Download The 340B Program

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 2007
Surgeries: 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.
Program requirements
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
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.
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.)
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 inventory
or
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 drugs
Physician-administered drugs:
- We have family practice locations so
our pharmacy also purchases physicianadministered 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
Dual -Inventories
 Funds tied up in excess inventory
 Saves Shelf-Space
 Improper Inventory management = expired
drugs
 Employees scramble to figure which
inventory to use
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!
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
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