Transcript Compliance Webinar 100 - Slides

Compliance Round-Up
September 8, 2015
Today’s 340B Focus:
Disproportionate Hospitals, Outpatient Clinics and Child Sites
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Faculty
Ryan Meade, JD, CHC-F, CHRC
Managing Director, Aegis Compliance & Ethics Center, LLP
[email protected]
Steven Weiser, JD, LLM
Director, Aegis Compliance & Ethics Center, LLP
[email protected]
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Continuing Goals
The goals of the Compliance Round-Up Webinars:
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Teaching/knowledge transfer
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Keep you up to date on compliance rules
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Practical points
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Assist organizations to develop in-house methods of managing
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Please share your thoughts, suggestions (and criticisms)
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Compliance Round-Up:
Webinar Overview
Administrative Matters
•
Monthly on the 2nd Tuesday of the month
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No charge! (feel free to spread the word….)
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Each session will be 60-75 minutes in duration
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Each session will begin at 12:00 PM CT
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If you are unable to participate in the live discussion, each session will be
recorded and made available in MP3 format
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Today’s Guidance Topics on
HRSA Omnibus Guidance
 340B Program Eligibility and
Registration
 DSH Covered entity eligibility
 Covered Entity
Responsibilities
 Diversion
 Duplicate Discount Prohibition
 GPO Prohibition
 Individuals Eligible To Receive
 Maintenance of Auditable
340B Discounts
Records.
 Registration
 Contract Pharmacy
 Drugs eligible for purchase
Arrangements
under 340B Program
 Program Integrity
 Annual Recertification
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HRSA’s Proposed Omnibus Guidance Published in
Federal Register August 28, 2015 (the “Guidance”)
https://www.federalregister.gov/articles/2015/08/28/2015-21246/340b-drugpricing-program-omnibus-guidance
60-day comment period ends on October 27, 2015.
You may submit comments, identified by the Regulatory Information Number (RIN) 0906AB08, by any of the following methods:
•Federal eRulemaking Portal: http://www.regulations.gov. Follow instructions for submitting
comments. This is the preferred method for the submission of comments.
• Email: [email protected]. Include RIN 0906-AB08 in the subject line of the
message.
• Mail: Krista Pedley, Director, Office of Pharmacy Affairs (OPA), Health Resources and
Services Administration (HRSA), 5600 Fishers Lane, Mail Stop 08W05A, Rockville,
Maryland 20857.
All submitted comments will be available to the public in their entirety
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Disproportionate Share Hospitals (DSH)
Disproportionate share adjustment percentage.
For hospitals qualifying as a DSH, HHS will review a hospital's most recently filed
Medicare cost report to ensure the hospital meets the statutorily required
disproportionate share adjustment percentage.
A children's hospital which is not required to file a Medicare cost report may
provide, in a time frame determined by HHS, a statement from a qualified
independent auditor certifying that the auditor performed an audit on the records
of the children's hospital, that the auditor is familiar with Federal rules and
regulations relevant to its findings, and found that the hospital would meet the
criterion in section
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Child Sites of DSH Hospitals
Off-site outpatient facility eligibility
Off-site outpatient facilities and clinics will be listed on the public 340B
database, and may purchase or use 340B drugs for eligible patients, if
(1) the most recently filed Medicare cost report lists each facility or clinic
on a line that is reimbursable under Medicare
(2) Demonstrates that the services provided at the facility or clinic have
associated outpatient Medicare costs and charges.
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Child Sites – Children’s Hospitals
A Children's hospital which does not file a Medicare cost report, HHS will
list an off-site outpatient facility if the parent hospital authorizing official
submits a signed statement which certifies the requested outpatient
facility:
1. Is an integral part of the children's hospital whose patients meet the
requirements of this guidance
2. Would be correctly included on a reimbursable line with associated
Medicare outpatient costs and charges on a Medicare cost report, if
filed.
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Loss of Eligibility
A hospital covered entity and its child sites are immediately ineligible upon:
1.
Closing of the hospital
2.
Upon change of ownership or contract status which results in the hospital
failing to qualify under 340B(a)(4)(L)(i) of the PHSA.
3.
A hospital which qualifies for the 340B Program on the basis of a
disproportionate share adjustment percentage will lose eligibility
immediately 4. upon filing of a Medicare cost report for which the
disproportionate share adjustment percentage falls below the statutory
threshold.
4.
