340B Webinar on Compliance and Audits

340B Webinar on Compliance and Audits from Nov 28th

Last week, I listened in on a SNHPA sponsored Webinar called “340B Compliance and Audits: Lessons from 2012 and Preparing for 2013.” The webinar was hosted by Bill von Oehsen, SNHPA General Counsel and Maureen Testoni, SNHPA Assistant General Counsel.

A couple things to begin: SNHPA has just passed it 20th year of service. They helped craft the original 340B legislation and continue to be a strong advocate of the program. Currently, there are over 17,000 covered entities, and over 13,000 contract pharmacies!

Maureen Testoni led off the discussion talking about the many challenges to the program. Obviously, there are many. Congress, Pharma, independent pharmacists and oncologists claiming un-fair competition, stockpiling of 340B drugs, and are indigent patients truly benefiting from the program.

Probably the biggest news coming out of the webinar surrounds auditing by HRSA. In 2012, there were around 50 audits that were done. Only 4 final reports have been issues, and no adverse findings were disclosed. Word on the street is that there may be close to 400 audits performed in 2013. Be prepared!!

SNHPA has been in contact with several hospitals that been audited. Maureen shared some lessons learned. First, you must have policies and procedures! She also really supports self-audits and external audits (so do we, see our website Turnkey Pharmacy Solutions). Manufacturers are starting to audit as well. These seem to be mostly based on higher than usual utilization of OP drugs. Genentech is the first to audit.

SNHPA has just released several new documents as of today. They are calling them Policy Guides. Eventually, they will have 6. Right now there are 2: a general 340B guide, and a duplicate discount guide. Each policy guide will cover a compliance topic: Duplicate Discount, Registration/recertification, patient definition, diversion, GPO exclusion, and contract pharmacy, plus the general 340B policy. These can serve as starting points for your own policies and procedures.

Maureen also discussed duplicate discounts. Currently these only apply to fee for service Medicaid and not Managed Care Medicaid. Each site needs an aligned strategy whether you are carving in or carving out.

Bill began his talk by discussing what the critics are saying: Has the 340B program strayed from its purpose, should it be limited to only uninsured, do all eligible 340B sites deserve to be in the program, has HRSA been too lax in its oversight, are sites manipulating the program, are sites stretching the definition of patients, are sites altering clinical pathways ( discharging patients too soon to get them to an OP status), is the program contributing to the drug shortage issue, and are sites abusing the contract pharmacy model. That is a lot of issues!!

Bill recommended several steps for covered entities and to congress. He called the covered entity recommendations Stewardship Principles. I agree with Bill on all of these:
• Invest in 340B savings for indigent patients
• Have a meaningful hospital charity policy and extend to pharmacy
• Use contract pharmacy revenue carefully (Improve services for indigent patients)
• Don’t use for cosmetic purposes
• Don’t alter clinical pathways
• Purchases should only meet public health need (Don’t stockpile)

Bill also has a few recommendations for HRSA as well:
• Elevate OPA within HHS
• Clearer patient definition
• Set standards for private nonprofit eligibility
• Implement PPACA integrity issues
• Finalize orphan drug regulation
• Continue audits and extend to manufactures
• OIG guidance of anti-kickback laws for contract pharmacy

Bill also had several recommendations for Congress:
• Provide adequate funding for 340B program
• Promote transparency of how savings are being used. Through audits? Reports? Other?
• Study impact of Medicaid expansion in 2014
• Cap number of sites?
• Alter eligibility criteria? (If so, must be coupled with IP extension)

He also highly recommends sharing your success stories. Here is a great story:

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340B Contract Pharmacy Vendor Software

Who did we choose for our Contract Pharmacy Vendor?

