340B Program Updates – Been Awhile

Is that an Elephant in the Room?


340B Elephant-in-the-RoomHi All! Yes, it has been awhile (we have been auditing, a lot!). Our sincere apologies, we need to bring back our 340B Blog A game. The team at Turnkey Pharmacy Solutions has been growing and the leadership team is learning how to handle the growth and work effectively with our team. In addition to Roxanne, we now have Jen and Annie supporting audits with our core team (and a few per diem staff as additional support). We also added an operations manager to oversee operational functions of the organization (so excited for Chelsea to start on April 4th!) We are not the only ones with change, the 340B program has had significant changes recently, and we are going to share two big ones! Hold on to your hats . . .

Inpatient Discharge Prescriptions: A big shift for HRSA has been a March 5th, 2016 decision (unannounced, but confirmed by multiple HRSA 340B audited sites) that discharge prescriptions for “inpatients” will not qualify for 340B. We believe the primary reason being used is that the inpatient location is not a qualified location (i.e., not in the outpatient reimbursable area of the cost report). This is a tough one for the 340B hospitals, it is common for patients who cannot afford their medications to receive it via a charity care process at discharge. Based on HRSA’s current interpretation, you cannot use 340B purchased drugs if the patient had a patient status of inpatient at discharge. There are defensible positions that could be used, and we recommend reaching out to your legal team and/or 340B consulting group for guidance to review your specific situation. If you are part of 340B Health, a technical assistance call may also be beneficial. The elephant in the room is if this could be viewed as an attempt to move forward with 340B Omnibus Guidance (since this was in the Omnibus Guidance) before final publication in the Federal Register. Things that make you go . . . Hmmmmmmmm![Follow-up on this one – HRSA retracted this a few weeks after this article, so until the 340B Omnibus Guidance is out, we should be okay]

Track & Trace – Contract Pharmacy: Well, March 1st has come and gone. DSCSA (Track and Trace) for dispensers (pharmacies) is now in effect. The FDA can now audit pharmacies for compliance, and I for one am very concerned about contract pharmacy and DSCSA compliance. It was timely, 340B Health has a bulletin that went out today that confirms that the FDA is not going to exempt the contract pharmacy relationship. So what does this mean? Well, the FDA considers the entity that purchases the drug as the owner. In a contract pharmacy arrangement, the covered entity buys the drug, but ships it directly to the contract pharmacy from the wholesaler. This is not addressed in the DSCSA specifically, and therefore those “3Ts” (transaction information, transaction statement, and transaction history) should exist between the covered entity and the contract pharmacy. Currently, the most common approach is to sign some documents that allow the wholesaler to provide the covered entity’s 3Ts in a view rights format to the contract pharmacy. This is better than nothing, but the problem is that the contract pharmacy is receiving drug for which they have no 3Ts with their name on it. It will only have the covered entities name on it. How will this look if the FDA audits your contract pharmacy? Are you at risk of having your contract pharmacy program halted because your contract pharmacy cannot receive drug from you? A process that can provide the 3Ts to the contract pharmacy such that the contract pharmacy is listed on the 3Ts and the DSCSA criteria are met is critical. This may be a huge issue as we move forward, and have partnered with Drug Track IQ to create a solution to help protect your contract pharmacy process. If you are concerned and want to learn more, go to Drug Track IQ and see how their program can help you meet the DSCSA requirements.

We know those are two large items to chew on. There is so much more I want to share based on the 130 plus audits we have conducted and 13 HRSA audits we have attended, and will commit to writing more articles soon. If you have any questions or comments, please use our contact email and one of our team members will respond. Thank you and Aloha, -Rob

340B Coalition Day 1 of 3 & Update

Pre-Conference Work Shop

340B Conference in DCQuick Update on Turnkey Pharmacy Solutions: Wow, I cannot believe it is conference time already. We intended to get a few more blog articles out before now, but work got in the way (I hate it when that happens). This is a good thing, since it means we are onsite with covered entities and gaining more and more experience to share (as long as we get to the sharing part). We have been onsite for 5 HRSA audits in the last few months as well as many 340B independent audits. We actually have plans to share what we are seeing, both best practice and compliance concerns. We are going to share this in the next few months, and are deciding the best way to do this (maybe a free Webinar). With Rich Bucher being full-time and adding Roxanne Nevarez to our auditing team full-time, we are at a good place for supporting more clients and are now at this conference with a booth (and hopefully I do not have another 8-week stretch of travel, which I must thank my wife for putting up with me for that period of time).

