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experience access // CPAs and ADVISORS 340B PROGRAM OVERVIEW AND COMPLIANCE ENVIRONMENT MICHAEL R. EARLS, CPA DIRECTOR

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Page 1: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

experience access //

CPAs and ADVISORS

340B PROGRAM OVERVIEW AND COMPLIANCE ENVIRONMENT

MICHAEL R. EARLS, CPADIRECTOR

Page 2: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD, LLP BREADTH & DEPTH OF RESOURCES

National CPA & advisory firm

Approximately 2,250 total personnel

Approximately 260 partners

Approximately 950 CPAs

Serving clients for 90+ years

$450 million in revenues

Health care is BKD’s largest industry

3,200+ health care provider clients nationwide, with 275 CPAs serving those health care providers

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Page 3: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

MATERIALS COVERED TODAY

340B Program Evolution, Purpose & Benefits

HRSA & Manufacturer Audits

Compliance Environment

340B: Seven Key Compliance Areas

Preparation for Audits & Findings

340B Program Challenges

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Page 4: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

THE EVOLUTION OF 340B

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340B was started with the Public

Health Services Act

Guidance on outpatient

clinics released by

HRSA

Audit guidelines established.

Patient definition clarified.

Contract pharmacy process established.

Medicaid duplicate discount

prohibition

HRSA guidance on contract pharmacies allowing

multiple relationships.ACA expands eligibility to

include 5 new entities

Orphan drug

exclusion

HRSA begins audits

GPO prohibition guidance

HRSA issues final rule on orphan drug

exclusion

1992 1994 1996 2000 2010 2011 2012 2013 2014

Orphan Drug final rule vacated, HRSA issues Interpretive

rule & PhRMA files suit again

Page 5: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B PROGRAM OVERVIEW – PURPOSE

Provides discounts on outpatient drugs purchased by “safety net” providers for eligible patients

Average savings of 25 - 50% for eligible covered entities on outpatient drugs

Savings can be used to:

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Provide discounts on

drugs to patients

Expand services by provider to

patients

Provide services to more patients

Page 6: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

THE BENEFITS OF 340B

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-Access to affordable medications

-Better quality of life

-Improved clinical outcomes through access to services

-Drug cost savings

-Mission fulfillment

-Outcome optimization

-Care for all community members

-Local access to medical services

-Jobs

340B

Patient

Covered Entities

Community

Page 7: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B PROGRAM – COVERED ENTITIES

Health Centers

Federally qualified health centers

Federally qualified health center look-alikes

Ryan White HIV/AIDS Program grantees

Comprehensive Hemophilia Diagnostic Treatment Centers

Title X Family Planning clinics

Sexually transmitted disease clinics

Disproportionate Share/Critical Access Hospital,

Sole Community Hospital, Rural Referral Center,

Children’s Hospital, Free Standing Cancer Hospital

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Page 8: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

ELIGIBILITY AFTER ACA (AFFORDABLE CARE ACT)

The Patient Protection and Affordable Care Act (PPACA or ACA) changed eligibility and the 340B Program reach:

Office of Pharmacy Affairs (OPA) can address discrepancies in pricing

Larger 340B discounts through increased Medicaid rebate percentages

New integrity provisions for both manufacturers and covered entities

Increased price transparency, new dispute resolution processes and civil penalties for diversion.

Several new entities now eligible:

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Disproportionate Share Hospitals

Pediatric Hospitals

Cancer CentersCritical Access

HospitalsRural Referral

Centers

Sole Community

Hospitals

Page 9: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B PROGRAM – CONTRACT PHARMACY ARRANGEMENTS

Retail pharmacies contracted for “Bill To - Ship To” arrangement

Multiple contract pharmacy guidelines went into effect April 5, 2010

Significant opportunity to expand Rx access

New compliance challenges, including “expectation of” annual independent audits

Covered entities remain responsible for 340Bcompliance for contract pharmacy transactions

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Page 10: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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HRSA and Manufacturer Compliance

Activities

Page 11: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B CONTINUUM

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EDUCATION

1992

EXPANSION

2000

COMPLIANCE

2015

Page 12: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE ENVIRONMENT – HRSA AUDITS: 275+ COMPLETED

