Presentation on theme: "Program Integrity through 340B Compliance"— Presentation transcript:
1Program Integrity through 340B Compliance Hosted By:The HRSA Program Integrity Initiative WorkgroupAugust 8, 2012
2Today’s Presenters Pat O’Rourke CFO Office Michelle Herzog Health Services Bureau/Office of Pharmacy AffairsValerie Holm Office of Federal Assistance Management/Division of Financial IntegrityDavid Fleurquin Office of Regional OperationsTammie Brown Office of Inspector General, HHS
3Agenda HRSA’s Program Integrity Initiative DHHS Office of Inspector General (OIG) National External Audit Review (NEAR) CenterIntroduction to the 340B Drug Pricing ProgramThe Compliance Supplement and 340B Compliance RequirementsQuestions and Answers
4HRSA’s Program Integrity Initiative The Administrator launched the HRSA Program Integrity Initiative (PII) in June 2010.The PII was designed to:Target risks of fraud, waste and abuseReduce risks by enhancing program integrity operationsShare the best program integrity practices, and measure the results of PII efforts.
5Prioritized PII Actions Provide training opportunities for grantees and staff to increase program integrityIncrease the number and quality of program integrity reviews and site visits conducted.Create a toolkit to facilitate collaboration and sharing of best practices.
6Office of Inspector General National External Audit Review Center What is NEAR?How does NEAR interact with DHHS sub-agencies?How does NEAR interact with auditors?
7HRSA’s Program Integrity Initiative An introduction to the 340B Drug Pricing Program to assist auditors who now have to test 340B compliance during the A-133 audit..
8Office of Pharmacy Affairs Mission: Promote access to clinically and cost effective pharmacy services888
9340B Program: Overview and Benefits Provides discounts on outpatient drugs to certain safety-net covered entitiesAverage savings of 25-50%Savings may be used to:Reduce price of pharmaceuticals for patientsExpand services offered to patientsProvide services to more patientEstimated $6 billion dollars in 340B drug purchases last yearManufacturers that participate in Medicaid must also participate in the 340B Program
10Intent of the 340B ProgramPermits eligible safety net providers “to stretch scarce Federal Resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. Rep. No (II), at 12 (1992)
11Eligible Entities Federal Grantees Hospital Types Comprehensive Hemophilia Treatment CentersFederally Qualified Health CentersUrban/ 638 Health CenterRyan White ProgramsSexually Transmitted Disease/TuberculosisTitle X Family PlanningDisproportionate Share HospitalsCritical Access HospitalsRural Referral CentersSole Community HospitalsChildren’s HospitalsFree Standing Cancer Hospitals
124 340B Enrollment Steps 3 2 1 Await Decision From OPA Determine Eligibility2Complete Appropriate Forms3Submit Forms / Documents to OPA4Await Decision From OPA
13340B EnrollmentDeadline: October 15 January 15 April 15 July 15 Start Date: January 1 April 1 July 1 October 1
14340B Enrollment Once enrolled, the newly participating entity must: Set up an account with wholesaler using 340B IDDetermine if contract pharmacy services are appropriateContact PSSC for assistance with any/ all technical issuesContact the PVP to discuss participation in their added services.
15Contract Pharmacies (2010 FRN (Vol. 75 No. ) 340B program allows entities to have multiple contract pharmacies for increased patient access to cost effective pharmaceuticalsThe Covered Entity purchases the drug, but “ship to - bill to” procedure may be usedThe Covered Entity retains legal title to all drugs purchased under 340B. The Covered Entity must pay for all 340B drugs.
16340B DatabaseEntities are not eligible for the program unless listed in the 340B databaseWholesalers will not ship discounted drugs unless it is an exact match to the 340B databaseInformation is updated dailyIncludes the Medicaid Exclusion FileOnline registration available for all applicants
17Program Prohibition: Diversion Diversion means:a drug is provided to an individual who are not a patient of that entityDrug dispensed in an area of a larger facility that is not eligible (e.g. an inpatient service, a non-covered clinic)Entities should enroll all eligible outpatient or satellite sitesRequired to follow patient definition guidelines - 61 Fed. Reg (October 24, 1996)
18Program Prohibition: Duplicate Discounts Duplicate Discount = Accessing the 340B Discount and Medicaid Rebate on same drugSafety-net providers required to inform HRSA at the time they enroll whether they plan to purchase and dispense 340B drugs for their Medicaid patients and bill Medicaid. HRSA maintains this list known as the Medicaid Exclusion File on HRSA’s public websiteHRSA provides guidance to covered entities and states“Medicaid Exclusion Tutorial” and “Medicaid Exclusion File Basics”Final Notice, Duplicate Discounts and Rebates on Drug Purchases published at 58 Fed. Reg (June 23, 1993).