Before I get into some highlights, I must send some love to 340B Health (a.k.a., SNHPA – still getting used to the name change). They put a lot of time and effort into making this conference both educational and a great venue to attend. My highlights below are simply that, some keys I pulled out to share. There is so much more content and tracks for education, I am covering a small fraction of the content in our blog. I know travel budgets are tough, but strongly recommend you attend one or both of the 340B Coalition meetings in the future (plus we hand out really awesome Utah mint truffle chocolates at our booth).

Pre-Conference – Implementing Effective Compliance Plans:

Started with Kevin Jones (he and I were both pharmacy directors of 340B hospitals at the same time at Intermountain Healthcare). Kevin shared what he does from his new role as the 340B Program Director. They have a robust compliance plan, and here is the biggest key I took away: Education is key and they do a quarterly education (off-site location and runs about 6 hours) training. We started this when I was still there, and it provides education on key updates and for new staff supporting the program to learn quickly what they need to know. Great idea!

Next was Shaun Phillips from Bronson Battle Creek Hospital. Love this guy, he was awesome. Shared details about their program and what they do for compliance. Shaun highlighted the need to have a dedicated 340B Analyst to support their program. He also noted the difficulty in finding the right person: Pharmacists are expensive, wanted some pharmacy knowledge, accounting background, and some general idea about 340B at minimum. They finally found the right person and as luck would have it, received their HRSA audit letter. That is baptism by fire! Shaun is right though, you need a dedicated resource for most medium to large covered entity sites (partial resource if you are smaller).

Last was Cynthia Williams from Riverside Health System. She hit on another key topic that is related to split-billing software maintenance. This is a key for us as well. If you are new to the program, do not underestimate the time and resource it will take to maintain a split billing software system. Cynthia also added a 340B Analyst, and stated “this should be a no brainer.” However, when your system is doing a RIF (reduction in force) it is still a tough ask! Cynthia educated CFO and COO on program complexity, growth, and financial impact. She used resources with 340B Health and Apexus as well. They ultimately hired a pharmacy technician buyer with significant 340B experience. Nice work Cynthia!

All three speakers mentioned having a 340B Oversight committee – we feel this is a Best Practice for all covered entity organizations. This committee should have C-Suite leadership and pharmacy, finance, and IT support as well. Also good to add compliance and legal when needed. We recommend meeting quarterly.

Okay, that was the pre-conference workshop for us. More to come on when we officially start the conference this afternoon. Aloha, -Rob

Update Days 1 and 2: Health Care Compliance Association (HCCA) 19th Annual Compliance Institute


340B UpdateThis is Turnkey’s first year participating in the HCCA Compliance Institute annual meeting. Interestingly, I spoke about 340B at this conference two years ago and while there was a fair amount of interest at that time, 340B was still relatively unknown to most attendees. That was not surprising, however, given that the HCCA institute is really directed to health care compliance in general, with topics like patient privacy /protected health information (PHI), Stark Law, Fraud, Waste & Abuse, physician compliance, and quality of care auditing getting most of the attention from the compliance officers, health care leaders, and compliance professionals in attendance. While this focus has not changed significantly, it is interesting to see that there is more focus on the 340B program this year. For example, today there is a session specifically directed to enforcement of 340B by HRSA. Given the number of HRSA audits that our team has been on-site for in the last 18 months (approximately 50 covered entity audits and 10 HRSA audits), this should prove to be an interesting discussion for us to participate in. So far, we have been hard pressed to find anyone (other than HRSA auditors themselves!) that has been involved with as many HRSA audits as we have. In addition to the 340B enforcement session this afternoon, later this week there are a couple of sessions directed to 340B in general planned. These should be interesting, and of course there will be more to come from us reflecting on these sessions.

