We’re a 340B hospital…

Now what?

•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

Stats at a glance

FY 2007Surgeries: 12,222

ED Visits: 47,630

Inpatient discharges*: 10,021

Inpatient days*: 49,700*excluding normal newborns

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.

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)

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%).

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.

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

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

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!

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.

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.)

How to survive the NDC rule

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!!!

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

Inventory options….

Combined inventoryor

Separate inventory?

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.

Physician-administered drugsPhysician-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.

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

Software Solutions

By

Munira Zahabi

There is a choice

Do Nothing– Risk being audited– Fines

Do something– Have Dual Inventories

• Manual

– Have a Technological Solution • Automatic

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

Funds tied up in excess inventory Saves Shelf-Space Improper Inventory management = expired

drugs Employees scramble to figure which

inventory to use

Dual -Inventories

Software Solution

Audits Invoices To Ensure 340B Pricing Accuracy

Ideal for facilities who see a mixed group of patients

Software Solution

A Tool Designed to Help Pharmacies Expand Their Use of 340B Contracts

A Virtual Inventory Management System Designed for Mixed Patient Populations

Software Solution

Users utilize the 340B contract portfolio so every opportunity can be utilized

Simplifies the ordering and tracking of 340B drugs

Software Solution

Manage facility costs and inventory accurately and easily.

Pharmacies can remain GPO contract compliant for non-340B products

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

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.

Installation

Preliminary Screening done by the software company

Installation takes place– Information Systems department is involved

Software is setup

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.

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

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

Software Solution- How it works!

Rx

Software Solution

Wholesaler

Customer builds order and transmits it to 340B-Software

Software Processes Transactions and Creates Replenishment Order

Customer creates the PO and exports to the Wholesaler

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