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RoseMarie BabbittHRSA Contractor
340B Drug Discount Program
Understanding the Audit Process and Preparing your Pharmacy
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Objectives
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Overview of 340B Drug Discount Program
Define the purpose of the HRSA Audits
Identify key practice areas to regularly ensure compliant programs
Describe methods to prepare a 340B entity for internal and/or external audits
Our Mission To promote access
to clinically and cost effective
pharmacy services
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Office of Pharmacy Affairs
ACCESS
QUALITY
OUTCOMESClinically & Cost
Effective Pharmacy Services
OPERATIONS
Clinically and Cost-EffectivePharmacy Services
Intent of the 340B Program
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Permit eligible safety net providers “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)
340B Program: Overview and Benefits
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Provide outpatient drug discounts to certain safety-net covered entities
Average savings of 25-50%.
Savings may be used to:
Reduce price of pharmaceuticals for patients
Expand services offered to patients
Provide services to more patient
Estimated $6 billion dollars in 340B drug purchases last year Manufacturers that participate in Medicaid must also participate in the
340B Program
Administrator of 340B Program
Program oversight to help maximize value of 340B
Service as Federal resource on pharmacy
Functions of OPA
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OPAmaintains datafor each 340Bentity. Annualrecertification
Transparencyin drugpricing
FederalRegisterNotices
Accurate &consistent
interpretationof law/policy
In all of its functions, OPA prioritizes program integrity
Website FAQ,PSSC CallCenter, &PharmTA
340B Program Integrity Resource
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Eligible Entities
Federal Grantees Hospital Types
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Comprehensive Hemophilia Treatment Centers
Federally Qualified Health Centers
Urban/ 638 Health Center
Ryan White Programs
Sexually Transmitted Disease/Tuberculosis
Title X Family Planning
Disproportionate Share Hospitals
Critical Access Hospitals
Rural Referral Centers
Sole Community Hospitals
Children’s Hospitals
Free Standing Cancer Hospitals
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Recent OIG Study: June 2011
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State Medicaid Policies and OversightActivities Related to 340B-Purchased Drugs
OIG Recommendations:• CMS to direct States to create written 340B policies• CMS to inform States about tools they can use to
identify claims for 340B-purchased drugs• HRSA to share 340B ceiling prices with States. (HRSA
will need to seek legislative authority to implement)• HRSA, in conjunction with CMS, shall improve the
accuracy of the Medicaid Exclusion File
GAO FINDINGS
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Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement “GAO-11-836, Sep 23, 2011”
Oversight of the 340B program is inadequate in providing reasonable assurance that covered entities and drug manufacturers are in compliance with program requirements.
The 340B program has increasingly been used in settings, such as hospitals, where the risk of improper purchase of 340B drugs is greater.
GAO Recommendations
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GAO Recommendations include:Covered Entity Audits Patient DefinitionNondiscrimination by ManufacturersHospital eligibility
HHS RESPONSE TO RECOMMENDATIONS
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I. Covered Entity Audits Continue to work with manufacturers Target educational programs to diversion
II. Patient Definition Review and develop within context of PPACA changes
III. Nondiscrimination by Manufacturers Comprehensive education plan on existing policy Work with manufacturers to provide clearer guidance on working with HRSA
on allocation. Continue to work with DOJ.
IV. Hospital Eligibility Publicize existing criteria Initiate recertification process Develop and implement comprehensive educational plan.
ACA Provisions: Focus on Program Integrity
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Manufacturer Integrity (Civil Monetary Penalties) – HRSA published Advanced Notice of Proposed Rulemaking September 2010
Covered Entity Integrity Pricing Changes and Transparency (Regulations & on line
access in 340B data system) Administrative Dispute Resolution - HRSA published
Advanced Notice of Proposed Rulemaking September 2010 Annual on-line recertification of all entities
Policy Releases
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November 2011-Penny Pricing
-Manufacturer audits
March 2012-Covered Entity Audits
May 2012-Non-discrimination
-ACO’s
February 2013-Medicaid Exclusion file
-GPO Prohibition
Identified Compliance Issues
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Diversion Non-eligible entity or entity service (inpatient) Non-eligible patient Reselling of product
Process Unusual purchase patterns Unusual ratios of inpatient purchases Outpatient purchases of primarily inpatient medicine
Issues Definition of patient Duplicate discounts Multiple ship-to sites Split billing software and credit /re-bill activity Healthcare reform impact (ACOs, integration)
Program Prohibition: Diversion
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What constitutes “Diversion”? a drug that is provided to an individual who is not a patient
of that entity a drug dispensed in an area of a larger facility that is not
eligible (e.g. an inpatient service, a non-covered clinic) Entities should enroll all eligible outpatient or satellite
sites
Required to follow patient definition guidelines 61 Fed. Reg. 55156 (October 24, 1996)
Program Prohibition: Duplicate Discounts
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Duplicate Discount = Accessing 340B Discount AND Medicaid Rebate on the same drug
Inform HRSA at the time of enrollment whether the CE plans to purchase and dispense 340B drugs for their Medicaid patients and bill Medicaid.
