1. Southwest Consulting Associates
340B Drug Pricing Program Proposed Mega-Guidance and Compliance Review HFMA NENY April 13, 2016
Jeff Norman
Southwest Consulting Associates

2. Discussion Outline Background Key Changes Patient Definition
Audit & Compliance
Group Purchasing Organization (GPO) Prohibition
Duplicate Discount
340B Health Survey
HRSA Audit Statistics
HRSA Audit – What to expect
Issues to Watch
Closing Remarks
Questions

3. Background Section 340B of the Public Health Service Act (42 USC 256b)
Overseen by the U.S. DHHS, Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA)
Requires drug manufacturers to give substantial discounts on covered outpatient drugs to certain providers (“Covered Entities” or “CEs”) that qualify for the 340B Drug Pricing Program based upon the patients served by the entity (i.e. low income/safety net individuals).

4. Background
Purpose of the program is to allow a CE to stretch scare resources to reach more eligible patients and provide more comprehensive services
Discount available to any outpatient, not limited to low-income patients
There is no restriction on how a CE may use its additional revenue from the discounted drugs
Savings to a CE typically 20% to 50%
Government runs program but has no financial stake

5. Background Only covers prescriptions to outpatients
Covers drugs dispensed in ED, clinics, surgery centers, dialysis, or prescriptions written for an eligible patient of a CE that is filled at the CE’s own pharmacy or at a retail pharmacy that has a contract with the CE
Satellite (“child site”) must be included on a reimbursable line of the Medicare cost report

6. Background
ACA and other legislative changes greatly expanded the definition of CEs.
Currently about 20,000 CE sites - roughly double the number from 2001
CEs include:
FQHCs
DSH hospitals >11.75%
CAHs
SCHs
free standing cancer hospitals
children’s hospitals

7. Background Historically, very little formal guidance provided
Federal Register notices, guidance, FAQs, personal letters
“mega-reg” idea was discarded last year after orphan drug suit confirmed HRSA’s limited statutory authority to promulgate regulations
President’s FY 2017 budget proposal requests regulatory authority for HRSA.
Mega-guidance published in 8/29/15 Federal Register
Comments were due 10/27/15
Unclear legal status of “guidance” – not legally binding but agency will enforce, then challenge in court
This program is very unique in many ways when compared to other healthcare programs.

8. Key Changes in Guidance
No 340B drugs for discharge prescriptions resulting from inpatient stays.
No 340B for drugs given to outpatients that are included in a bill for inpatient services even if outpatient at the time drug was dispensed (e.g., 72-hour rule, observation days).
No 340B for prescriptions written outside the hospital or child sites.
Infusion orders written outside the hospital
Referrals, follow-up care, non-reimbursable hospital clinics, providers treating patients outside the hospital

9. Key Changes in Guidance
No 340B for prescriptions written by providers who are not employees or independent contractors - CE may bill for the service.
No 340B for Medicaid bundled drugs (but could use GPO for these drugs).

10. Patient Definition
Under this proposed guidance, an individual will be considered a patient of a covered entity, on a prescription-by-prescription or order-by-order basis, if all of the following conditions are met:
The individual receives a health care service at a facility or clinic site which is registered for the 340B Program and listed on the public database.
The individual receives a health care service provided by the covered entity (CE) provider who is either employed by the CE or who is an independent contractor for the CE, such that the CE may bill for services on behalf of the provider.
An individual receives a drug that is ordered or prescribed by the covered entity provider as a result of the service described in (2) above.

11. Patient Definition
The individual’s health care is consistent with the scope of the Federal grant, project, designation, or contract. (Ex. If a child site of an FQHC is limited in its scope of grant to treating pediatric individuals, then only individuals receiving pediatric care meeting the limitations specified in the child site scope of grant would be eligible to receive 340B drugs.)
The individual’s drug is ordered or prescribed pursuant to a health care service that is classified as outpatient.
The individual’s patient records are accessible to the CE and demonstrate that the CE is responsible for care.

12. Patient Definition – Operational Concerns
Seeing a physician in his/her private practice which is not listed on the public 340B database, even as follow-up care from a stay at a registered site, would not be eligible.
Inpatients discharged with a prescription will no longer be eligible for 340B drugs.
An individual receiving care provided by another health care organization that has an affiliation arrangement with the covered entity will not be considered a patient of the CE.
Simply having privileges/credentials at a CE is not sufficient for 340B Program purposes.
An individual would not be considered a patient of the CE whose only relationship to the individual is the dispensing or infusing of a drug.
SCA client example:
Corporate entity owns the hospital
Corporation bought an infusion practice, which was owned by a doctor. Doctor is employed by corporation, not the hospital CE.
Hospital also has a direct contract with oncologist.
Under proposed guidance, 340B drugs can be dispensed by one and not the other.
HRSA is asking for payroll records, check stubs, and/or physician contracts to make sure they are employed by CE and to see what other arrangements exist.