Regarding compliance in general, one of the most interesting sessions here so far was the Office of the Inspector General (OIG) update during the general session. Speaking was Inspector General Daniel Levinson, of the U.S. Department of Health & Human Services (HHS). Mr. Levinson’s discussion focused on the concept of a “knowledge worker” and Peter Drucker’s work regarding our shift to a knowledge society. Of particular interest was Mr. Levinson’s focus on a knowledge worker’s ability to take raw data and transform it into meaningful information that can be put to practical use with respect to maintaining compliance. In the context of 340B, this is very relevant to what covered entities often struggle with. All too often our clients are faced with the dilemma of having a great deal of information about their 340B operations, whether it be from vendors or their own internal processes, that they are unable to put to practical use. This is not surprising, however, given the fact that transforming these data into meaningful information typically requires 340B-dedicated resources with significant experience and training. While this may include internal resources, such as pharmacy and compliance staff, an outside perspective that can be provided by 340B-focused is essential. This is where Turnkey comes in; with close to 50 covered entity audits and on-site support of 10 actual HRSA audits, we can help transform your 340B data into meaningful information and strategies for compliance. More to come as this HCCA conference progresses!

Thank you, -Rich Bucher (from the HCCA Conference in Lake Buena Vista, FL)

340B University & Happy Holidays

Merry Christmas & Happy New Year


Happy HolidaysDespite our crazy travel schedule lately, I was able to carve out a weekend to attend 340B University in Anaheim, California on December 7th. 340B University is sponsored by Apexus, who is the prime vendor for the 340B program. Apexus’ mission is to leverage their resources and expertise to deliver maximum value to 340B stakeholders, as well as to contract for the lowest sub-ceiling drug prices. Plus, it is free to attend!! I strongly encourage all 340B Stakeholders to attend this at least once, or even better once a year.

Rob Nahoopii, Turnkey’s illustrious CEO, is on the 340B University faculty, and gets to present on various topics 5 or 6 times a year. There always seems to be a little friendly competition among the faculty to see who can grade out the highest. Not surprisingly, Rob frequently comes out on top!

Although the presentations generally cover the basics of the program, each time I go, I feel that I learn something new. Since my background is Finance related, I enjoy the discussions about 340B pricing. Several panel members remind us that the 340B price is one of the most difficult formulas used in the crazy world of pharmaceutical pricing.

Another interesting discussion centered on auditing. One scenario that was asked was if a covered entities Internal Audit department was sufficient to conduct audits. Both panel members like the idea of having internal audit help, but both highly recommended a fresh set of eyes to review your program, and bring in a competent, external company to review your program.

Rob and I are on a plane now, coming back from an audit of 3 covered entities in North Carolina. It certainly has been a crazy year. We have truly enjoyed meeting new people, seeing new places, and sharing our knowledge of the 340B program. This year, we have completed over 40 audits, and have visited 20 states. If we can be of assistance in your 340B journey, please reach out to us. From all of us at Turnkey Pharmacy Solutions, we wish you all Happy Holidays!!

Rich Iverson

340B Update October 2014 “Know Your Medicare Cost Report”

Medicare Cost Report


340B Medicare Cost ReportIn this month’s article we will focus on the Medicare Cost Report and provide some updates for the 340B program.

Well, it is October and we are still awaiting the arrival of the 340B Mega Reg. In a way, it almost feels like an upcoming dentist visit.

– At first, you sort of dread it and prefer it not happen at all.
– Then, the waiting becomes painful (more painful then just getting it done).
– Until, you simply hope it gets here soon so you can get it over with.

I think knowing is better than the agony of anticipation. For the love of all that is holy, I hope OPA receives the green light to relieve us of our suffering soon. . . I JUST WANT TO KNOW!!!

In a more recent news update, it appears that PhRMA has decided to go ahead and file a follow-up law suit on the Orphan Drug clarification. It will be interesting to see how this one plays out. We still have some manufacturers that have not provided Orphan pricing to ACA covered entities (i.e., CAH, SCH, RRC, CAN covered entity types). There is also some discussion around the idea that these manufacturers may have to pay back covered entities that could have bought drug at 340B, but were not extended the 340B price. Hopefully we can get some clear decisions on this so that this does not drag out too much longer.