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•All 51 now publicly available & final•26 have public letters to manufacturers•Only 18 had no adverse findings

2012 –51 audits

• 75 now publicly available

• 44 have sanctions of repayment to manufacturers

• Only 21 had no adverse findings

2013 –94 audits

• 18 now publicly available

• 7 have sanctions of repayments to manufacturers

• Only 9 had no adverse findings

2014 –99 audits

Page 13: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

0% 10% 20% 30% 40% 50%

Incorrect Database Records

Billing Contrary to the Medicaid Exclusion File

Dispensed Drugs to Ineligible Individuals

Contract Pharmacy Oversight

41%

39%

24%

2%

Audit Results for Non-Hospitals – Through 2014 Audit Results

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Source: Review of Published Audit Results on HRSA website

Page 14: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE HRSA – AUDIT RESPONSES

Covered Entities: Agree with findings & implement corrective action planChallenge findings

Challenge findings successfullyAddress in the preliminary reportIn final report – implement corrective action plan

Expectation of Corrective Action PlanWhen diversion & duplicate discount findings occur – entity required to specify timelines & resolution processes

No final judicial reviews have been made public

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Page 15: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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Manufacturer Audits

Page 16: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

MANUFACTURER AUDITS

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Manufacturer Audit Guidelines

May only conduct after showing of

“reasonable cause”

Manufacturer inquiries to covered

entity may help support

“reasonable cause”

Important for covered entities to respond to

manufacturer inquiries, failure to

respond could result in audit

Details are not publicly available

Page 17: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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Compliance Environment

Page 18: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE ENVIRONMENT – BRIEF HISTORY

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March 2010

PPACA requires GAO study on use & oversight of 340B Program

September 2011

GAO issues report, oversight is lacking

Covered entities are effectively using the Program

Need for clearer guidance evident (specifically regarding definition of patient)

October 2011

HRSA OPA issues response to Senator Grassley’s concerns, similar to GAO report - indicates audits will begin in 2012

March 2012

Policy release describing audits

Expansion of covered entities & appeal of contract pharmacy grows attention to the Program

Page 19: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE ENVIRONMENT – BRIEF HISTORY

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September 2012

Senator Grassley letter to Duke University Health System questioning use of savings from 340B Program

February 2014

OIG report over Contract Pharmacy Arrangements

June 2014

HRSA announces $6 Million investment in integrity initiatives

July 2014

HRSA issues interpretive rule for Orphan Drug Exclusion

October 2014

HRSA Grantee site visits will inquire about compliance

February 2015

Mega-Guidance is expected in June 2015

Page 20: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SEVEN ELEMENTS OF AN EFFECTIVE COMPLIANCE PROGRAM

1. Developing written Policies & Procedures

2. Designating a Compliance Officer & Committee

3. Conducting Effective Training

4. Developing Effective Lines of Communication

5. Enforcing Standards through well publicized Disciplinary Guidelines

6. Performing audits & monitoring risk areas

7. Responding to detected offenses & developing Corrective Action Initiatives

Sources: OIG Hospital Compliance Guide – February 13, 1998

OIG Supplemental Compliance Guidance- January 31, 2005

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Page 21: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SEVEN KEY COMPLIANCE AREAS

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Eligibility

Registration

Diversion

Duplicate

Discounts

Contract

Pharmacy

Group

Purchasing

Organization

Orphan

Drugs

Page 22: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

WHAT ARE YOUR TOP RISKS RELATED TO 340B?

Do you know what your top risks are?

Do your risks include all your registered sites, contracting pharmacies, etc.?

How do you plan to minimize these risks?

How will these risks be identified?