We have received numerous questions about who we chose for our 340B contract pharmacy vendor. To get to the point, it was American Health Care. We looked at about ten different companies that have contract pharmacy software solutions and decided to have initial conversations or demonstrations with seven. We evaluated numerous aspects of what we felt were important in a vendor solution. We want to take you through our process to help you better understand how we came to our decision. Although we strongly recommend American Health Care to anyone, you need to evaluate your needs and determine the right decision for your situation. You may have some other factors affecting your decision (e.g., existing contracts with certain companies). Let’s break down each factor:

How will the contract pharmacy vendor address patient identification?
There are various models for how vendor software or a contract pharmacy can determine covered entity patients. The ideal process we want to see is one that is not cumbersome for the contract pharmacy, and ideally a back-end process that has almost no impact on throughput for a retail pharmacy’s operation. Many of the vendors had an accumulation model on the back-end that looks at data provided by the contract pharmacy or even better, collected at the PBM switch during adjudication. American Health Care utilizes a back-end, behind-the-scenes model that is low impact on the contract pharmacy. They also utilize a PBM switch data model, which is advantageous for the qualified entity.

What kind of client base does the contract pharmacy vendor have?
Many of the vendors we reviewed have gone through contract pharmacy implementations and have existing client bases. With an experienced vendor you can expect to see some best practices and more efficient implementation, both are great to have when beginning contract pharmacy. American Health Care has an extensive client base resulting in a turnkey 340B Solution with a streamlined implementation process.

Does the contract pharmacy vendor have existing contracts with retail pharmacies in our hospital areas?
A vendor who already has existing chain pharmacy stores and existing clients will provide quick implementation of the pharmacies already contracted. This is preferred over a vendor that must negotiate contracts with every retail pharmacy you are interested in. American Health Care already has contracts with key recognized regional and national chains, and a few others that were not in our immediate area. This has allowed for quick implementation of those stores.

What is the impact on retail pharmacy?
As mentioned in the patient identification section, you do not want to cause additional workload on the retail pharmacy. This will lead to dissatisfaction by staff and leadership, which can ultimately harm the business relationship. Look for low to no impact vendor options. Because of the switch data model and American Health Care’s 340B process, the impact on the retail pharmacy workflow is very low.

What should I be paying for 340B Services?
Although listed here in the middle, this is very important. You want to get as many of the criteria on this list as you can, but you cannot pay $10/script for it. It will carve into your savings and make it so that fewer scripts will qualify. One major cost factor We recommend running away from, if a vendor includes it, is charges for non-qualifying 340B scripts. This means that you could end up in a potentially negative value for a pharmacy and this is not the intent of the program. We chose to only work with vendors who charge for qualifying claims only. American Health Care is a charge-for-qualifying claims only vendor, and has one of the lowest costs per script in the industry. We liked both of these factors.

Should I consider vendors with an exclusivity contract requirement?
Some vendors will ask for exclusivity for you to work with them. We recommend always asking for this to be removed. There are at least two retail pharmacy chains (Walgreen’s and Rite Aid) that have created their own solutions. So an exclusivity agreement would prevent you from contracting with these chains.

Charity care opportunity if needed:
Because you may not have an in-house retail pharmacy to run your charity prescriptions through, it is valuable to work with a vendor that has charity care process opportunity available. For our large hospitals, we have our own in-house pharmacies, but our smaller hospitals do not. This will be a great feature to include in our charity care program for the small hospitals. American Health Care has several options available to expand access to affordable medications to low-income or uninsured patients.

What kind of Customer Services does the selected contract pharmacy vendor have to offer?
We find this very important. A vendor partner who provides excellent customer service will ensure that your contract pharmacies will feel supported when they have questions or concerns. From our experience, this is one of American Health Care’s strong suits.

What is the selected contract pharmacy vendor’s focus?
Some of the vendors we reviewed had a broad range of focus for their products and services. We preferred to see a company that focused or even specialized in 340B as at least one of their major core business strategies. American Health Care has established themselves as a premier vendor of 340B services with a nationwide hospital and health center client base.

What additional opportunities are available through American Health Care?
Even though we prefer to see 340B as a focus for the vendor, we also want to see related services that we could add on at later dates. With American Health Care, we really like the fact that they focused on the Population Health Management idea (related to the Ashville Project). If we are able to get the point where we can look at population health management, we could pilot a project with their model. This is key as we get into the Accountable Care Organization models and as we identify ways we can save employers money on their employed population.