We do need to offer congratulations to Apexus for being awarded the OPA contract through 2019. I personally feel they provide a great service and Apexus Answers is a great resource for all involved in the 340B program. Also, the Apexus 340B University is the best training for those involved in the 340B program (and for the record, the 340B Basics for Hospitals in San Diego at NACHC this past August had the best all around survey score, EVER! . . . Who did that one again?). Glad to have you around for years to come!

Focus for this article: Medicare Cost Report (Caveat: for clinic covered entity types, you will need to review your scope of services. Some of the same information applies related to departments and service lines.)

Do you know your Medicare Cost Report? More than ever, if you are in a leadership role with your 340B program, you need to become knowledgeable about your Medicare Cost Report and the associated Trial and Balance Sheet. Why?

– It is the source of truth for what qualifies for 340B in your hospital.
– For qualified areas with a different physical address, they need to be registered as Child Sites.
– For Child Sites, all departments and service lines identified on the Trial Balance need to be registered separately.

This is a level of detail that recent HRSA audits have focused on. If you have a child site that is a hospital for instance, every department and service line visible on the Cost Report and Trial Balance that either administers 340B drugs or writes a prescription that could be filled as 340B need to be registered as a separate Child Site.

Here is a good FAQ from Apexus FAQs on this subject:
FAQ ID: 1975
Last Modified: 03/18/2014
Q: How do I know if an off-site outpatient facility is eligible for 340B as a child site and should be added to the 340B database?
A: Off-site outpatient facilities are eligible child sites of a 340B covered entity in the following circumstances: (1) The outpatient facility is listed as a reimbursable facility on a 340B hospital covered entity’s most recently filed Medicare cost report. If the facility is a free-standing clinic of the hospital that submits its own cost reports using a different Medicare number (not under the covered entity’s Medicare provider number), then it would NOT be eligible. (2) The facility is included in a non-hospital covered entity’s scope of grant or part of the scope of services. An off-site outpatient facility meeting one of these criteria must register and be listed on the 340B database before it can access 340B drugs for eligible patients.
For hospitals, all clinics located off-site of the parent hospital, regardless of whether those clinics are in the same building, must register as child sites of the parent 340B-eligible hospital if the covered entity purchases and/or provides 340B drugs to patients of those facilities. For example, if the off-site outpatient facility is a hospital, all clinics/departments within that off-site location that plan to purchase and-or provide 340B drugs to its patient must register as a child site.
Outpatient clinics/departments within the four walls of the 340B parent hospital do not need to also register for the 340B Program. However, the covered entity remains responsible for demonstrating that those outpatient clinics/departments within the four walls of the parent hospital are only using 340B drugs for eligible outpatients and meet all 340B Program requirements, as demonstrated through auditable records.


Between now and the end of the year, determine if your covered entity site needs additional child site locations enrolled. This is one of those better safe than sorry, so register it if has a different address and can be seen as a separate department or service line.

As always, please let us know if you have any questions or need some help. Also, if you are interested in having your covered entity site receive a full independent audit of your 340B operations, come see us at Turnkey Pharmacy Solutions.

Thank you and Aloha, -Rob Nahoopii

340B Program Updates August 2014

340B Updates

340B Mega RegWe are finding our groove at Turnkey Pharmacy Solutions and rededicating time to providing timely and relevant content to the 340B community here at the 340B Program Blog. I have heard from many people at the 340B Coalition Conference and at 340B University that you actually read it and like it! That was awesome to hear, thank you! Please read through and respond to the request at the end, it will benefit everyone.

In this article, you will learn about our takeaways from our latest independent audits we performed and a recent 340B University. This includes some Mega-Reg fun, Medicaid and Medicaid Managed Care, new registration changes, Orphan Drugs, and an important compliance tip on 340B contract pharmacy compliance.

