We’re a 340B hospital…

1. We’re a 340B hospital… Now what?

2. 32nd Magnet Hospital in the United States 260 bed acute care facility 5 county service area Catawba Valley Medical Group – 8 family practice locations Comprehensive Pain Management Center Ryan White HIV/AIDS clinic Center for Women’s Specialties (GYN clinic) Health First Center Outpatient Infusion Center Outpatient Imaging Center Neonatal Transport Team for Level III Nursery

3. Stats at a glance FY 2007 Surgeries: 12,222 ED Visits: 47,630 Inpatient discharges*: 10,021 Inpatient days*: 49,700 *excluding normal newborns

4. Why do we qualify?Section 340-B of the 1992 Public Health Service Act required manufacturers to provide front-end discounts to “covered entities” on OUTPATIENT drugs as a way to offset new increased pricing related to Medicaid reform.

5. Who manages this program? Organizations involved: *HRSA (Health Resources & Services Administration) *OPA (Office of Pharmacy Affairs - part of HRSA) *340B Prime Vendor Program (participation is optional)

6. What is a “covered entity”?The definition of "covered entities" includes certain hospitals (including large urban hospitals, small urban hospitals, and certain rural hospitals other than critical access hospitals) that are owned or operated by—or under contract with—state or local government and meet other criteria related to the number of Medicaid patients they serve ( DSH adjustment >11.75%).

7. The benefit to the hospital...We are able to purchase outpatient drugs at sub-ceiling pricing, making it possible to put the savings back into patient care. Outpatient settings include Outpatient Oncology, Emergency Department (up to admission time), and all clinics and off-site locations. *Significant cost savings occur with our infusion patients.

8. NDC to NDC matching: We must purchase the same NDC that we dispense when replenishing supply.No cherry picking!: If the drug was used on an outpatient, it must be purchased under 340B. This includes “underwater” drugs where the 340B price is actually higher than the GPO/contract price or a cheaper alternative company. Program requirements

9. Program requirements GPO Exclusion: GPO contracts cannot be loaded into the 340B account through your wholesaler. The only contracts allowed to be loaded into the 340B account are: • 340B • 340B Prime Vendor Program • or no contract

10. 340B costs… more? Sometimes, there will be a GPO contract for a drug, but not a 340B contract. In these cases, the 340B price may be more than the GPO contract price. These are sometimes referred to as “underwater” drugs. * The thing to remember is that while you may be paying more for some drugs, the discount on others is significant. Significant savings are still happening!

11. How to survive the NDC rule This has been a hardship for some facilities and the rule that is violated when hospitals “cherry pick” Whatever NDC you dispense, it must be purchased as the replacement stock This requires an up-to-date computer system when using split billing software! You must be willing & able to maintain the database.

12. How to survive the NDC rule If you haven’t started the program yet, make sure your NDC data is up to date before you compile your dispensation data If you’re already in the program, maintain the database to eliminate old data (Mfr Disc.)

13. Diversion (It’s not just a DEA problem!) Drugs purchased with a 340B discount cannot be used for inpatients or non-patients of the covered entity if separate inventories are being kept. Accurate records are essential if you use a combined inventory!!!

14. Resources available OPA has information on their website: http://www.hrsa.gov/opa Take advantage of their Pharmacy Support Services Center!!! http://pssc.aphanet.org/ They have tech support, compliance support, & site visits available, all in line with what OPA considers “legit” for 340B

15. Inventory options…. Combined inventory or Separate inventory?

16. We use a combined inventory… Benefits: SPACE!: We don’t have to keep separate inventories, therefore we save shelf space. 340B knowledge: Most technicians and pharmacists are unaware of what 340B is or the regulations; separate inventories would be a staff nightmare.

17. Physician-administered drugs Physician-administered drugs: - We have family practice locations so our pharmacy also purchases physician-administered drugs for these clinics - It is important to keep any of these drugs separate from your main pharmacy inventory since they are 340B eligible - I keep a separate shelf for these drugs and have it clearly labeled.

18. DSH Inpatient pricing Some pharmaceutical companies offer DSH pricing for inpatient contracts This can lead to significant savings for your hospital if the P&T committee is willing to write auto-sub policy for a particular product that offers DSH pricing

19. Software Solutions By Munira Zahabi

20. There is a choice Do Nothing Risk being audited Fines Do something Have Dual Inventories Manual Have a Technological Solution Automatic

21. Dual Inventory!!! • Do-able in small facilities • 340B providers may keep dual inventories • Pharmacy staff constantly checks patient status • Maintain adequate tracking system/s for drugs dispensed

22. Funds tied up in excess inventory Saves Shelf-Space Improper Inventory management = expired drugs Employees scramble to figure which inventory to use Dual -Inventories

23. Software Solution Audits Invoices To Ensure 340B Pricing Accuracy Ideal for facilities who see a mixed group of patients

24. Software Solution A Tool Designed to Help Pharmacies Expand Their Use of 340B Contracts A Virtual Inventory Management System Designed for Mixed Patient Populations

25. Software Solution Users utilize the 340B contract portfolio so every opportunity can be utilized Simplifies the ordering and tracking of 340B drugs

26. Software Solution Manage facility costs and inventory accurately and easily. Pharmacies can remain GPO contract compliant for non-340B products

27. Software Solutions No more Dual Inventories Multiple inventories = Revenue Lost Hospital funds are not tied up in excess inventory Physical inventory is at a minimum Replenish only what has been used Adequate tracking system for ALL drugs dispensed to ALL patients

28. Software solutions Maintains ALL records As long as the patient is in the outpatient setting, the patient qualifies for 340B drugs All usage is tracked Creates an audit trail Time Saver for employees.

29. Installation Preliminary Screening done by the software company Installation takes place Information Systems department is involved Software is setup

30. Preliminary Preparations Matching of the Charge Description Master (CDM) to National Drug Code (NDC) The Matching Provides consistent description and pricing of products and services Stores and passes-on accurate billing codes, revenue codes to 3rd party payers Reduces compliance liability Improves revenue capture.

31. How the software works The software monitors dosed dispensed to the patients All doses dispensed to a patient Virtual basket Tracks all dispenses/orders/items/quantities Frequency of checking the patient dispensation

32. How the Software works Build order on the wholesaler’s site Upload data on the 340B Software The Software Generates a recommended replenishment order The software shows the drugs that can be ordered A replenishment PO is created based on the meds used The software splits the order Inpatient Drugs Outpatient Drugs 340B Order can be edited by the user before it is submitted

33. Software Solution- How it works! Customer builds order and transmits it to 340B-Software Customer creates the PO and exports to the Wholesaler Rx Wholesaler Software Solution Software Processes Transactions and Creates Replenishment Order

34. How the Software works Summary views shows uploaded lines Exception report allows buyer to link meds to valid NDCs Invoice summary tracks and displays the amount of money saved on the 340B program Software reports track utilization and purchase histories