The list we just presented were the criteria we looked for in contract pharmacy vendors during our research phase. If you are a covered entity, you will also need to determine what factors are most important for you. We feel good about recommending American Healthcare as a potential vendor for your contract pharmacy services and at minimum recommend including them in your evaluation. If you are interested in learning more, you can visit their site: American Health Care or you can contact Victoria at 1-800-872-8276 ext. 2824 or

If you would like assistance with your contract pharmacy implementation, you can contact us at Turnkey Pharmacy Solutions.

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340B Program and Webinar Update

340B Program Blog and Webinar Highlights

We have been busy rolling out 340B contract pharmacies and additional qualifying sites within our health-system. In addition, we have ramped up our consulting efforts and have been working with clients and creating business partnerships that we feel provide significant benefits to our clients. We’ll have more information on this in the future, but if you are interested in seeing if we can help you with your 340B program, you can find out more and contact us at Turnkey Pharmacy Solutions. On to the update: In case you missed the SNHPA 340B Webinar yesterday on “New 340B Developments,” let me fill you in on the highlights.

The webinar was moderated and partially presented by Bill von Oehsen (SNHPA’s General Counsel and previous president), and Ted Slafsky also presented. There were multiple components to the webinar: Legislative updates, 340B program . . . (I’ll call them pearls, or in some cases BOMBS!), and benefits of SNHPA.

Legislative Updates: If you live in North Carolina you will already know, but Senator Grassley’s office has sent letters out to three of North Carolina’s 340B hospitals (UNC, Duke, and Carolinas Medical Center) requesting information on their participation in the 340B program. It appears the issue of how much a 340B facility charges for drugs purchased under 340B is being questioned. This of course has led to speculation of legislation being drafted to dictate how 340B savings need to be used. My perspective – I can understand the misconception that hospitals charge too much for medication. However, government and non-profit hospitals typically shoot to charge in an average or below average range to avoid scrutinization from for-profits for under charging. What I find interesting is that if a 340B hospital were to charge much less for outpatient medications we would be hearing a different complaint. There would be allegations of Robinson Patman Act violations for creating unfair competition. It feels like someone will always be unhappy and what looks like a solution will result in even more issues. The savings from the program are rarely passed on to all outpatients, rather to patients in need, as the program intent states. The other interesting information that came out from the webinar is that there were about 50 OPA audits done this year (5 were targeted), and Bill stated he expects closer to 200 OPA audits next year. Take home message: if you aren’t ready for an audit, then get started now. The first place to start is a robust set of policy, procedure, and audit guides (we are close to rolling out a robust Turnkey product at a low cost for you do-it-yourselfers).

Ready for the bombs? There were two of these for me in the webinar.

1) That all 340B Contract Pharmacy arrangements should be done with the intent of expanding access to charity care patients and indigent patients (they seem to be the same people, but I always hear them being stated separately). My first thought was, hmmmm. The more I thought about it, the more it makes very good sense. You see, we entered into contract pharmacy as a mechanism to capture more savings that we could funnel into in house charity care programs and projects. However, I once was lost, and now am found; and I see the light (no, it is not the oncoming train of an OPA Audit . . . I hope)! So, we are going back to ensure the expanded access to charity care through contract pharmacy arrangements in fact does exist for all of our sites.

2) A three wholesaler account system for hospital based administered meds split billing. WHAT!!! I actually had this discussion in a meeting back in April with Apexus and Chris Hatwig. If Chris ever reads this, I thought you were a little off of your rocker when you mentioned it, and now I want to apologize, you are still the man! Apparently, the OPA is potentially looking at a split billing processes for 340B and to identify a more stringent way to comply with the GPO exclusion for DSH, PEDs, and CAN 340B hospitals. The idea is that you buy all drugs on WAC (without 340B or GPO pricing), then you split to either a 340B account or a GPO account for accumulated products and purchase anything else on WAC. My perspective: It sounds sort of okay until you think about the logistics of how you deal with this as an existing hospital with inventory. Say my 400 bed hospital is sitting on $1.5 million of inventory, what do I do with my inventory, credit and rebill the whole dang thing? I actually asked this question on the webinar and Bill agrees that this is a problem that would need to be addressed. He also recommended that we not do anything or act upon this topic as the OPA has not come out and made a hard stance . . . yet. So, hold for now but start thinking about it.