13. Patient Definition – Operational Concerns
An individual is considered an eligible patient if his/her health care service is billed as outpatient to the patient’s insurance or third party payor.
Maintain auditable records document changes in patient status due to insurer determinations - How the service is billed to the payor (payor billing policies vary significantly). How to track retro payer determinations?
CE employees are not eligible to receive 340B drugs solely by being employees, but by being a patient as defined in this guidance.

14. Patient Definition - Legal Issues
Terms and definitions are somewhat unclear and up to interpretation (i.e. may bill for services).
Complex physicians arrangements need assessing.
CEs should consider engaging counsel as a key component of the 340B oversight program, and potentially to serve on the compliance committee.

15. Audit and Compliance Record Retention:
Section 340B(a)(5)(C) of the PHSA requires a CE to permit the Secretary and certain manufacturers to audit entity records pertaining to the CE’s compliance with 340B Program requirements.
HHS proposes a record retention standard of not less than 5-years, including child sites and contract pharmacies.
If HHS, during an audit, finds a pattern of failure to comply, HHS is not precluded from accessing existing records prior to the 5-year period.
A CE’s failure to provide records is grounds for termination from the 340B Program.
10-year record retention for fraud and abuse.

16. Audit and Compliance Contract Pharmacy Documentation:
A written contract must exist between the CE and contract pharmacy, and must include all locations of a single pharmacy company the CE plans to use and all child sites that plan to use the contract pharmacies.
Reminder - HRSA Recertification Attestation Language:
(6) if the covered entity uses contract pharmacy services, you certify that the contract pharmacy arrangement is being performed in accordance with OPA requirements and guidelines including, but not limited to, that the covered entity obtains sufficient information from the contractor to ensure compliance with applicable policy and legal requirements, and that the hospital has utilized an appropriate methodology to ensure compliance (e.g. independent audit, or other mechanism).

17. Audit and Compliance Contract Pharmacy Compliance:
The 2010 contract pharmacy guidance recommended annual audits of contract pharmacies; proposed guidance further clarifies the expectations of the recommendation.
The expectation of an annual audit of each contract pharmacy location by an independent auditor.
Additionally, a CE should compare its 340B records with contract pharmacy dispensing records at least quarterly to ensure neither diversion nor duplicate discounts have occurred.

18. Audit and Compliance Contract Pharmacy Compliance:
A CE should correct any instances of diversion or duplicate discounts found during either the annual audit or quarterly review and report corrective action to HHS.
“By certifying compliance with all 340B Program requirements, a covered entity attests that it employs effective business practices to ensure and monitor ongoing compliance, including self-audits where appropriate; maintains accurate 340B database information; and notifies HHS in the event the entity is no longer eligible for the 340B Program or has violated any 340B Program requirement, subject to HHS audit.”

19. Audit and Compliance - Legal Issues
Contract pharmacy contractual agreement regularly must be updated to detail child site changes.
Attestations
Guidance on self-reporting and disclosure – There is no materiality threshold!
Do hospitals have the infrastructure in place for an effective compliance program that includes hospital compliance committee, internal audit, an external audit firm and legal counsel, if needed?

20. GPO Prohibition
To be eligible for the 340B program, CEs are subject to the GPO prohibition which states that to be eligible, these hospital covered entities do not “obtain covered outpatient drugs through a group purchasing organization or other group purchasing arrangement.”
A GPO may be used by CE to purchase drugs dispensed to inpatients or to purchase drugs that do not meet the definition of a covered outpatient drug.
Exceptions:
Drugs used at off-site outpatient facility that is not listed on public 340B database.
Inpatient whose patient status subsequently changed to outpatient by a 3rd party.
Situations where the CE cannot access a drug at the 340B price or at wholesale acquisition cost (WAC) to prevent disruptions in patient care (must document).

21. GPO Prohibition GPO compliance is required for program participation.
GPO violations are fairly common.
Exclusion from the program possible for systemic violations is occurring.
Hospitals have 30-days from HRSA final report to document its case.
The Notice & Hearing process has been extended to cover GPO prohibition. Hospitals must demonstrate a GPO violation was an isolated error as opposed to systematic violation.

22. Duplicate Discount
Previously, CEs made the determination to carve-in or carve-out Medicaid FFS patients and notified the state of its decision. Under proposed guidance, Medicaid Managed Care (MCO) are included in the decision matrix:
The CE may make a different determination regarding carve-in or carve-out status for MCO patients than it does for FFS patients.
CE can make different decisions by CE site and by MCO.
CEs should have mechanisms in place to identify MCO patients.
CEs and States should work together on methods to prevent duplicate discounts.
The use of Bank identification numbers, Processor Contract Numbers, and National Council for Prescription Drug Program (NCPDP) codes are important to identify MCO patients and 340B claims.
Billing instructions are beyond the scope of the 340B Program.
Each state can do its own thing.
BIN/PCN numbers not collected by hospital in admissions in many cases.