A hospital which qualifies for the 340B Program as described in section
1886(d)(5)(F)(i)(II) of the Social Security Act will lose eligibility immediately
upon filing of a Medicare cost report for which the hospital does not meet
the requirements of section 1886(d)(5)(F)(i)(II) of the Social Security Act.
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Loss of Eligibility - Continued
5. A children's hospital which does not file a Medicare cost report will lose
eligibility for the 340B Program immediately upon an annual independent
audit which results in a disproportionate share adjustment percentage less
than or equal to 11.75.
6. A registered child site will lose eligibility in the following scenarios: (a)
Immediately upon closing of the clinic or facility or when sold or transferred to
any entity.
a) Upon filing of a Medicare cost report that demonstrates that the site is not
listed as reimbursable, or the services no longer have associated outpatient
costs and charges reimbursed by Medicare.
b) For hospitals subject to the GPO prohibition, immediately upon use of a
GPO for covered outpatient drugs as specified in this guidance.
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Individuals Eligible To Receive 340B Discounts
Proposed definition of 340B include patients that meet all of the following
criteria on a prescription-by-prescription or order-by-order basis:
1.
The individual receives a health care service at a covered entity site which
is registered for the 340B Program and listed on the public 340B database
2. The individual receives a health care service from a health care provider
employed by the covered entity or who is an independent contractor of the
covered entity such that the covered entity may bill for services on behalf of
the provider.
3. An individual receives a drug that is ordered or prescribed by the covered
entity provider as a result of the service described in (2). An individual will
not be considered a patient of the covered entity if the only health care
received by the individual from the covered entity is the infusion of a drug or
the dispensing of a drug.
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Individuals Eligible To Receive 340B Discounts - Continued
Proposed definition of 340B include patients that meet all of the following
criteria on a prescription-by-prescription or order-by-order basis:
4. The individual receives a health care service that is consistent with the
covered entity's scope of grant, project, or contract
5. The individual is classified as an outpatient when the drug is ordered or
prescribed. The patient's classification status is determined by how the
services for the patient are billed to the insurer (e.g. Medicare, Medicaid,
private insurance). An individual who is self-pay, uninsured, or whose cost of
care is covered by the covered entity will be considered a patient if the
covered entity has clearly defined policies and procedures that it follows to
classify such individuals consistently
6. The individual has a relationship with the covered entity such that the
covered entity maintains access to auditable health care records which
demonstrate that the covered entity has a provider-to-patient relationship,
that the responsibility for care is with the covered entity, and that each
element of this patient definition in this section is met for each 340B drug.
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Individuals Eligible To Receive 340B Discounts
(Other issues addressed by guidance)
Replenishment. To avoid a violation of the statutory prohibition on
diversion, a covered entity that utilizes a drug replenishment model
may only order 340B drugs based on actual prior usage for eligible
patients of that covered entity as defined by this guidance.
Repayment. If a 340B drug is found to have been diverted to an
individual who is not a patient of the covered entity contrary to the
statutory prohibition on diversion, the covered entity is responsible for
offering repayment to all affected manufacturers. A covered entity is
also responsible for any repayment for 340B drugs diverted from a
child site or through its contract pharmacy arrangements.
Corrective action requirement. A covered entity should notify HHS of
its corrective actions regarding diversion
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Examples of Application of Patient
Definition in Guidance
HRSA discusses the applicability to the patient definition to the
following scenarios:
1. An individual that sees a physician in private practice for follow-up
care from a covered entity is not an eligible patient since the
private practice is not listed in the 340B database.
2. An individual is not an eligible patient when the health care is
provided by an organization that has an affiliation arrangement
with the covered entity (even if the covered entity has access to
the affiliate’s records).
3. Privileges or credentials at a covered entity are not sufficient to
demonstrate that a patient treated by the privileged provider is an
eligible patient of the covered entity.
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Examples of Application of Patient
Definition in Guidance - Continued
• The proposed guidance also emphasized that a
covered entity’s employees must independently meet
the eligible patient definition and are not automatically
eligible patients by status of their employment.
• Even covered entities with self-funded plans, which are
financially responsible for employees’ health care, and
contract with loosely affiliated health care professionals,
must have its employees independently meet the
eligible patient definition.
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Drugs Eligible For Purpose
• The Guidance proposes additional clarity regarding the
application of the definition of “covered outpatient drug,”
which defines the scope of drugs eligible for 340B
Program discounts.
• It proposes that prescription drugs that are billed to and
reimbursed by the Medicaid program under a bundled
rate with certain other services (e.g., physicians services,
outpatient hospital services, etc.), and which are provided
as part of, or as incident to and in the same setting as,
those services are not eligible for 340B Program
discounts.