340B Program Blog Updates: We are entering into another heavy period of 340B information (December has ASHP Midyear Clinical Meeting; January has the Winter 340B Coalition Conference). For December’s ASHP Midyear Clinical meeting, Apexus is having an all day Sunday 340B University Workshop and it is free. I will be there and I also get to present a little bit in the 340B University, so I am excited for that. If you are there, come and say hi. Rich Bucher and I are also presenting at the Winter Coalition Conference. Rich is presenting on contract pharmacy in the Wednesday workshops and I will be speaking and be on a panel for 340B charity care expansion and use of 340B savings (as most people know, a passionate topic for me) on Friday. If you are there, definitely come pay us a visit. In any case, as usual, plan on some heavy articles coming out for both those meetings from us. We know many of you cannot make the meetings, and we are happy to share what we learn to help all of us better use the 340B program and be more compliant with expectations from the OPA and our legislatures.

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340B Support Site PSSC and Other Updates

As of today, the 340B Support Site, PSSC, is no longer active!

Last week it was announced that APhA was awarded the contract from the government to provide support for the 340B program. Oddly enough, APhA had been managing the PSSC site for the last 10 years anyway. The current contract for APhA is for 5 years, and I expect we will not see a drop off in support due to their prior involvement. You can see the APhA announcement here.

If you go to the PSSC home page today you will get a message that they are closed. Here are some important things for you to know:
– Apexus Answers is fielding all help calls for the 340B program (well, you can also call OPA, but start with Apexus Answers). Their phone number is: (888) 340-BPVP (340-2787) and you can also email at Apexus has received their one-year extension for their contract with HRSA. They are on a yearly extension deal and from my perspective, Apexus does an incredible job for the 340B program and I anticipate their continued support and partnership with OPA in the future. (see 340B University update below)
Healthcare Communities will be a focus for APhA, I recommend signing up for the 340B Community if you already have not. This is the 340B Peer to Peer network that is often mentioned. They have recordings of previous Webinars and also notify you of future webinars. When you click on the link above, go to the 340B tab on the bottom of the page.

Other Updates:
-Registration Date changes: As noted in previous articles, we are officially about to enter the new registration date process (i.e., for new covered entities and contract pharmacies, you register between October 1st through October 15th to start on January 1st (and this is repeated every quarter)).
-Contract Pharmacy OPA registration issues: For those who have been trying to register Contract Pharmacy in the last few days, you will have been able to register but not print the needed papers to have signed and mailed in. The OPA says they will honor those sign-ups and will keep you in the queue, even if you do not fax and mail the forms until after the September 30th deadline (when the new registration dates start). My hospital and a few of my sister hospitals are in this boat. I have a contract pharmacy I am signing up and would prefer to not wait until January, so I appreciate our OPA staff working with us through the computer issues. I have to say, OPA has a tough job dealing with all the 340B program covered entities and legislative pressures.
-340B University: In a recent update from Apexus, the Prime Vendor Program for 340B, they will be conducting a 340B University at the ASHP Midyear Clinical Meeting in Las Vegas in December. It will be on Saturday and it is no additional cost. You can register here. I have not had a chance to attend a 340B University, and will be attending this one. (Which means I may have to miss some of our pharmacy practice resident interviews at PPS, I suppose I should let me resident site coordinator know).

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340B Contract Pharmacy

340B Contract Pharmacy – How does it work?

Some recent experiences we have had regarding 340B contract pharmacy made me realize that we need to do a better job explaining contract pharmacy. We do cover it in the eBook, but I feel it is worth discussing some specifics related to the actual process. The impetus for this article is my recent conversation with a pharmacy leader of a retail chain of drug stores. She is very smart and could be a huge proponent for our contract pharmacy expansion as she can impact multiple contract pharmacy arrangements across my health-system.

