340 B Program and a Real World Case Study

1. 340 B Program and a Real World Case Study Louisiana Oncology Society November 29,2010 Lane Hooton ,Chief Operating Officer Cancer Centers of Southwest Oklahoma

2. Objectives • Define the 340B Program • Define the Prime Vendor Program(PVP) • What organizations can access 340B/PVP? • What are the key requirements for the above? • How does 340B/PVP impact a business?

3. Background • 1992 -Section 602 of Public Law 102-585, the “Veteran’s Healthcare Act” enacted Section 340B of the PHS Act • Manufacturers sign agreement with Secretary of Health and Human Services to cap prices • Section 340B is commonly referred to as the 340B Program, Section 602, or PHS Act

4. Program Administration • Office of Pharmacy Affairs (OPA) http://pssc.aphanet.org • Pharmacy Services support Center (PSSC) http://hrsa.gov/opa • 340 B Prime Vendor Program (PVP) www.340Bpvp.com

5. Prime Vendor Program(PVP) • 340b PVP provides additional savings to Disproportionate Share Hospitals • Mission is to improve access to the program • Participation is free for all eligible 340B participants • Contract to mange PVP is through Apexus Inc. • 13 national, regional specialty distributors • PVP adds approximately 2% to the overall discount

6. What’s covered and why the big deal? • Outpatient prescriptions • OTC written by Rx • Clinic Administered drugs in eligible facilities • ER drugs • Drugs in other ambulatory settings (i.e. day surgery) • Not Covered- inpatient drugs, vaccines

7. And the big deal is….? • DSH savings range from 22-40% less than any GPO • Average discount in oncology and using PVP is 27% • Only price lower is VA

8. So who can access this program? • Family planning projects • Entities covered under the Ryan White Act • State operated AIDS programs • Black lung clinics • Hemophilia clinics • Native Hawaiian clinics • Urban Indian organizations • Disproportionate Share Hospitals (DSH)

9. Facility Eligibility • Hospital owned or operated by unit of state or local government • Public or private NFP contracted with government to provide healthcare to low income individuals • DSH adjusted charity rate > 11.75%

10. Patient Eligibility Requirements • 340B prohibits selling or transferring drugs to/for any patient not a patient of the covered entity • individual is a patient if entity owns or controls that person’s healthcare records • Individual must receive care from a provider either employed or under contract to the entity • Mere act of dispensing to a patient is not enough to establish the relationship

11. Patient Requirements continued.. • Must be for an outpatient service • Provider is to be on the hospital’s CMS cost report • Others- common medical record, employed physicians, common protocols, common board of directors, QA processes

12. Case Study-Cancer Centers of Southwest Oklahoma • Three hospitals in three markets • Build three new centers to expand/provide cancer care • Only one of three hospitals is DSH • Medical, Radiation Oncology, Lab in each • One Board of Directors • Private and employed doctors • New EMR for all

13. Problem/Solutions-use 340B in all sites • Two hospitals are not DSH • Definition of a patient: • Outpatient • Employed physicians • Covered entity maintains medical record • First dose at covered entity

14. So, what’s the financial impact?