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Multiple 340B Discounts and Rebates
• HHS is proposing that no covered entity may obtain 340B
pricing on a drug purchased by another covered entity at or
below the 340B ceiling price.
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Does Guidance Clarify HRSA’s June 18,
2013 FAQ?
On June 18, 2013, HRSA released the following FAQ on its
website:
Question:
“Can a hospital subject to the GPO Prohibition use a GPO for
drugs that are part of/incident to another service and payment is
not made as direct reimbursement of the drug (“bundled
drugs”)? For example, diluents for infusions, large volume
parenterals used as diluents, etc.
See: http://www.hrsa.gov/opa/faqs/
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Definition of Covered Outpatient Drugs
and the GPO Prohibition from June 18,
2013
Answer:
If the entity interprets the definition of covered outpatient drug
referenced in the 340B Statute (Social Security Act 1927 (k))
and decides that bundled drugs do not meet this definition, a
GPO may be used for drugs that are not covered outpatient
drugs. The decision the entity makes should be defensible,
consistently applied in all areas of the entity, documented in
policy/procedures, and auditable.”
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Definition of Covered Outpatient Drugs
and the GPO Prohibition
Implications of June 18, 2013 FAQ
DSHs may interpret drugs subject to a bundled payment as:
(1) not meeting the definition of a “covered outpatient drug” and thus,
may be purchased through a GPO or
(2) meeting the definition of “covered outpatient drug” and may
purchased only through a 340b drug or WAC account.
The DSH’s interpretation must be consistently applied in all areas of
the entity and document in policy/procedures, and auditable.
What is impact of Guidance on this FAQ?
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New Guidance on Prohibiting Duplicate Discounts for Medicaid
Managed Care Patients
1. Guidance focuses on the coordination of 340B Program purchases with
purchasing for Medicaid Managed Care Organizations (MCOs).
2. Covered entities are currently required to report whether they use 340B
Drugs for drugs billed to the Medicaid fee-for-service program.
3. Covered entities may similarly choose whether to use 340B Drugs for
drugs billed to Medicaid MCOs, if they have mechanisms in place to
identify Medicaid MCO patients, and information detailing any
distinction in the treatment of Medicaid managed care and fee-forservice patients is made available to HHS.
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New Guidance on Prohibiting Duplicate Discounts for
Medicaid Managed Care Patients - Continued
4. Guidance points out the increased risk for duplicate discounts with
respect to covered entities’ contract pharmacies, noting that that when a
contract pharmacy is registered on the 340B Program public database, it
will be presumed that it will not dispense 340B Drugs to Medicaid fee-forservice or MCO patients.
5. If the covered entity wishes to purchase and dispense 340B Drugs to
Medicaid fee-for-service or MCO patients through a contract pharmacy
arrangement, it must provide HHS a written agreement with its contract
pharmacy and State Medicaid agency or MCO that describes a system
to prevent duplicate discounts.
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Covered Entity Responsibilities
Diversion

With respect to drug inventory/replenishment models, HRSA
definitively states that an improper accumulation, even prior to the
placement of an order, equals diversion and constitutes a violation.
Prohibition of Duplicate Discounts

Covered Entities can select whether to use 340B drugs for its
Medicaid Managed Care Organization (“MCO”) patients and can
vary the selection at different covered entity sites and MCOs as
long as such distinction is made available to HHS. In addition, a
covered entity should have mechanisms in place to identify MCO
patients.
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Covered Entity Responsibilities

The proposed guidance reserves the right to make the covered entity MCO carvein or carve-out information publicly available through an Exclusion File or other
mechanism.

With respect to contract pharmacy arrangements, the default position in the
proposed guidance is that contract pharmacies will not dispense 340B drugs for
Medicaid Fee-for-Service (“FFS”) or MCO patients. The summary to the proposed
guidance states that if a covered entity wishes for its contract pharmacy to
dispense 340B drugs to Medicaid FFS or MCO patients, the covered entity will
provide HHS a written agreement with its contract pharmacy and State Medicaid
agency or MCO that describes a system to prevent duplicate discounts.
Maintenance of Auditable Records HRSA is proposing a record retention
standard of 5 years for manufacturers and covered entities.
