Chris Hatwig, MS, RPh, FASHP – President
Jason Atlas, RPh, MBA – Manager, 340B Education and Compliance Support
Apexus 340B Update and Medicaid Managed Care – What You Need to Know
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Provide an overview and update on the 340B program.
Describe trends in 340B Medicaid state plan amendment approaches pursuant to
the final AMP Rule.
Share best practices in 340B-Medicaid partnerships regarding duplicate discount
prevention.
Disclaimer- the information shared today is by Apexus
Learning Objectives
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• Resulted from a 1992 federal statute
• Manufacturers participating in Medicaid Drug
Rebate Program must sign a Pharmaceutical
Pricing Agreement (PPA) with the Secretary
of Health and Human Services
The manufacturer agrees to charge a price for covered
outpatient drugs that does not exceed the 340B price
340B Statute and 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)
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Certain Hospitals Federal Grantees/Designees
• Disproportionate share hospitals
• Children’s hospitals
• Critical access hospitals
• Free standing cancer hospitals
• Rural referral centers
• Sole community 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
340B Eligible Entities
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HRSA 340B Database
April 1, 2017
• 12,400 covered entities with 27,200 associated sites
• 19,340 unique contract pharmacies
HRSA 340B Database: Statistics
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Respondents report that they use 340B drug discount program savings to expand patient
access to medicines and improve pharmacy services in numerous ways*:
• 77 percent say 340B enhances their ability to serve the uninsured or underinsured
• 71 percent say it increases their ability to provide free/discounted drugs to low-income patients
• 65 percent say it funds patient counseling
• 62 percent say it funds hospital readmission-reduction programs
• 60 percent say it funds medication therapy management
http://www.340bhealth.org/news/report-340b-program-helps-hospitals-serve-the-poor-more-important-than-ever/
340B Savings
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A pharmacy that enters into an agreement with a covered entity to provide services to the
covered entity’s patients, including dispensing entity-owned 340B drugs.
What Is a Contract Pharmacy?
COVERED ENTITY CONTRACT PHARMACY 340B VENDOR
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HRSA requires the covered entity to maintain ownership
of the 340B medication up to dispensing to eligible
patient
• Inventory via “bill to – ship to” wholesaler arrangement
• Covered entity receives invoice
• Contract pharmacy receives inventory without 340B pricing
information
Contract Pharmacy Bill To – Ship To Overview
Bill ToShip To
WHOLESALER
COVERED ENTITYCONTRACT PHARMACY
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Physical inventory vs. virtual inventory/replenishment
340B status determination
Can the entity/pharmacy determine 340B status at the point of adjudication?
• Flat file
• HL7
• Combination
340B Inventory Models: Unique/Challenging
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Apexus Solutions
Federal contract with HRSA’s Office of Pharmacy Affairs
• Supplier and distributor contracting
• 340B University and 340B U OnDemand
• Apexus Answers call center
• Advanced operational training by the industry leader in 340B education
• Industry standard for validated 340B expertise
• Provides specialized training targeting compliant 340B implementation
• 50+ hours of comprehensive policy and implementation instruction
• The health system solution for specialty pharmacy
• Improves access
• Open to organizationsof all sizes and types, regardless of GPO affiliation
340B Prime Vendor ProgramAdvanced 340B Operations Certificate Program
Acentrus
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HRSA Audits by the Numbers
FY 2012(As of
07/29/16)
FY 2013(As of
07/29/16)
FY
2014(As of
07/29/16)
FY
2015(As of
07/29/16)
FY 2016(As of
11/15/16)
FY
2017*(As of
3/30/17)
Number of covered entities
audited
51 94 99 200 200 70
• Outpatient facilities/sub-
grantees410 718 1,476 2,720 4,011 1,002
• Contract pharmacies 860 1,937 4,028 4,443 3,531 1,501
Number of finalized reports 51 94 99 200 148 6
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Civil Monetary Penalties (CMP) interim final rule has delayed the effective date to 5/22/2017
– HRSA sought comments through 4/19/2017
– HRSA may delay further until 10/1/2017
Mega-Guidance
– OMB withdraws HRSA mega-guidance
ACA Reform
Regulatory Updates
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340B UniversityTrends: Medicaid and 340B
Apexus is supporting:
• Access to State Medicaid 340B contact and policy information
• Sharing Best Practices for reimbursement and duplicate discount
prevention
• HRSA, who is working with CMS to identify solutions in the
Medicaid space
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340B price Medicaid rebate
Duplicate Discount Prohibition: FFS and MCO
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HRSA 340B Database: Medicaid FFS
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How does the Medicaid Exclusion File work? FFS Medicaid
State
340B
Discount
Medicaid
Rebate
Covered Entity
Manufacturer
Medicaid
Exclusion
File
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Medicaid Exclusion File
• MPN and/or NPI
Medicaid Drug Rebate Data Flowchart – Medicaid MCO
State Medicaid
