B drug dispensed for a prescription written at ineligible site,

or written by ineligible provider, or not supported by medical record

Registered a contract pharmacy without a contract in place

Entity did not provide contract pharmacy oversight

• Possible to query payer information on a global level (not claim level). This allows you to audit the absence of any BIN/PCN names for Medicaid, without knowing the payer for each claim.

• Ensure contract pharmacy uploading data feeds as frequently as decided upon in agreement

• Process for when contract pharmacy identifies violation

• Self-audit contract pharmacy transactions with hardcopies of scripts

• HRSA expects annual independent audits

Auditing Contract Pharmacies: Lessons Learned

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• What constitutes as auditable records?

• How long do these records have to be kept?

• How far back does/can HRSA “audit” from the date you are notified?

• Data request: A copy of the last physical inventory report(s), including reconciliation(s). What does this mean?

Auditable Records: Considerations

OPA FINDINGS:

Entity failed to maintain auditable medical records

• Auditable records include specific documentation that all 340B Program requirements are met for every 340B drug.

• Handling self-audit records; who reviews these and makes decisions about self-reporting? Are they shared with others, and if so, under what circumstances?

Auditable Records: Lessons Learned

Scenario:

Our hospital was contacted by a consulting company on behalf of a manufacturer asking us to participate in a “Good Faith Evaluation” of our 340B purchases, but the data request included looks more like a formal audit. What do you recommend?

Manufacturer Audits of Covered Entities

• Covered entity should seek legal counsel in reviewing data request prior to submission as a part of this “Good Faith Evaluation”

• HRSA guidance required approval before conducting an audit– Approved audit work plan; third party auditing firm

• Covered entities should work with manufacturers who are attempting to resolve matters directly through informal dispute resolution– An audit can be avoided

Manufacturer Audits of Covered Entities: Lessons Learned

Scenario:

While self-auditing, we noticed that scripts coming from eligible clinics, but written by ineligible private physicians, were considered eligible. We discovered we were only using location as eligibility criteria, without a provider list. This constituted a material breach of compliance.

We had already received an engagement letter for an upcoming HRSA audit, but noticed this prior to the actual audit. Should we self-disclose before the audit? If we self-disclose, will that impact our audit?

Self-Disclosure

• Entities to establish and document criteria of material breach of compliance

• Report violation issue to HRSA– docs.340bpvp.com/documents/public/resourcecenter/ALL_

Entities_Self_Reporting_340B_Non_Compliance.docx– Include corrective action plan; strategy to inform

manufacturers (if applicable)

• Entities are expected to work with the manufacturer to determine a mutually agreed upon plan to address material breach – Plan for financial remedy (if applicable)

• HRSA reviews self-disclosure and closes accordingly

Self-Disclosure: Lessons Learned

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© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

MANUFACTURER PERSPECTIVE

• Covered entity– Identifies issue(s)– Corrects issue(s)– Self discloses issue and proposed CAP to HRSA– Self discloses to manufacturer – works in good faith

to implement CAP

• Manufacturer – Identifies impact to manufacturer’s products– Works with covered entity to resolve issue(s)

Self-Disclosure of Non-Compliance: Manufacturer’s Role

• Covered entity must:– Prospectively correct issue

• Conduct root cause analysis of underlying issue• Implement plan to correct issue moving forward

– Retrospectively correct issue• Identify products (and units) affected• Determine inappropriate discounts

– Repayment challenges• Refund vs. offset• Work with manufacturers to determine best course

Corrective Action Plans: Manufacturer’s Role

Scenario:

We identified diversion during self-auditing, which constituted a material breach and led us to self-disclose. We sent out letters to 50 manufacturers, and only heard back from 3, so will only process those repayments. This means the other 47 don’t want repayment, correct?

• What is the entity’s responsibility—where does it end?

• What does HRSA expect?

• Do all manufacturers expect the same thing?

Repayment: Considerations

• What are some tips in reaching out to manufacturers for repayment?

– Who to contact and how to get correct contact information

• 340B HRSA Database technical contact for manufacturer

– What to include in correspondence/request

• Concise explanation of violation

• Period of review and scope

• Historic 340B and WAC prices from wholesaler

Repayment Considerations

• What are the “triggers” that manufacturers use to determine need for informal dispute resolutions and/or audits of entities?

• What data is used by manufacturers to substantiate these engagements? Challenges in data transparency?

• What can an entity expect when contacted by a manufacturer as an informal engagement/inquiry?

Manufacturers Auditing Entities

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Key Takeaways

• Entities can prepare for HRSA and manufacturer

340B audits with available tools and resources

– Apexus tools: self-audit, sample HRSA data request

• Prepare for a HRSA audit now

– Assemble a team of experts and self-audit

• Compliance is the entity’s responsibility; do not rely

on a vendor’s records alone

• There are lessons to be learned from prior audits

• Report inventory discrepancies or software malfunctions to leadership; document the issue in writing and keep records of how the situation was corrected

• Know your 340B policies and procedures for verifying patient, prescriber, and location eligibility

• Self-audit: ensure procedures are being followed and report issues to leadership

Tips for Pharmacy Technicians

Question

340B HOT TOPICS

• Describe current events in the 340B environment

• Discuss 340B-compliant approaches used by leading practices to common hot topics

• Discuss tools available for entities

Objectives Question for Panel

How do you define material breach?

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• X% of total 340B purchases or impact to any one manufacturer

• $X (fixed amount), based upon total outpatient or 340B spend, or impact to any one manufacturer

• X% of total 340B inventory (units)

• X% of audit sample

• X% of prescription volume/prescription sample

Material Breach Contract Pharmacy Auditing Question

Do I have to audit my contract pharmacy?

