Optimizing The 340B Program

1. Optimizing The 340B Program Promoting Integrity, Access, & Value To deliver clinically and cost-effective pharmacy services This educational product created by: Health Resources and Services Administration | Office of Pharmacy Affairs 340B Peer-to-Peer Program

2. Purpose of Activity 340B Program Integrity The Medicaid Exclusion File and Avoiding Duplicate Discounts The purpose of this module is to explain the purpose of the Medicaid Exclusion File and provide strategies on how states and covered entities can avoid duplicate discounts.

3. Topic Guide • Describe the role of the Medicaid Exclusion File in preventing duplicate discounts • Describe situations in which a duplicate discount might occur in error • Identify the data entities provide for insertion in the Medicaid Exclusion File • Explore how to use the Medicaid Exclusion File

4. 340B Background • Requires mechanism t ensure that entities comply with duplicate discount prohibition • Established in 1992 statute (section 340B of the Public Health Service Act) • Includes 2 major prohibitions: • Diversion to non-340B patients • Duplicate discounting • Requires manufacturers to sell “covered outpatient drugs” to certain “covered entities (CEs)” at greatly reduced price

5. Duplicate Discount on 340B Drugs • When does a duplicate discount occur? When the same drug is: Purchased with an up-front 340B discount Credited with a back-end transaction Medicaid rebate And

6. Examples of Duplicate Discounts

7. Examples of Duplicate Discounts (Cont’d) 1. CMS. Letter re: medication prescription drug rebates. April 22, 2010. Available at: www.ncsl.org/documents/health/42210PPACADrug_Rebate_​SMD.pdf. Accessed November 22, 2011.

8. 340B DRUG-PRICING PROGRAM Medicaid Exclusion File Legislation Congress Department of Health and Human Services Must Create • Mechanism

9. Purchasing Drugs for Medicaid Patients 340B entities may: OR purchase drugs at 340B prices purchase drugs at non-340B prices (“off contract”) using a separate account

10. The Medicaid Exclusion File Health Resources and Services Administration Office of Pharmacy Affairs Maintains Medicaid Exclusion File

11. Criteria for Listing in Medicaid Exclusion File

12. Billing Medicaid 340B entities must decide whether or notto use 340B drugs for Medicaid patients YES, use 340B drugs for Medicaid NO, don’t use 340B drugs for Medicaid 340B entities must decide how to bill Medicaid in a way that is consistent with their state’s Medicaid program Traditional Fee-for-Service Medicaid Managed Care Medicaid All-inclusive Rate

13. Medicaid Exclusion File & 340B Contract Pharmacies 340B Entity Drugs Contract Pharmacy Ship to Bill to Medicaid prescriptions filled using the contract pharmacy’s own non-340B inventory Entity’s 340B-purchased drugs are not used to fill Medicaid prescriptions No need to list pharmacy’s Medicaid number in OPA database

14. 340B EnrollmentForm Where should CEs indicate the required Medicaid billing information? A 340B covered entity is required to indicate on the 340B Enrollment Form if it intends to bill Medicaid for Drugs purchased at 340B prices. http://opanet.hrsa.gov/opa/CERegister.aspx

15. Covered Entity Search

16. CE Decision to Not Use 340B DrugsCarve-Out When a CE enrolls, its data are entered in the CE database. CE Data If the entity is NOT using 340B-purchased drugs for their Medicaid fee-for-service patients, the form will indicate that the entity will not bill Medicaid for drugs purchased at 340B prices.

17. The Medicaid Exclusion File Reasons why most 340B entities exclude Medicaid prescriptions from their contract pharmacy: • Most contract pharmacies and Medicaid agencies do not “establish an arrangement to prevent duplicate discounting.” • Medicaid reimbursement formulas based on actual 340B cost may not provide margin sufficient to cover costs. • Most clinics and pharmacies are aware that the Medicaid anti-kickback statute is very broad and are wary of including Medicaid prescriptions in their contracts.

18. CE Decision to Use 340B DrugsCarve-In When a CE enrolls, its data are entered in the CE database. CE Data If the entity is using 340B-purchased drugs for their Medicaid fee-for-service patients, the form must display the Medicaid number and state.

19. When a CE Has More Than One NPI When a CE enrolls, its data are entered in the CE database. CE Data The OPA database is capable of handling entities that have more than 1 NPI and wish to bill different state Medicaid agencies in a different manner (e.g., carve-out in 1 state, and use 340B for another). On the registration form, the entity must specify that the NPI is listed in association with particular states.

20. Alternative Agreement With State OR • The CE must work with its state Medicaid agency and OPA to establish sufficient safeguards.

21. Medication Exclusion File Data Extract

22. Medicaid Exclusion File Data Go to http://opanet.hrsa.gov/opa/MedicaidExclusionFiles.aspx or the OPA’s home page and click on “Medicaid Exclusion Files”

23. CE Responsibility for Avoiding Duplicate Discounts

24. Avoiding Duplicate Discounts What can CEs and states do to avoid Duplicate discounts on 340B drugs? States CEs • Become knowledgeable about duplicate discount prohibition by using HRSA and PVP resources • Have a knowledgeable 340B “go-to” person in the state Medicaid office who is available to communicate with 340B entities • Review the Medicaid Exclusion File • If discrepancies are noted, contact the CE for more information • Provide clear direction to CEs about your Medicaid 340B reimbursement policy and their responsibilities • Let OPA know if there are concerns or areas for improvement • Become knowledgeable about duplicate discount prohibition by using HRSA and Prime Vendor Program (PVP) resources • Evaluate your Medicaid billing practices: are you using 340B medications in ANY Medicaid prescriptions? • Review your entry in the OPA database: does it correctly match your practices?

25. Office of Inspector General (OIG) ReportJune 2011 OIG. State Medicaid policies and oversight activities related to 340B-purchased drugs. June 2011. OEI 05-09-00321. Available at: http://oig.hhs.gov/oei/reports/oei-05-09-00321.pdf. Accessed November 22, 2011.

26. 1-888-340-2787 ApexusAnswers@340bpvp.com 340B Resource Information Health Resources and Services Administration http://www.hrsa.gov/opa/ http://www.hrsa.gov/publichealth/clinical/patientsafety/index.html 340B Prime Vendor Program Managed by Apexus https://www.340bpvp.com/

27. Thank you for viewing this 340B tutorial developed by : Health Resources and Services Administration Office of Pharmacy Affairs 340B Peer-to-Peer Program You can view additional 340B educational products and tools specifically developed to assist 340B-participating entities create and maintain processes to ensure 340B program integrity at: www.hrsa.gov/opa/peertopeer/