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Page 23: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – ELIGIBILITY

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Automatic Eligibility

• Owned and operated by state or local government

• Formally granted governmental powers

• Or a private (non-profit hospital) under contract with state or local government

• Health centers & specialized clinics

• A critical access hospital

Disproportionate share hospital -meeting a DSH percentage

• 8% if sole community or rural referral center

• 11.75% for all other hospitals, including free-standing children’s hospitals & cancer hospitals

Page 24: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – REGISTRATION

Registration

Covered entity must register with HRSA

Each eligible entity location that plans to use 340B drugs (clinic or offsite outpatient department) must be separately registered

Information should be collected by the authorizing official during the annual recertification process

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Page 25: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – REGISTRATION

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Recertification process for all covered entity types is required annually or covered entity will be removed from the Program

Authorizing official must attest to eight statements

8

Page 26: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – RECERTIFICATION PROCESS

1. All information listed on the 340B Program database for the covered entity is complete, accurate & correct;

2. The covered entity meets all 340B Program eligibility requirements…

3. The covered entity is complying with all requirements & restrictions of Section 340B of the Public Health Service Act…

IS YOUR AUTHORIZING OFFICIAL READY TO ATTEST TO THESE 3 QEUSTIONS?

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Page 27: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – DIVERSION

Diversion

Drugs can only be used on an outpatient basis for covered entity’s patients as defined by HRSA

Use for other individuals constitutes prohibited diversion

Focus on defining “patient” & “covered entity”

What is “covered entity”?Where services are provided

Physicians must be employed or under a contractual or other arrangement

Entity should have a listing of approved 340B physicians

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Page 28: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – DIVERSION

Most recent definition of “patient”―1996

Other areas of Diversion

340B drugs given to patients not meeting criteria for health center status

Prohibits resale or transfer of drugs purchased at 340B to person who is not a patient of covered entity

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Entity must maintain responsibility for

individuals care via relationship with

health professional

Must maintain patient health care

records

Page 29: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – DUPLICATE DISCOUNTS

Duplicate discounts

340B laws prohibit application of both 340B price discount (front end) and payment of pharmacy rebate to state Medicaid (back end) on same drug claim

General options for covered entities

Carve-out Medicaid - from 340B drug purchases

Carve-in Medicaid - requires verifying Medicaid exclusion file is accurate

What about Medicaid managed care or other state programs with Title XIX funding?

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Page 30: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – DUPLICATE DISCOUNTS

Medicaid duplicate discount

Some states have been slow to establish and communicate Medicaid billing requirements and potential modifiers

Transition to Medicaid managed care has created confusion

Contract pharmacies should not “Carve-in” unless arrangement with state Medicaid exists

Recommendation – Engage in ongoing dialogue with Medicaid pharmacy directors of the states where you file claims―a “win-win” solution may be available

THE RESPONSIBILITY FOR AVOIDING DUPLICATE DISCOUNTS IS ON THE COVERED ENTITY!!

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Page 31: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – CONTRACT PHARMACY

Contract Pharmacy

HRSA allows providers to enter into

arrangements with multiple contract

pharmacies to dispense 340B drugs to

qualifying patients of providers

Covered entity is responsible for compliance &

must monitor contract pharmacies

HRSA recommends independent audits

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Page 32: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE REPORT – CONTRACT PHARMACY

OIG on Contract Pharmacy Arrangements in the 340B Program

February 2014 – Memorandum Report:

Contract Pharmacy Arrangements in 340B Program, OEI-05-013-00431

Report stated that it “creates complications” in preventing diversion &

duplicate discounts

Report noted that some covered entities do not:

1. Offer 340B discounts to uninsured patients at their

contracted pharmacies

2. Provide sufficient oversight of contract pharmacies

3. Many do not engage outside independent auditors to review them

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Page 33: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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A Closer Look at OIG Report and Contract Pharmacy

Complications

Page 34: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SCENARIO 1: NONEXCLUSIVE PHYSICIAN

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A physician practices part time at a covered entity, but also has a private practice. The

physician first sees an individual at the covered entity. On a separate occasion, the

physician sees the same individual at the private practice & writes a prescription for

the individual. The individual fills the prescription at the covered entity's contract

pharmacy.

Page 35: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SCENARIO 2: TIME LIMIT AFTER PATIENT’S VISIT

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A physician sees an individual at a covered entity & writes a prescription for the

individual. Four months after filling the original prescription, the individual refills the prescription at the covered entity's contract pharmacy. The individual is not seen at the

covered entity during those 4 months.

Page 36: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SCENARIO 3: PRESCRIPTION FROM A REFERRED PHYSICIAN

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A physician sees an individual at a covered entity & refers the individual to a specialist

who is not affiliated with the covered entity. The specialist writes a prescription for the

individual, & the individual fills the prescription at the covered entity's

contract pharmacy.