Mega-Reg: Well, we are coming to the end of August and we still do not have a visual on those highly anticipated Mega-Regs. Do you remember the Disney classic Lion King? Toward the beginning of the movie, the three hyenas are talking about Mufasa (the current lion king, Simba’s dad) and the hyena voiced by Whoopi Goldberg hears Mufasa’s name and shudders and says that name has so much power, just hearing it makes her shiver, and of course she says “say it again!” That is how I feel about the mega-reg. Just the name alone conjures of emotion (some of it is fear, some excitement). I know our colleagues at OPA are just as anxious as we are, and want to get it out for review. However, they have likely learned a lot from the Orphan Drug push back and court decision, which is likely the cause for the delay. Appropriately presenting the Mega-Reg (…shiver…) is critical for its success. Mega-Reg, Mega-Reg, Mega-Reg!!! (can you feel it!)

Medicaid and Medicaid Managed Care: We are definitely seeing a lot more managed care Medicaid groups working with their corresponding state Medicaid agencies to obtain the Medicaid rebate (which is ultimately done by state Medicaid). If you are carving in (or carving out), make sure you know what your state Medicaid is doing in relation to managed care Medicaid, what to do if they are paying secondary, and if your managed care Medicaid has any billing requirements. Also ensure that both your hospital/clinic administered drugs AND contract pharmacy/in-house arrangements are properly dealing with Medicaid (or excluding it as needed). This is a focus for HRSA, so make sure you are getting it right!

Recertification and New Registration: As a reminder, make sure you recertify by September 10th (hospitals). For CAHs, it is pretty easy and fast. Other hospital types, you will need your DSH calculation on your most recently filed cost report. If you are newly registering, please note that OPA now has your recently filed cost report loaded for child site selection; however, if you do not see your child site, then you will need to manually add it. One major change to new registration is the requirement for the government person attesting to your relationship or status now having to approve of this relationship via email. If this is not done in the specified time, you will not be enrolled in the program. We heard that the recent July enrollment had 75 covered entities that were initially not enrolled, they re-opened the program to allow for more time and all but 5 made it. They may not be so generous next time, so make sure your government person knows they need to respond to the email from HRSA when it comes.

Orphan Drugs: It appears some of the 11 drug companies are still holding out for legal clarification before they return pricing on orphan drugs for CAH, SCH, and RRC hospital covered entity types (i.e., those subject to the Orphan Drug Exclusion). Some have returned pricing (Thank You). Our critical access hospitals can really use the help when they use these orphan drugs for their non-orphan indications. One compliance recommendation: regardless of your split billing vendor or if you use a manual process. Whenever you identify a qualified orphan drug (i.e., used on an outpatient for the non-orphan indication and duplicate discount is prevented) then track this patient and drug administration on a spreadsheet with the indication. For recurring patients, you can simply list the administration for tracking since you already have the indication. This is then readily retrievable in the event of a HRSA audit and a good check for you to know you have confirmed indications.

Contract Pharmacy Compliance Tip: Pay careful attention to your patient encounter data you are sending to your vendor. We always recommend removing patient visits that never generate prescriptions (even if they technically qualify). These areas include lab, imaging, IV infusion, physical therapy, etc. You could also send all the data to your vendor and have them exclude areas if that is an option. It should also go without saying that you need to exclude non-qualifying areas (i.e., non-reimbursable areas of your cost report). Check this feed at least annually to ensure nothing has changed or been added to, . . . Stuff Happens!

Request From Us: For future articles, we will definitely continue to write on what’s hot and in the news for 340B; however, we also know that those of you on the front line are dealing with different issues. Please send us your questions and issues you are having and we will respond to them in future articles. You can send us your questions and issues by emailing them to contact@turnkeyrxsol.com.

Aloha, -Rob

340B Compliance – The Higher Standard


TetonsI am sitting just outside of my Cabin at the base of the Teton Mountain range on the Wyoming/Idaho border (I just took the picture to the left from my porch). It is my time for recharging and evaluating goals. I am also reading “A Higher Standard of Leadership” by Keshavan Nair, and am finding some universal truths that apply to our 340B Program. I will share some of these thoughts and of course discuss the 340B Program in the following article.