19Recent OIG StudyState Medicaid Policies and Oversight Activities Related to 340B-Purchased Drugs – June 2011OIG recommendations:CMS direct States to create written 340B policiesCMS inform States about tools they can use to identify claims for 340B-purchased drugsHRSA share 340B ceiling prices with States. (HRSA will need to seek legislative authority to implement)HRSA, in conjunction with CMS, improve the accuracy of the Medicaid Exclusion File
20GAO FindingsManufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement.GAO , Sep 23, 2011GAO Recommendations:Covered Entity AuditsPatient DefinitionNondiscrimination by ManufacturersHospital eligibility
21ACA Provisions focusing on Program Integrity Manufacturer Integrity (Civil Monetary Penalties) – HRSA published Advanced Notice of Proposed Rulemaking September 2010Covered Entity IntegrityPricing Changes and Transparency (Regulations & on line access in 340B data system)Administrative Dispute Resolution - HRSA published Advanced Notice of Proposed Rulemaking September 2010Annual on-line recertification of all entities
22Program Integrity - Current Activities Determination of eligibilityAnnual RecertificationQuarterly calculations of 340B pricesMaintenance of Medicaid Exclusion FileInvestigations/resolutions of alleged drug diversion and incorrect pricing/inappropriate limits on drug accessTechnical Assistance, webinars, FAQs, guidances
23Policy Releases Penny Pricing – Nov. 2011 Non-discrimination – Nov. 2011Manufacturer audits – Nov. 2011Covered entity audits – Mar. 2012Medicaid exclusion fileHospital eligibility requirementsAll of the policy releases can be found onThe program integrity page on the OPADatabase.
24Audits – Manufacturer Conducted AuthorityReasonable causeIndependent auditorSubmit audit workplan to OPA for approval prior to conducting - December 12, (61 Fed. Reg )OPA encourages manufacturers to submit plans and we will work closely with them throughout the processOPA has received its first audit plan from a manufacturer
25Audits – HRSA Conducted HRSA to date has conducted 50 of the 51 audits.HRSA Leadership has proven commitment to this effort by providing additional auditors.All covered entity types will be considered for audit selection, including non-HRSA grantees and hospitalsProposed Focus Areas – Eligibility, Policies and Procedures, Internal Controls, Authorized 340B Discount, and Procurement/Distribution.
26A-133 plansIn addition to on-site audits, OPA has also worked closely with DFI to include 340B in the A-133 audits for all federal grantees that participate in 340B.
272012 Compliance Supplement How do auditors know what they need to review for organizations that participate in the 340B Program?The Compliance Supplement
28What is the Compliance Supplement? OMB document that is published once per year between March – June.It is a document where the federal agencies communicate instructions to the auditor for auditing the agency’s programs. This document prevents the auditor from having to research laws and regulations for each program.
29What is the Compliance Supplement? Not all programs are included in the supplement.Federal agencies are responsible for informing OMB of any changes on an annual basis.
30Where Can I Find the 340B Compliance Requirements? Since the 340B program has no CFDA number it does not have its own supplement.The requirements for auditing 340B are found in the supplement for the applicable programs under the Special Tests and Provisions Section.
31Where Can I Find the 340B Compliance Requirements?
32Applicable ProgramsFor the 2012 Compliance Supplement the 340B Compliance Requirements can be found in the following program supplements:93.224, – Consolidated Health Centers– HIV Care Formula Grants (Ryan White, Part B)– HIV Outpatient Early Intervention (Ryan White, Part C)
33Applicable ProgramsThe 2013 Compliance Supplement will most likely contain 340B Compliance Requirements in the following programs:– HIV Grants for Coordinated Services (Ryan White Act)– Family Planning - Services– HIV Emergency Relief Project Grants (Ryan White, Part A)
34Suggested Audit Procedures Determine if the grantee is participating in the 340B Program and, if so, continue with the remaining audit procedures.Review the grantee’s latest change form submitted to OPA and compare it with the organization’s actual physical location and other current information about the entity.Test a sample of drugs purchased for use under the funding program (CFDA 93.xxx) during the audit period to determine whether 340B drugs were properly identified throughout the procurement process, including (1) payment at the discounted price and (2) proper identification as a 340B drug upon receipt.
35Suggested Audit Procedures Continued Test a sample of records of 340B drugs purchased for use under the funding program and released from inventory during the audit period to determine whether required authorizations were received, to whom the drugs were dispensed, and if the grantee determined that such individuals were eligible patients before dispensing the drugs.For eligible patients who received 340B drugs, test a sample of Medicaid reimbursement requests to verify that the grantee did not claim, receive, or retain a duplicate rebate for those drugs under the Medicaid program.
36Takeaways The inclusion of 340B compliance testing in the A-133 audit will increase the integrity of the 340B Program and further the efforts of the Department of Health and Human Services in preventing and detecting Fraud, Waste and Abuse in their programs.