Should I?

What does HRSA expect?

Reporting Non-Compliance

I discovered my vendor/contract pharmacy

had been “correcting” non-compliance on its own, without telling us;

is this OK?

Reporting Non-Compliance

Does HRSA consider it OK to “go negative” in our accumulator instead of

filing a self-report?

• Contract pharmacy solution– Didn’t load/update the prescriber file at the agreed to

interval: diversion– Made automatic corrections to non-compliance without

notifying the entity: non-transparent to manufacturers– Loaded incorrect BIN/PCNs for Medicaid: duplicate

discounts

• Split-billing software– Updated its software and made a configuration change

without notifying the entity: diversion– Loaded incorrect orphan drug list: orphan drug exclusion

violation

• Apexus split-billing tool: standards checklist

340B Vendors/Administrators: Caution

• What sorts of things will cause an entity to be terminated from the 340B program?

Termination from 340B

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© 2015 Apexus. Reproduction without permission is prohibited. 340B University - October 8, 2015

• Notify HRSA

• Terminate registration

• Cease purchasing of 340B from distributor/wholesaler

• What to do with purchased 340B medication that remains?– Full package size– Partial package size– Follow all state BOP regulations and ensure

documentation– Transfer, credit/rebill, return, destroy

Termination Considerations 340B University: Top Compliance-Focused Tools

1. Sample 340B job descriptions (new)

2. CSOS and 340B (new)

3. 340B Independent Audit RFP Checklist

4. Split-Billing Software Considerations Checklist

5. Self-disclosure tool

6. Sample self-audit guides and SOPs

Tools here:

1. How does the entity’s use of 340B align with the intent of the program, and how is that communicated?

2. Does your entity have adequate internal resources devoted to 340B compliance oversight; if you got the audit letter tomorrow, what is the plan?

3. What level of confidence does your entity place in its vendor to assist with compliance?

4. Does your entity optimize the value of 340B and the PVP?

5. What is your entity’s plan for continuous staff education as 340B evolves in the future?

Five Questions for Entity Leadership 340B Central Fill, HRSA Policy

A: If the central fill pharmacy is a separate entity from the covered entity and is providing medications directly to patients (in person or via mail), then it should be registered as a contract pharmacy.

• If the central fill pharmacy is a separate entity from the covered entity and provides services such as repackaging, but does not take prescriptions directly from patients nor dispense medications directly to patients or their agents, then the central fill location may be a ship-to address of the covered entity.

– HRSA has permitted on a limited basis and when requested in writing, that such a central fill location that does not take prescriptions from patients nor dispense medications directly to patients or their agents, functioning in conjunction with a contract pharmacy arrangement, be added as a ship-to address of the entity.

Q: In a contract pharmacy arrangement that incorporates a central fill pharmacy, under what circumstances should the central fill pharmacy be registered as a ship-to address of the entity vs. an additional contract pharmacy?

• 340B entities are receiving PBM contracts with reimbursement rates that attempt to capture 340B savings by the PBM

• Does the 340B savings belong to the entity or to the PBM?

340B Reimbursement Challenges Question

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340B UNIVERSITY WRAP-UP

Apexus Answers 340BPVP.com

• Register for access to secure section for contract maximization

Take Action

ApexusAnswers@340BPVP.com

Apexus | 340B Prime Vendor Program | 290 E John Carpenter Frwy | Irving, TX 75062

THANK YOU FOR ATTENDING340B UNIVERSITY!

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Please rate the 340B University Program: 1=Poor, 2=Fair, 3=Good, 4=Very Good, 5=Excellent Overall Rating Scale

Your overall learning experience at 340B University. 1 2 3 4 5

The value of the content. 1 2 3 4 5 The likelihood that you will make a change in your practice to improve compliance. 1 2 3 4 5

Session Speakers Rating Scale

Please rate only the 340B

Basics & Implementation sessions you

participated in:

1A: 340B Basics for Hospitals Burnis D. Breland 1 2 3 4 5 Rusol Karralli 1 2 3 4 5

1B: 340B Basics for Non-Hospitals Donavan Smith 1 2 3 4 5

2A: Implementation: Mixed-Use: GPO Sarah Lee 1 2 3 4 5

2B: Implementation: In-House Pharmacy Donavan Smith 1 2 3 4 5

2C: Implementation: Rural Hospitals Gary Merchant 1 2 3 4 5

340B Pricing

Chris Hatwig 1 2 3 4 5

Phil Matheny 1 2 3 4 5

Andy Wilson 1 2 3 4 5

340B Implementation: Contract Pharmacy Rob Nahoopii 1 2 3 4 5

340B & Medicaid Billing Jason Atlas 1 2 3 4 5

340B Audit and Dispute Panel Discussion

Rusol Karralli 1 2 3 4 5

Ross Thompson 1 2 3 4 5

Phil Matheny 1 2 3 4 5

340B Hot Topics

Burnis Breland 1 2 3 4 5

Rob Nahoopii 1 2 3 4 5

Sarah Lee 1 2 3 4 5

Donavan Smith 1 2 3 4 5

Gary Merchant 1 2 3 4 5

Help Us Improve 340B University Rating Scale

The tools included in the participant packet were appropriate and useful. 1 2 3 4 5

I had access to all of the materials I needed to make the most of today’s learning experience. 1 2 3 4 5

The session was presented in a manner appropriate for my level of 340B knowledge. 1 2 3 4 5 If you rated any session below a 3, please tell us how we could have improved your experience at 340B University. Please add any additional comments and/or suggestions.

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