Page 37: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

SCENARIO 4: MATCHING PRESCRIPTION TO CLINICAL INFORMATION

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A physician sees an individual at a covered entity for chest pain & writes the individual a prescription for a blood pressure medication (related to the chest pain). During that visit,

the physician also writes the individual a prescription for a sleep medication (related

to a previously diagnosed condition).

Page 38: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

OIG interviewed 30 covered entities and eight administrators with 199 unique contract pharmacies relationships

For each scenario there was not a clear consensus of the proper handling

How do you define your provider list?

Do you have a time restriction?

Do you match to clinical information?

How do you handle referrals?

Do you have visiting specialists?

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Page 39: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

RISK ASSESSMENT STRATEGIES

Frame of Mind

Take off the gloves & be brutally honest

Be open minded

Make any issue, area or department fair game

Rules of Engagement

“Brainstorm” vs. “Brainstrain”

Don’t debate the issue

Look at “who”, “what”, “when” & “where” & forget the “why”

Don’t rank the issues at this time

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Page 40: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

COMPLIANCE – CONSEQUENCES OF NOT COMPLYING

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Repayment of discount to

manufacturer

Suspension from

340B Program

Possible Civil Monetary Penalties

for knowing & intentional violations

Potentially false claim liability

(ripe for qui tam actions?)

Page 41: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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Audit Preparation and Findings

Page 42: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

HRSA – AUDIT PROCESS

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Audit noticeCoordination

callData request Audit fieldwork

Exit conference Follow upPreliminary

reportFinal Report

Final determination

by HRSAJudicial review

Page 43: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

PREPARATION FOR AUDITS

Based on common findings from HRSA audits, being prepared

is critical

Recommended to perform internal review procedures throughout

the year (there are sample audit guides available, including from

APEXUS)

Is an internal review enough? Covered entities should consider

independent mock reviews performed by independent third party

New compliance challenges, including “expectation of” annual

independent audits, especially surrounding contract pharmacy

relationships

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Page 44: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

PREPARATION FOR AUDITS – EXAMPLE OF INTERNAL PROCEDURE

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• Finance, Pharmacy Director, Purchasing Coordinator & Administration

Interview personnel involved in 340B

Program processes and procedures

• Obtain data policies for any vendor software

• Obtain copies of all 340B contracts with pharmacies &/or other 340B service providers

Gather all policies and procedures related to 340B

Page 45: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

PREPARATION FOR AUDITS – EXAMPLE OF INTERNAL PROCEDURE

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• Medicaid (including Medicaid managed care) for 340B drugs

• Point of contact with State Medicaid agency

• Could represent multiple states and Medicaid contracts

Obtain all Medicaid ID numbers, provider

numbers & NPIs for all entity sites billing

• Review National Drug Code (NDC) used for OP drugs

Review decision for purchasing orphan drugs

& verify accuracy on 340B database

• Select sample based on high-cost drugs, Medicaid transactions & Orphan drugs

• Include each 340B service area (main pharmacy, outpatient clinics, contract pharmacy, retail pharmacy, etc.)

Obtain population of all 340B dispensations for a specified period of time

(typically six months)

Page 46: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

PREPARATION FOR AUDITS – EXAMPLE OF INTERNAL PROCEDURE

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• Review of GPO purchases & exclusion of 340B drugs if applicable

Inventory disposition reconciliation from beginning of sample time frame to end

of sample time frame

• Additional procedures should be developed around contract pharmacy relationships

Contract Pharmacy

• Who internally should perform this self-monitoring?

• Is internal review enough based on expectation of independent audits?