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GPO Prohibition
• HHS is proposing that an off-site outpatient facility which is not
participating or listed on the public 340B database is able to access
outpatient drugs through a GPO as long as that facility has a
purchasing account separate from that of any 340B enrolled site,
and that facility ensures GPO-purchased drugs are never provided
to outpatients of the hospital or other care sites enrolled in the
program.
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Exception to GPO Prohibition
• HHS is proposing to recognize an exception to the GPO prohibition for
hospitals that cannot access a drug at the 340B price or at wholesale
acquisition cost to prevent disruptions in patient care.
• The guidance states that HHS will consider a hospital in compliance
with the statute if a hospital-covered entity that resorts to using a GPO
for covered outpatient drugs in this circumstance documents the facts
surrounding the purchase and provides HHS with the name of the
drug in question, the manufacturer and a brief description of the
attempts to purchase the drug at the 340B price and the wholesale
acquisition cost price prior to purchasing the drug through a GPO.
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Proposed Compliance Guidelines
• Notice and hearing for noncompliance HHS is proposing a
notice and hearing process under which a covered entity has
the opportunity to respond to adverse audit findings and other
instances of noncompliance or to respond to the proposed
loss of 340B Program eligibility.
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Proposed Compliance Guidelines
• Audits of Covered Entities HHS proposes in the Guidance to establish a
“notice and hearing process” under which a covered entity has the
opportunity to respond to adverse HHS audit findings or to the loss of 340B
Program eligibility. It should be noted that this process would be entirely
conducted based on written submissions. Once a notice is sent to the
covered entity, the covered entity will have 30 days to respond. The
Guidance specifies guidelines for the submission of corrective action plans
if there are findings of non-compliance.
• The Guidance also sets forth the guidelines for manufacturer audits of
340B Program covered entities, including procedures for submitting a work
plan for HHS approval prior to conducting an audit and examples of what
would be considered “reasonable cause” for a manufacturer audit. HHS
states that a covered entity’s refusal to respond to manufacturer questions
may be construed as “reasonable cause” for a manufacturer audit.
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Termination
Proposed conditions for re-enrollment in the 340B Program after a DSH is
removed for violation of an eligibility requirement, including the
requirement not to use a group purchasing organization:
• A covered entity removed from the program would be able to re-enroll
during the next regular enrollment period after it had satisfactorily
demonstrated to HHS that it will comply with all statutory requirements
moving forward and is in the process of offering repayment to affected
manufacturers, if necessary.
• HHS is specifically seeking comments on what type of information a
covered entity would submit to HHS to demonstrate compliance to reenroll in the 340B Program
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Pharmacy Requirements
• With respect to contract pharmacy arrangements, the default position in
the proposed guidance is that contract pharmacies will not dispense
340B drugs for Medicaid Fee-for-Service (“FFS”) or MCO patients.
• The summary to the proposed guidance states that if a covered entity
wishes for its contract pharmacy to dispense 340B drugs to Medicaid
FFS or MCO patients, the covered entity will provide HHS a written
agreement with its contract pharmacy and State Medicaid agency or
MCO that describes a system to prevent duplicate discounts
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Pharmacy
•
HHS is proposing compliance mechanisms for covered entities that
contract with pharmacies to dispense 340B drugs.
• An annual review and audit of contract pharmacy operations will
provide covered entities a regular opportunity to review and reconcile
pertinent 340B patient eligibility information at the contract pharmacy
and help prevent diversion, according to the guidance.
•
As an additional compliance mechanism, covered entities should
compare their 340B prescribing records with the contract pharmacy's
340B dispensing records at least quarterly.
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Increased Oversight of Contract Pharmacies
• The Guidance provides that only covered entities may register
or make changes to a contract pharmacy listing on the 340B
Program database. In addition, it provides that contract
pharmacies may be removed from the database and from
participation in the program by HHS if HHS determines the
pharmacy is not complying with 340B Program requirements.
• HHS also emphasizes its expectation that covered entities will
conduct quarterly reviews and annual independent audits of
each contract pharmacy location it has registered, and will
maintain the records of such audits.
• The Guidance states that covered entities should report to HHS
“any 340B Program violation” detected through such quarterly
reviews or annual audits.
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Annual Recertification
• A covered entity removed for failure to recertify would be
able to re-enroll for the 340B Program during the next
regular enrollment period after the covered entity has
demonstrated to HHS its ability to comply with all 340B
Program requirements.
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Follow-Up
Questions?
[email protected]
[email protected]
Next Lecture:
Tuesday, October 13 2015
Webinar Archive
http://aegis-compliance.com/compliance-roundup-webinars
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