Program Income & 340B Pharmacy Programs - Epic...
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Program Income & 340B Pharmacy Programs Fungisai Nota, PhD, MPH, CCEP October 26, 2016
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Transcript of Program Income & 340B Pharmacy Programs - Epic...
Program Income & 340B Pharmacy Programs Fungisai Nota, PhD, MPH, CCEP
October 26, 2016
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By the end of this session, participants will be able to: • Recognize allowable uses of program
income • Review requirements of tracking and
monitoring program income • Discuss implementation of 340B pharmacies
through RWHAP • Develop strategies to spend down 340B
program income
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• Fundamentals of program income • 340B pharmacy programs and
program income
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Gross income earned by the non-Federal entity (RWHAP recipient or subrecipient) that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance 45 CFR 75.2 PCN 15-03
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• Funds received by billing public or private health insurance for services provided to eligible RWHAP clients
• Fees, payments, or reimbursement for the provision of a specific service, such as patient care reimbursements received under Medicare, Medicaid, or Children’s Health Insurance Program
• Charges imposed on clients for services, as required by RWHAP Parts A, B, and C legislation
• The difference between the third party reimbursement and the 340B drug purchase price
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• Program income does not include: – Rebates: return part of a payment
(specific to ADAP); – Credits: transactions that offset or reduce
expense items allocable to the Federal award;
– Discounts: deductions in cost advance of a payment;
– or interest earned on any of the above
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• For Parts A, B, and C, allowable costs are limited to: • Core medical services • Support services • Clinical quality management (CQM) • Administrative expenses (including planning &
evaluation) as part of a comprehensive system of care for low-income individuals living with HIV
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• For Part D, allowable costs are limited to: • Family centered care involving outpatient or
ambulatory care • Support services • CQM • Administrative expenses for low-income women,
infants, children and youth affected by or living with HIV
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• For Parts F, allowable costs are limited according to the appropriate statutory provision, i.e. SPNS (Special Projects of National Significance), AETC ( AIDS Education and Training Centers)
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Support activities in excess of caps imposed by RWHAP: • Program income may be used to support
activities in excess of a cap that is imposed directly by the RWHAP, as such costs are allowable
• Examples include: administrative costs, CQM and indirect costs
Frequently Asked Questions for Policy Clarification Notices 15-03 and 15-04 HRSA/HAB
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! RWHAP recipient and subrecipients may
not use award funds or related program income to pay the salary of an individual at a rate in excess of Executive Level II, currently at $185,100 as of 1/10/16.
Frequently Asked Questions for Policy Clarification Notices 15-03 and 15-04
HRSA/HAB
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• To the extent available, recipients and subrecipients must disburse funds available from program income and rebates (Part B) before requesting additional cash payments
• Program income for service provided within one period of performance may be received in the following period, and should be utilized in the year in which it is received
• Example: Fiscal year (FY16) ends June 30th. Service delivered June 29th. Program income received July 6th, and should be spent in FY17
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RWHAP Parts A & B have a one-year performance period Implication: Program income must be disbursed within that same period of performance (one year)
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RWHAP Parts C, D & F have multi-year performance periods. Implication: Program income must be disbursed within that same period of performance (usually 3-5 years)
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To the extent that it is available, program income must be spent first. Recipients must include program income projections when planning for services based on the comprehensive HIV care and treatment needs of the recipient’s service area – Estimate (to the extent possible) how much
program income will accrue – Budget projections implications – Strategic thinking about services and allocation
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Additive: added to funds committed to the project or program and used to further eligible project or program objectives – Program income may only be used for
allowable costs under the award
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• Recipients are required to track and account for all program income to demonstrate that it is allowable and allocable
• Recipients must report Federal program income earned on Line L of their Federal Financial Report (FFRs)and Federal program income expended in accordance with the addition alternative on line N • Tracked per funding stream • Implications for tracking system and
accounting needs
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• Subrecipients should retain program income for “additive” use within their own programs • Recipients must monitor utilization to ensure
allowable expenditures
• Program income earned by subrecipients must be reported to recipient
• Program income earned by the subrecipients should not be reported on the recipient’s FFR
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Can program income be used to pay for services that Medicaid does not cover?
Yes. Program income may be used to pay for any medically necessary services that Medicaid does not cover or only partially covers, as well as premiums, copays, and any deductibles otherwise allowable under RWHAP.
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If an ADAP purchases a client’s insurance, but the RWHAP Part C program purchases the medication and bills the insurance, who generates program income?
Answer: Part C. As they generate the program income by billing insurance, they would receive the program income
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Permit covered entities “to stretch scarce Federal resources as far as possible, reaching more patients and providing more comprehensive services”
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Opportunity to provide additional RWHAP services and/or extend the reach of existing services to improve health outcomes for PLWH
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• Average savings of 25% - 50% on outpatient drug purchase for 340B covered entities
• Savings may be used to: • Reduce price of pharmaceuticals • Expand services offered • Provide services to more patients
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1. Physician/NP/PA writes script for Truvada 2. Patient takes script to the pharmacy 3. Pharmacy orders Truvada from an approved 340B
supplier at $500 and bills the patient’s insurance 4. Insurance company reimburses the pharmacy $1,100 5. Pharmacy deducts the contractually agreed fees
(e.g. $120) and passes the rest to the covered entity: $980
6. Covered entity pays the manufacturer or distributor $500 for the Truvada
7. Covered entity keeps $480 as the 340B revenue and reinvests it to RWHAP
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• All 340B generated revenue is considered program income
• When the RWHAP grant is the sole Federal award that makes an organization eligible as a 340B covered entity, all program income should be attributed to the RWHAP grant
• When an entity is 340B eligible and purchases pharmaceuticals via 340B pricing under multiple awards, the recipient must use reasonable allocation method for the attribution of costs and program income, and be able to document the methodology used
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• Same as other program income, and must be used the same way – Reinvested in RWHAP
• Must be spent within certain time periods (depending on RWHAP part)
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• Opportunity to expand services – Dental – Behavioral health – Food pantry
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Look at the care continuum in your jurisdiction or organization. • What kind of services would help
increase retention in care? • What kind of services would help
increase viral suppression rates?
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• 340B program income should be included in projections and budget tracking
• Best practices include developing a plan to spend down program income, as well as 340B program income so as not to have unobligated balances (UOB)