Internal Reviews

Page 47: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

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340B Compliance Issues Found During

BKD Reviews

Page 48: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD REVIEW FINDINGS

Overall similar to HRSA audit findings

Contract Pharmacy

Diversion

Duplicate Discounts

Registration

Program Compliance

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Page 49: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD & HRSA AUDIT FINDINGS

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• Pharmacy incorrectly registered as child site entity was shipping 340B drugs to a pharmacy not listed on the 340B database

• Registered contact pharmacies without written contract in place

Contract Pharmacy

• 340B drugs dispensed to inpatients

• 340B drugs dispensed for prescriptions written at ineligible sites

• 340B drugs dispensed for prescription written at ineligible site by ineligible provider

• 340B drugs dispensed to non-patient at contract pharmacy

Diversion

Page 50: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD & HRSA AUDIT FINDINGS (CONT’D)

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

• Entity billed Medicaid for a patient at a contract pharmacy contrary to information contained in the Medicaid Exclusion File

• Entity was billing Medicaid contrary to information included in the Medicaid Exclusion File

Duplicate Discounts

Page 51: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD & HRSA AUDIT FINDINGS (CONT’D)

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• Incorrect entries for primary location & contact information

• Closed outpatient facilities remained registered on the 340B database

• Incorrect name listed for an outpatient facility

• Outpatient facility of the hospital was not listed on the 340B database

• Entity was using a contract pharmacy not listed on the 340B database even though there was a written contract in place.

• Incorrect 340B database record – Incorrect authorizing official

Registration

Page 52: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

BKD & HRSA AUDIT FINDINGS (CONT’D)

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• Internal monitoring & audit procedures for 340B Program are not completed or followed

• Inadequate documentation from contract pharmacy to produce a report detailing dispensations to agree with the contract pharmacy accumulator

• Listing of eligible providers provided to contract pharmacy included all medical professionals who have credentials with the hospital rather than those with contracts

• Physicians not included on the listing of approved 340B physicians employed, under contractual or other arrangement

Compliance

Page 53: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B PROGRAM CHALLENGES – EXTERNAL INFLUENCES

Congressional intent of the ProgramDebated by some members of Congress

Several hospitals have been challenged to respond on use of funds generated from Program savings

Monitoring this issue in Congress is important

Will Medicare want a part of savings?

Several groups are lobbying to limit providers eligible for the Program

Drug manufacturers

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Page 54: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B PROGRAM CHALLENGES – INTERNAL RESPONSES

Strategy: 340B Compliance Plan for Outpatient, Mixed-Use & Contract Pharmacy programs

Demonstrates good-faith commitment to compliance

Increases likelihood of identifying & correcting mistakes

Includes multiple aspects of the Program & process for responding to concerns identified

Strategy: Reconsideration of provider-based physicians

Eligible to extend 340B savings to provider-based physicians

Strategy: Publicize benefits as a result of your 340B Program

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Page 55: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

340B COMPLIANCE SUMMARY

Compliance risks are a reality to be monitored closely

340B Program & related multiple contract pharmacy

relationships can be very beneficial but complicated

to ensure compliance

Regardless of 340B Program administrator selected,

make sure covered entity is comfortable with definitions &

policies applied to Program

Critical to stay abreast of communications

Mega-guidance to come

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Page 56: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

RESOURCES

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Resource Description

HRSA OPA HRSA Office of Pharmacy Affairs homepage http://www.hrsa.gov/opa/index.html

About 340B Program Audits of Covered Entity

HRSA Program Integrity Page http://www.hrsa.gov/opa/programintegrity/auditscopeandprocess.html

Policy Releases HRSA Policy releases regarding the 340B Drug Pricing Program http://www.hrsa.gov/opa/programrequirements/policyreleases/index.html

OPA FAQs HRSA Office of Pharmacy Affairs Frequently Asked Questions (FAQs) http://www.hrsa.gov/opa/faqs/index.html

HRSA 340B Peer-to-Peer Webinars

Register for upcoming 340B Peer-to-Peer Webinars and listen to past webinars http://www.hrsa.gov/opa/peertopeer/webinars.html

340B Prime Vendor Program

Call Center Phone: 1-888-340-2787 [email protected] Web: www.340bpvp.com

340B Prime Vendor Program FAQs

Prime Vendor Program Frequently Asked Questions (FAQs) https://www.340bpvp.com/resource-center/faqs/

Page 57: CPAs and ADVISORS...Approximately 950 CPAs Serving clients for 90+ years $450 million in revenues ... -Better quality of life-Improved clinical outcomes through access to services

THANK YOU

FOR MORE INFORMATION // For a complete list of our offices and

subsidiaries, visit bkd.com or contact:

Michael R. Earls // [email protected] // 260.460.4068