First, contract pharmacy can be conducted through various mechanisms. We are choosing to go with a replenishment model with the help of a vendor who can help us accomplish this with little impact on the retail pharmacy (at an appropriate cost, I will be going into this in much more detail in an upcoming post when we announce who we chose for our contract pharmacy software vendor company).

The process: A prescription is written and given to a patient of a covered entity (incident to a visit to the covered entity, sorry, I have to be specific, I think Bucher is rubbing off on me). The patient takes the prescription to be filled at a 340B contract pharmacy of the covered entity. During the prescription fill, an analysis is conducted to determine if the patient is a covered entity patient with a recent visit to the covered entity, the physician is also verified to have privileges with the covered entity. If these two things are true, then the prescription is checked to see if we can do a 340B contract pharmacy process. So far, so good for most of you I hope. The interesting thing I found out (yesterday), is that the retail pharmacy understood this as a potential increase in prescription volume. Although there may be some circumstances where this is true. For us it is likely not true. To sell this to senior leadership as an increase in volume is a set up for failure. The benefit to the retail pharmacy is in a higher rate of return per prescription filled. For example, if the prescriptions in question have an average net profit of $12, then I would recommend a $15 transaction fee. This $3 above average is the selling point for why a retail pharmacy would enter into a 340B contract pharmacy arrangement. This should be evaluated after a few months to ensure that the retail pharmacy is being made whole and then some for their part of the transaction.

One example of when this is not true: For certain clinics that will partner with a retail pharmacy to provide all the clinic’s patients medications at some discount, this type of relationship would result in an increase in prescription volume and likely a lower per prescription average.

Take home message: If you are a covered entity, ensure that your potential contract pharmacies understand the process and what the benefit is to them for participating. If you are the retail pharmacy, make sure you understand the process and what your benefit is going to be. Make sure you negotiate a fair fee for your part of the transaction and negotiate a look back in 3 months to ensure that the fee you chose was appropriate. If you need additional 340B contract pharmacy help, please let us know.


340B Webinar Update (OPA and PSSC)

Summary of August 22nd and 23rd OPA Webinars on the 340B Program

We were able to attend both webinars from the OPA and PSSC Peer-to-Peer network on 8-22-12 and 8-23-12. The 22nd call was on the C-Suite perspective and was interesting. The 23rd call was very informative and our colleagues across the country asked many questions that clarified the registration date changes. Here is a summary:

The C-suite call: We heard from various C-suite officers (e.g., CEO, CFO, CNO) about their 340B programs. It was mostly high level and shared savings data and why 340B is important to them. It was good to hear that many C-Suite individuals in different 340B covered entity sites get 340B and understand its value and importance for non-profit missions. I will be honest; I took down very little notes as it was mostly informational and specific to their institutions. However, I did find two important points we should all factor into our 340B programs. 1) Make sure your C-Suite understands the value of the 340B program and how it helps your patients. I have done this at my hospital by having specific 340B meetings with my CEO, CFO, and CNO on our program and sharing specific stories about charity care patients we were able to help as a result of the program. I recommend you do the same. 2) Have a 340B compliance team. Our health-system does not have a formal team, but we definitely have an informal team (it is primarily Iverson, Bucher, and me). We should probably make this team a formal team and add additional members (e.g., other pharmacy directors whose sites are enrolled in the 340B program, legal, public relations, finance, C-suite member). Having this team will be useful for constant program compliance and quick support in the event of an audit.

The Registration dates informational call: I gleaned much more information on this call and took more notes, and even called one of our business partners after the call to make sure we are all operating under the same information (not to mention she asked a question on the call, which was excellent, nice job Victoria). The biggest clarification I wanted to obtain was around the date changes for covered entities and contract pharmacies, and what happens after September 1st to both registrations. I believe we have the answers. For both, come October 1st you need to register with the OPA between October 1st through October 15th and you will be approved to begin on January 1st. That means that October 16th to December 31st is a non-registering period. You will need to wait until January 1st through January 15th in order to begin 340B program use on April 1st. This is the new registration process. So what about before October 1st?