As for the Turnkey Pharmacy Solutions team, we have been crazy busy supporting existing clients and completing at least one audit a week for the past five weeks. We were able to visit some great covered entity sites that are truly engaged, and who are endeavoring to have a compliant 340B Program. We are also preparing for the DC 340B Coalition Conference next week, where we have a booth and Rich Bucher, from our team, is speaking at the conference. Stop by and say hello if you are there.

340B Updates: We are still waiting to see the ultimate outcome of the Orphan Drug clarification as we have not seen all pricing return to CAH wholesaler accounts since the OPA clarification a few weeks ago. Mega-Reg (Mega-Clarification) is still in the air and maybe we will learn something at the conference. It was during last year’s conference (or near it anyway) that the non-covered outpatient drug clarification around bundled drugs was brought to light, and we are hopeful more clarifications will come soon. The one thing we know for certain is that recertification is coming for hospitals in August, AOs should get notice around August 1st and have August 6th through September 10th to complete the recertification. If you are in Washington, an update came from one of the Washington state hospital organizations that stated July 15th is the deadline, but that is the deadline for this quarter’s enrollments and not recertification.

So, what is the universal truth that the beautiful Teton Range and my current reading inspired? A Single Standard of Conduct through living absolute values. By absolute values, I mean things like truth, honesty, and integrity. These are values that can bring order to chaos (the 340B Program can feel chaotic at times). If we espouse to have a compliant 340B Program or to help clients have a 340B Program, or if we are a manufacturer and simply want our customers to have a compliant 340B Program, then the heart of the matter (from my perspective and experience working with covered entities) is to find a way back to your absolute values.

Using truth, honesty, and integrity as core absolute values with the 340B Program, we will appropriately resource compliance activities and make the time to ensure we are doing things right. We will apply the current patient definition in a manner that we can honestly say and feel we are compliant and not stretching the rules to meet our needs (is what we are doing pass the sniff test?). We will develop processes that safe guard against diversion and duplicate discount. As vendors we will support our clients and help them with their compliance activities. As manufacturers we will work with covered entities for appropriate use of the 340B Program, and as consultants we will provide honest and accurate information to help our clients make the best decisions possible.

“We must be on guard against ideology, tradition, and organizational goals masquerading as absolute values. These Pseudo-absolute values include . . . capitalism, free markets, and organizational survival. When we turn these into absolute values, we may sacrifice what is fundamental at the altar for what is expedient.” – Nair

I think Nair makes a great point about how easy it is to substitute our company’s goals or values for an absolute value. If I may I ask, take a look at how your company is currently managing your 340B Program or dealing with covered entities and determine if you are living by absolute or pseudo-absolute values. If it is the later, it is time for a change. The program is too important in the current healthcare landscape, we still have numerous patients without insurance that need non-profits and government institutions to cover their needs. I have also seen underinsured go from poor medication compliance due to cost to improved compliance with chronic medical conditions directly due to the 340B Program (e.g., diabetes, COPD). The 340B Program has been critical for many organizations to continue to provide the level of needed care, or in some cases to simply keep the doors open. I have seen this first hand and believe this to be true, but it gives us no excuse to not manage the 340B Program in a compliant manner. We must strive for the higher standard based on our absolute values in order to consistently do the right thing not only for covered entity organizations, but for our patients.

340B Orphan Update and Catching Up

Recentish (it may be a word) Updates in the 340B World


340B Orphan Drug Judge***Orphan Update*** – On May 23rd, 2014, a District of Columbia Judge, Rudolph Contreras, ruled that HHS does not have rule making authority to direct how the Orphan Drug Exclusion statute is applied in applicable hospitals (i.e., CAH, SCH, RRC, and CAN type covered entities). He did feel it was a reasonable way to administer the statute (allow use for non-Orphan indications); however, without rule making authority HHS cannot create the rule. This is a result of a lawsuit from drug manufacturers, and we will likely see the 340B pricing be removed from affected covered entities in the near future.