HRSA maintains this list known as the Medicaid Exclusion File on HRSA’s public Website
HRSA Guidance“Medicaid Exclusion Tutorial” and “Medicaid Exclusion File Basics”
(http://www.hrsa.gov/opa/medicaidexclusion.htm). Final Notice, Duplicate Discounts and Rebates on Drug Purchases
published at 58 Fed. Reg. 34058 (June 23, 1993).
GPO Prohibition
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340B Statute states the hospital “- does not obtain covered outpatient drugs through an
group purchasing organization or other group purchasing arrangement…”
A condition of 340B eligibility forDisproportionate Share Children’s Hospitals Free Standing Cancer Centers
Registration: GPO Prohibition
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OPA GPO certification form, signed by authorizing official states 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 OPA website." OPA GPO Certification Form
Audits – HRSA conducted
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All covered entity types considered for risk-based audit selection Risk-based factors length in program, number of outpatient facilities, number of contract pharmacies, complexity of program, volume of purchase
Target audits – focus on specific allegation Conducted by HRSA regional staff
A summary on the audit process is available at http://www.hrsa.gov/opa go to Program Integrity Page
HRSA Audits
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FY 2012 45 risk based, 6 targetOnsite portion of audits completedResults are preliminary until finalized by OPA Finalized and posted
FY 2013Audits have begunNumber not yet finalized
HRSA Random/Targeted Audit Process
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Pre-Audit Engagement letter from HRSA Teleconference, document requests, scheduling
Onsite Audit Auditors obtain, review, examine data Exit interview, preliminary findings
Post-Audit Auditors provide preliminary findings to OPA OPA reviews preliminary findings, addresses concerns OPA finalizes report, post summary on website
On-site Process
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Audit Focus Areas Eligibility status - GPO Policies and procedures – procurement, inventory,
distribution, dispensing, billing Internal controls Policies, procedures, & records – Diversion Procurement & distribution – duplicate discount Sampling
Audits – Manufacturer conducted
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Authority Reasonable cause Independent auditor Submit workplan to OPA prior to conducting – December 12, 1996
(61 Fed. Reg. 65406 Encourage manufacturers to submit plans and we will work closely
with them throughout the process
HRSA has received 6 workplans – 4 have been approved to move forward with audits
One manufacturer audit report has been finalized Encourage manufacturers to share lessons learned
So now what…….
As a Compliance Professional
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Contact your pharmacy
Perform Reviews Processes, Policies and, Procedures
Add a 340B audit as a line item on your annual work plan
Check the OPA database and confirm information
Understanding the Process
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Audits are an ongoing process to ensure integrity of your use of the 340b
drug pricing program1. What to audit? audit prescription transactions as well as any onsite use or
administration of drugs2. How to choose the audit selection?
100% of transactions Sample transactions Random selection methods-
o Random number table creationo Extrapolation of results
Preparing Your Pharmacy
1. Audit records often, or at least monthly, to correct errors in a timely fashion.
2. Report audit results internally to Performance Improvement , Risk Management or Compliance
3. Provide any evidence of process changes made that are related to an audit finding.
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Preparing Your Pharmacy
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4. Have your own audit records and reports ready for review by the auditor.
5. Be able to describe the audit method(s) used by your Entity for a review of records.
6. Show corrective actions taken when discrepancies are found.
Available Resources
►OPA website: www.hrsa.gov/opa
►Apexus website: www.340BPVP.com
►Apexus Answers ►Call Center M-F 7:30 am-5:30 pm cst►Email: ApexusAnswers@340bpvp.com ►Live chat ►Phone: (888) 340-BPVP (340-2787)
►340B University tools & resources►www.340bpvp.com/resource-center/340b-university
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