Covered Entity Registration: You have until September 1st to register a covered entity to start on October 1st. The OPA will not accept registration between September 2nd and September 30th, and will begin the new process as described above on October 1st.

Contract Pharmacy Registration: The current process, which is to submit contract pharmacy registrations and get in line (typically takes 2 to 6 weeks) will be in effect until September 30th. On October 1st, the process described above will begin. So, unlike covered entity registration, you can continue to submit contract pharmacy requests up until September 30th and have the contract pharmacies signed up in the old timeline process. The call did state that you can register the covered entity and the contract pharmacy(ies) at the same time; however, the covered entity will be verified first (makes sense). This will help prevent a 3 month delay in contract pharmacy. However it may take that much time to get your contract pharmacy contracts in place.

Miscellaneous: Adding child sites also falls into these dates. Stopping 340B use for any reason can be done through the change form, which can be done at anytime. Any changes needing to be made, through the change form, can be done at anytime (with the exception of the changes listed above for the quarterly registration process). When you sign up a contract pharmacy, you must already have an executed contract with the contract pharmacy (contracts between the vendor and the contract pharmacy and the vendor and the covered entity is not enough, you still need to have a contract directly between the covered entity and the contract pharmacy). Please make note of the fact that the contract must already be signed and executed. We were also reminded that as soon as you know you no longer qualify for the 340B program, you must notify the OPA and cease use of 340B program pricing.

Audit update: 51 covered entities audited this year. Manufacturers also conducting audits, no numbers given.

Whew, it was a good webinar. I also recommend joining the Peer-to-Peer network for 340B through the PSSC. Here is a link: Peer-to-Peer Network website.

If you also attended any of the webinars and felt other information was pertinent and should be shared, please add comments below. Thank you, -Rob

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340B Registration Dates and Changes

Starting on October 1st we have new 340B registration rules from the OPA

New rules regarding registration for covered entities 340B entities, OP facilities, and contract pharmacies have been changed. This change begins with the October 1st submission. In the past, covered entities were able to submit 30 before the quarterly due date.

Federal Register /Vol. 77, No. 142 /Tuesday, July 24, 2012 /Notices 43343 correspondence issued by HRSA on the subject.

(A) Registration Period for New Covered Entities and for the Addition of Outpatient Facilities

The registration period for 340B Program registration of new covered entities and the addition of outpatient facilities shall be limited to the following:

  • January 1–January 15 for an effective start date of April 1;
  • April 1–April 15 for an effective start date of July 1;
  • July 1–July 15 for an effective start date of October 1;
  • October 1–October 15 for an effective start date of January 1.

In situations where the 15th falls on a Saturday, Sunday, or Federal holiday, the deadline will be the next business day. Covered entities will not be able to submit registrations outside of these date parameters listed above except when the Secretary has declared a Public Health Emergency. In addition to the complete on-line registration, any required supporting documentation must be submitted on the same day as on-line registration is completed. Incomplete packages will not be considered. For more information on what constitutes a complete package, visit the Office of Pharmacy Affairs (OPA) Web site at

(B) Registration Period for Contract Pharmacies

The registration period for 340B Program registration of contract pharmacies shall be limited to the following:

  • January 1–January 15 for an effective start date of April 1;
  • April 1– April 15 for an effective start date of July 1;
  • July 1–July 15 for an effective start date of October 1;
  • October 1–October 15 for an effective start date of January 1.

In situations where the 15th falls on a Saturday, Sunday, or Federal holiday, the deadline will be the next business day. The contract pharmacy registration process is not complete unless the registration form has been completed in its entirety and the original, signed copy is received by OPA. Signed contract pharmacy registration forms are due to OPA within 15 days from the time online registration was completed. Incomplete packages will not be considered. For more information on what constitutes a complete package, visit the OPA Web site at

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Inpatient discounts were in some PPACA (Obamacare) drafts, so what happened to them?

Disclosure: We choose not to affiliate with either republican or democrat views regarding 340B. We have seen both opposition and support from both parties. In this article we are attempting to share what we have found.