Claims Administrator
Office of Pharmacy
Affairs
Covered Entity
Medicaid MCO
Health Plan
Manufacturer
MCO Claim Data Elements
• Patient Identifier
• NDC
• Units
• Medicaid Provider Num/NPI
• Claim modifier indicating
340B drug (some states
Covered Entity fails to carve out
managed Medicaid utilization or dual
eligible utilization
MMCO Health Plan fails to
utilize Exclusion File or other
mechanism before providing
rebate to the state
MCO Claim Data Elements
• Patient Identifier
• NDC
• Units
• Medicaid Provider Num/NPI
• Claim modifier indicating
340B utilization
Covered Entity fails to list all MPNs or NPIs
Medicaid Exclusion File
• MPN and/or NPI
State agency fails to properly
utilize most current Medicaid
Exclusion File or other
mechanism
Rebate Request Data Elements
• NDC
• Units
• Claims-level detail available from some states
upon request
• Excludes claims where MPN or NPI on
Medicaid Exclusion File or claims with a
modifier indicating a 340B drug was utilized
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Retail:
Entity-Owned
Retail:
Contract
Physician
Administered Drugs
Fee for Service
Managed Care Medicaid
340B Medicaid Framework
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HRSA, CMS and State 340B Policy
HRSA Policy: CE must
• Prevent duplicate discounts
• Use the Medicaid Exclusion File
• Bill according to the state policy
CMS Policy: States must
• Collect rebates on claims
• Establish 340B reimbursement methodology
State Policy: States and CE must
• Prevent duplicate discounts by…
• Adhere to Medicaid reimbursement guidance by…
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The COD final rule was published on February 1, 2016, and provided required changes that
all States must make in their reimbursement for Medicaid fee for service (FFS) claims.
The states must reimburse 340B entities and their contract pharmacy providers for FFS
based on:
• Actual acquisition cost (AAC) plus
• A professional dispensing fee (PDF) established by the single state agency.
The covered entity (CE) has primary responsibility for preventing duplicate discount for
FFS claims while the burden shifts to the state for managed care claims.
Although the COD Rule does not directly address duplicate discounts, it is very important
that the risk of duplicate discounts is mitigated in the development of a State Plan
Amendment (SPA) – Medicaid and CHIP Managed Care final rule – CMS-2390-F
CMS Covered Outpatient Drug (COD) Rule and MCO Rule
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The states must develop a SPA that contains
reimbursement methodology that the state plans to use
to establish the 340B ceiling price as well as the
professional dispensing fee, and state how this
methodology will be incorporated into its FFS pharmacy
reimbursement policies. This SPA addressing 340B FFS
reimbursement changes must be in effect on April 1,
2017 and filed with CMS by June 30, 2017.
State Plan Amendment (SPA)
State
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• NADAC
• 340B MAC
• 340B Ceiling price
• 340B AAC
• SCC
• COD Survey
• FUL
• National Average Drug Acquisition Cost
(The new AWP)
• 340B calculated Maximum Allowable
cost
• Submission Clarification Code – NCPDP
standardized D.0 fields for claims
• Cost of Dispensing Survey
• Federal Upper Limit
State Plan Amendment (SPA)
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The MMCOs are NOT required to abide by the COD rule and are not required to reimburse
product at AAC plus a PDF determined through a cost to dispense study. The
reimbursement rates are typically determined by the contract between the MMCO (or their
pharmacy benefit manager), and the pharmacy network provider.
Medicaid managed care programs are not directly impacted by the regulation with the
exception that the States are required to collect rebates on the drugs that are provided by
contracted MMCOs.
–The managed Medicaid program is required (which should be in their contract with the state)
to state what encounter claims are to be submitted and how those ineligible for rebate (340B)
are identified.
COD Rule and MMCO
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Decision for FFS will be considered the same decision for MCO – carve-in or carve-out
• Some states utilize MEF
• Some require attestation to the state on decision
Retail Claims
• 340B ceiling vs. 340B AAC vs. 340B calculated price vs. 340B MAC price
Physician Administered Drugs (PAD)
• 106% of ASP vs. 340B AAC
FQHC reimbursed at different rates in comparison to hospitals
Some states considering carving out pharmacy benefit from Managed Care plan and retaining
within FFS
Contract Pharmacy
• FFS exclusions. What about Managed Care exclusion?
• Oregon model for retrospective identification of contract pharmacy
State Plan Amendments – What are the Trends?
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Submission Clarification code requirements
• Works only with closed door in-house pharmacy and only in
simple health systems
• Ineffective in complicated settings that utilize retrospective
340B identification software systems
• Ineffective for contract pharmacy using replenishment
Reimbursement
• Contracts with different reimbursement for 340B participants
and their contract pharmacy
• Requirements for pharmacy to provide the 340B Actual
Acquisition Cost
340B Participant challenges with PBM contracts
“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)
© 2017 Apexus. Reproduction without permission is prohibited | 26
Questions
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