340B Compliance Tip of the Month: Take a look at your crediting process for drugs to ensure that credits cross to your hospital accumulator. Some systems credit in a billing system and not the EMR where the data is pulled. Related to this is how patient own meds, white bagged meds (when patients need to use a specialty wholesaler for high cost drugs and they are shipped to you or the patient), or Patient Assistance Programs (PAP) are treated in the system as far as accumulation.

Well, it has been a lot of busy weeks since the Winter 340B Coalition Conference. Of course this is evidenced by the fact I have not wrote up the highlights from the last day of the conference. My goal is to do that and share some highlights from a recent 340B University I had the opportunity to provide a presentation for and to attend.

A quick update on us, I am excited to announce that Rich Iverson is full-time with Turnkey Pharmacy Solutions, our 340B services and consulting company. This is great because I have been busier than I want to be. In the last two months we have provided onsite HRSA audit support for a DSH hospital, an external 340B audit for two DSH hospital, external 340B audits for eight CAH hospitals, and presented at 340B University on contract pharmacy, mixed-use setting, covered entity perspective of HRSA and Manufacturer audits. Plus, coordinating efforts for the rest of our work that needed to be completed. Of course, starting with this article I am writing on the plane ride home from an audit. (By the way, unless you receive upgrades for being a frequent flyer, go for the plane seat rows for the second emergency aisle. They are longer and the seat in front of you can’t recline, while your seat can).

I reviewed my notes from the last day of the coalition conference. I must say, it is easier to write the article right after you hear the presentations. The key items I felt were important were the great discussion on legislative changes to congress, 340Bair, and a recap of legislative action for 2013.

For congress changes, I will not go through the details, but there are a significant amount of people retiring or leaving office for other reasons that could change some of the key players for and against the 340B program. The take home message is to a) come to the DC conference in July and interact with your senate and house representatives from your state and b) to prepare a message for why the 340B program is important for your hospital and clinic and what it does for vulnerable patients with need in your community. Of course, this means you need to have some things you are doing. As I travel around the country and work with various covered entities (typically providing 340B independent audits) I get to hear a lot of neat things people are doing to take care of their patients with 340B savings. The hard one to measure and determine impact are sites that would be in the red financially without 340B savings. I personally know for a fact of a couple of small facilities that would have closed down without 340B savings. When I think of access for patients in that community, especially elderly and those with disabilities, this truly becomes an access and service issue.

340BAir and other Con or Pro 340B groups (like 340BFacts), are all part of the reality of where the 340B program is today. I don’t think we should judge either group to harshly (depending on what side of the aisle you sit). I personally feel the reality is somewhere in the middle. The 340B program does in fact provide critical support for many patients in need and in many cases, meets a gap that is difficult to cover in the absence of the 340B savings for the covered entity. At the same time, compliance of the program is not where it needs to be. HRSA’s efforts have been huge at improving compliance, and I am grateful for the additional funding going to HRSA to help out with compliance oversight in the program (both covered entity and manufacturer). Note to covered entities: self-audit your program regularly and be an active participant in oversight of your vendors and the output of your vendor solutions. Note to manufacturers: We need to do a better job of protecting you from 340B diversion and managed care duplicate discounts (not Medicaid, well, we need to protect from Medicaid too, but I am talking about rebates to insurers other than Medicaid).

340B University (March) – Commander Pedley was there, and no she did not give us any hints on the Mega Regulation (for the record, Chris Hatwig tried his best and she was a rock at not providing anything). She did confirm that the current plan is still to release the draft for comment in June. I believe we will have 60-days to respond, so be ready as this happens over July and the busy vacation summer season. One item that was new to me at the University session was that there is an additional option for OPA that is coming regarding compliance. There will likely be user fines for non-compliance. No details on how much or how this works, but we can add that to the options of terminating the covered entity, terminating the contract pharmacy(ies), and paying back savings. Although it is possible to have criminal penalties too, it is still highly unlikely and was not mentioned.

Whew, I really need to break these up into more articles. I hope to add a compliance tip every month, so stay tuned; and let me know if you have a good one to share.

Two Side notes:

1) I am presenting at 340B University at ASHP Summer Meeting and a CE on 340B on Monday. If you are at either event, let me know if you have any specific questions and I will be more than happy to help.