Background: The 340B drug discount program requires pharmaceutical manufacturers participating in the Medicaid program to agree to provide front-end discounts on covered outpatient drugs that are purchased by so called “covered entities”, as defined in Section 340B of the Public Health Service Act (42 U.S.C. §256b). Covered entities include disproportionate share hospitals (DSHs), children’s hospitals and cancer hospitals exempt from the Medicare prospective payment system, sole community hospitals, rural referral centers, and critical access hospitals (CAHs). Support for expanding these front-end discounts to inpatients of covered entities has been widely supported by groups such as the American Hospital Association, National Rural Health Association, National Association for Children’s Hospitals, and National Association of Public Hospitals and Health Systems.

What Happened: A provision intended to expand these front-end discounts to inpatients was removed from the final health reform legislation (PPACA). Some have characterized emails recently uncovered as part of an investigation by the House Energy and Commerce Committee as reflecting the White House’s opposition to expanding 340B front-end discounts, and PhRMA’s influence in Washington, despite lobbying efforts by entities such as the American Hospital Association and others. Such an interpretation would seemingly not only make the expansion of 340B front-end discounts to inpatients in the near future seem unlikely, but also call into question whether the favorable interpretation of the “orphan” drug exclusion will be able to be retained.

To see copies of the House Energy and Commerce Committee memorandums, click on the following links: memorandum 1 and memorandum 2.


340B Program and PPACA (Obamacare)

What does the PPACA (Obamacare) have in it that pertains to the 340B Program

340BThe Patient Protection and Affordable Care Act (PPACA), affectionately known as Obamacare, does have some implications for the 340B program. Now that the Supreme Court has officially NOT overturned part or all of the Act, I thought it would be a good time to review the parts of the Act that pertain to the 340B program.

Expansion of covered entities: The most critical change to the 340B program is the expansion of covered entities. The PPACA added critical access hospitals (CAH), rural referral centers (RRC), sole community centers (SCC), and free standing cancer hospitals. For RRC and SCC you can look on the OPA DSH hospital list to see which hospitals fall into these categories. If they do, they get to qualify with a lower DSH percentage. The definitions for such hospitals are defined by HRSA. Click here to see the DSH hospital list. It also reaffirmed children’s hospitals eligibility (which was already added in a 2005 law that took a few years to get going).

Additional program integrity measures: With the additional scrutiny around the 340B program, the PPACA also adds some 340B program integrity items.

  • Requires the Health and Human Services (HHS) to provide guidance on billing Medicaid when participating in the 340B drug pricing program.
  • Requires all covered entities update their information on the OPA website annually.
  • Provides for covered entities to see the actual 340B ceiling prices.
  • Creates a system to ensure accurate manufacturer pricing.
  • Creates penalties for manufacturers and sanctions for covered entities when program violations are identified.
  • Includes a mandatory dispute resolution process.
  • Requires manufacturers to refund for overcharges.

As I review the changes to the 340B program from the PPACA, if the justices overturned it entirely, we would have lost the critical access hospitals. I think this group of hospitals can use the 340B drug discounts the most. Many of our critical access hospitals are operating in the red. Any additional financial help might be the way to get the self sufficient. As my partners and I have discussed this over numerous meetings, this is an area we are going to focus on. We have 7 critical access facilities in our system and we have already begun discussing the 340B program with the hospital administrators at a couple of the sites. The program has so many operational oversight requirements, that rolling out the program safely in a small facility makes it a challenge. We feel we can provide a low operational impact turnkey solution to our critical access facilities through our support. We’ll keep you posted. If you are a critical access facility and want to get on a mailing list for specific updates and potential direct help from us, please send us an email through the contact tab at the top of the site.

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The OPA Releases a 2-Page document on 340B Covered Entity Audit Policy

This will be short, because you should just read the policy directly from the OPA’s website. As discussed from my notes of the ASHP summer meeting in Baltimore I just attended, the OPA has released some information on their policy for 340B covered entity audits. It isn’t detailed, but it does verify some of the information we have already shared. Here is the link to the policy release.

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