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Disclaimer. This presentation contains my personal views on the subject and is not to be construed or relied on as legal advice. Safety Net Hospitals for Pharmaceutical Access Bill von Oehsen202-552-5850 william.vonoehsen@safetynetrx.org .
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1. Investigations and Recoveries for Overcharges, Diversion, and Other 340B-Related Violations by
Bill von Oehsen
President and General Counsel
Safety Net Hospitals for Pharmaceutical Access
12th Annual 340B Coalition Conference
July 16, 2008
Washington, DC
2. Disclaimer This presentation contains my personal views on the subject and is not to be construed or relied on as legal advice
3. Overview Three basic compliance areas related to 340B program:
Prohibition against manufacturers overcharging covered entities
Covered entity compliance with anti-diversion requirements
Covered entity and state compliance with duplicate discount/Medicaid billing restrictions
4. Overcharging According to an October 2005 OIG report, one out of seven purchases through the 340B program involved overcharging covered entities
Enforcement actions against manufacturers for overcharging have been virtually non-existent except in instances when 340B recoveries are included in federal and state efforts to recoup Medicaid overpayments for best price violations
Although federal and state authorities should continue to include 340B in their Medicaid best price investigations and enforcement actions, other measures are necessary to remedy or prevent 340B overcharging
5. Overcharging (contd) Measures recommended by OIG and others:
Federal monitoring and verification of 340B pricing
Ceiling price transparency
Increased frequency and regularity of federal audits
Guidance on how covered entities can recoup overpayments to manufacturers
More meaningful penalties against manufacturers; current enforcement mechanism exclusion from Medicaid coverage is not practical
Although product shortages is a legitimate reason for rationing 340B drugs, it is not a legitimate reason for charging above ceiling prices
6. Enforcement: Litigation Update
7. Enforcement: Litigation Update (contd)
8. Diversion Aliquippa Community Hospital post-mortem Good News
Criminal action sent message to covered entities PDMA is a powerful deterrent
DSH community reported ACH to HRSA shows covered entities are self-policing
Dispute resolution process worked Bad News
Enforcement action took too long
Government should have initiated return of discounts not leave to manufacturers
Too easy to enroll ineligible facility need verification of database information
No manufacturer audits
No HRSA authority to impose financial penalties
9. Duplicate Discounts Covered entities beware! Increased audits and recoupments by state Medicaid agencies for overbilling 340B drugs
Entities should do self-audits and, if discover problems, make voluntary disclosure to HRSA and initiate corrective action plan
Make sure Medicaid billing information reflected in OPA database is accurate actionable if it is not?
340B providers need better guidance on how to comply with duplicate discount mechanism
States need access to 340B price list to evaluate whether they are being billed at actual acquisition cost