2)W e have a booth at the DC 340B Coalition Conference, so if you are going, please stop by and say hello.

340B Coalition Conference Highlights Day 1

340B ConferenceBefore we get to the highlights, I need to address one thing we always strongly recommend to covered entities we partner with.

For key leadership staff, you should attend a 340B Coalition meeting OR 340B University meeting annually.

I even recommend one of each if you can swing it. The two meetings cover 340B from slightly different angles (similar, but different . . . I may need to cover this in a separate article). Currently listening to Bill von Oehsen and he just mentioned the need for attending one of these educational sessions annually. The reason I bring this up is that I do not want anyone to substitute formal education by using our Blog or reading the Apexus or SNHPA website for their sole means of 340B education. Okay, on to the highlights!

Legislative: The biggest update is the increase in funding for OPA (well, technically HRSA for 340B, but that means OPA). This brings OPA’s budget to $10.2 million, which is an increase of $5.76 million. Commander Pedley has to present to congress in March on how this money will be used for compliance and integrity. We did hear that some of this will be used for manufacturer auditing as well.

What is on the Horizon for 2014 (We know about most of these, but it is a fun list):
-Orphan Law suit (regarding the recent clarification that stated if the Orphan Drug was used for a non-Orphan indication, then it could be purchased at 340B).
-AMP Regulation due out in May: Defines AMP and may impact Medicaid Rebates.
-1st Manufacturer HRSA audit.
-And we can’t forget, 340B Regulations to be proposed this summer.

The “Real” Numbers on Contract Pharmacy:
-Percentage of Covered Entities with contract pharmacy = 18%
-Covered Entities using Contract Pharmacy that have less than 5 contract pharmacies = 75%
From my personal experience, we also have many contract pharmacies listed that are not being used. They were either set-up and not started OR a large retail chain added many stores and then looks to see which stores have volume (and of course have not removed the extraneous stores yet).

Contract Pharmacy Diversion: I did hear for the first time that besides a covered entity being removed from the program AND potential payback of all 340B savings, a contract pharmacy diversion could result in the contract pharmacy being removed for the covered entity, but the covered entity could stay enrolled. That was new to me and makes sense.

Medicaid (Correction): During some FAQs, someone kept pushing for a response as to if Medicaid Rebates were Fee-for-service (State) Medicaid only or Managed Care Medicaid too. Initially the response was it depends (which I feel is the right answer). They kept pushing and eventually got a Yes, State Medicaid only. I want to clarify, this is technically correct. However, in some states, State Medicaid picks up the info from Managed Care Medicaid and seeks a rebate. The reason the answer is correct is that it is State Medicaid only that can seek the rebate (that too could change of course); however, they are collecting Managed Care Medicaid claims for rebates as well. Take home message: You need to ask (yes, that means call… on the phone) each Managed Care Medicaid and State Medicaid what they are doing regarding rebates, and even if they say no initially (that is regarding the Managed Care portion), make sure you are notified if they change their practice.

Apexus: Big Chris (If you haven’t met Chris Hatwig from Apexus, he’s like 8’6″ or something, and I usually only make jokes with him if I don’t have to see him for months), shared a lot of tools on the Apexus website. A) if you are a CE and not registered with Apexus, then register! It is one of those no brainers (free and provides a lot of benefit) in life that rarely exist. B) The one item I want GPO Prohibition sites to go look for is the “Minimize WAC Exposure Tool” that provides 10 things you can do to minimize your WAC impact. In my recent role as a DSH pharmacy director, the WAC impact was about $70K/month and in May it was $100K (we turned on triple split with WAC on in April 2013 to meet the first deadline).

Okay, I don’t want to get too long. We’ll cover day 2 next (still going right now as I write this, good discussion on self-reporting). The picture above is Rich B, Rich I, and me at our Turnkey Pharmacy Solutions booth. Thank you to everyone who stopped by, we have had an awesome time meeting people from all over the country. There are a lot of people trying to do the right thing, and if we can help you with compliance or just to answer some quick questions, we are here for you. -Aloha, and I hope I see many of you at a 340B University or the July 340B Coalition Conference in Washington DC.