23. Duplicate Discount - Operational Concerns
Implications:
Added complexity of a decision tree and use/non-use of billing codes by states make MCO transitions ripe for duplicate discount violations.
Understanding each state’s billing limitations and your hospital/client risks are critical.

24. 340B Health Survey of Health Members
340B Health is an association of more than 1,100 hospitals. They are the leading advocate and resource of those providers who serve their communities through participation in the 340B drug pricing program.
340B Health asked members to complete a survey describing how the proposed guidance would affect their use of the 340B program hospital responded to the survey and a segment of the results are displayed on the next five slides.

25. 340B Health Survey of Health Members
The proposed guidance states that the script or order must be written as a result of a service billed as outpatient for 340b to be used, meaning that hospitals could no longer use 340B for discharge prescriptions written as the result of an inpatient stay.
Currently, it is common for 340B hospitals to use the program to send inpatients home with the prescriptions they need. Discharge prescriptions are used on an outpatient basis (after the patient is discharged) they are dispensed to outpatients and are treated by hospitals and the government as outpatient drugs.
46.06% - highly problematic
11.20% - Consider dropping program
17.43% - moderately problematic
4.98% - slightly problematic
2.90% - not problematic
17.43% - N/A

26. 340B Health Survey of Health Members
In particular, patients from rural areas might seek an expert diagnosis and treatment plan at a city hospital and return home for treatment at the local provider where there might not even be an oncologist on staff.
The proposed guidance states that an infusion order must be written as a result of services provided in the hospital or a registered clinic to be filled with 340B and appears to permit 340B only for drugs that are ordered or prescribed during a service provided on the premises of the hospital.
32.37% - Highly problematic
20.75% - consider dropping out of 340B
14.52% - moderately problematic
6.22% slightly problematic
7.05% - no effect

27. 340B Health Survey of Health Members
Currently, 340B is used to pay for drugs administered during outpatient care, but the billing for those drugs is sometimes bundled with inpatient care. This happens most commonly with emergency room patients who are initially treated as outpatient and later admitted.
HRSA has proposed that for 340B to be used the script or order must be written as a result of a service billed as outpatient.
Under HRSA’s proposed guidance, many drugs provided in the emergency department or as part of observation services prior to an inpatient stay would be ineligible for 340B discounts due to operation of Medicare’s 72-hour reimbursement rule. This 3-day bundling rule states that charges for outpatient services provided in the 3-days before or on the day of admission to a general acute care hospital must be included in the inpatient charges.
32.35% - Highly problematic
16.81% - consider dropping 340B
18.91% - moderately problematic
.08% - slightly problematic
.05% - No effect

28. 340B Health Survey of Health Members
Due to vague definitions and complex physician arrangements, defining terms such as “independent contractor” and “may bill for” could be problematic here.
Statutes and policies regarding the definition of hospital employees and independent contractors vary wildly from state to state and hospital to hospital. 340B hospitals are currently expected to have an employment, contractual, or some other arrangement with a provider to be able to use 340B for a prescription order by that provider, which allows 340B use for prescriptions or orders written by privileged providers. While privileged providers constitute independent contracts in most states, not all states follow this rule.
The proposed guidance would require that for a health care professional to write a prescription for a 340B drug, the individual must be an employee or “independent contractor” of the hospital, such that the covered entity may bill for services on behalf of the provider.

29. 340B Audit and Compliance Outline
HRSA Audit Statistics
HRSA Audit – What to expect
Takeaways

30. HRSA Auditors There are roughly 19 HRSA Auditors
Division of Financial Integrity (CPA/Auditing Background)
Required to participate in 2 audits each month
HRSA currently has 19 auditors specifically tasked to audit 340B programs for hospitals, Community health Centers and clinics nationally.
These auditors work for the Division of Financial Integrity, so generally speaking they have CPA and audit backgrounds. In general, these auditors do not have pharmacy experience, but are learning very quickly and improving in the knowledge of pharmacy operations, knowing what questions to ask, and how to identify problem areas.
The goal for HRSA is for each auditor to conduct 2 audits per month.

31. HRSA Audits Stats (as of 03/31/2016)
Audit statistics since 2012:
Over 500 on site audits conducted
Over 7,000 outpatient / sub-grantees
Over 13,000 contract pharmacy locations
HRSA uses a risk stratification methodology so that entities with higher risk factors are more likely to be selected for an audit. Risk factors include:
Volume of purchases
Number of child sites
Number of contract pharmacies

32. (Based on results published through 3/31/2016)
HRSA Audits Stats
(Based on results published through 3/31/2016) 
audits
audits
audits
audits
audits
This slide reflects the audits conducted by year, only where published results are available through 3/31/ As you can see audits have been increasing, and we understand that HRSA did meet its goal of conducting 200 audits in 2015, so additional results should be available in the near future.
Assuming 19 auditors conducting 2 audits per month (for 10 months), audit capacity is approx. 380 annual audits, so we expect, simply due to HRSA’s increase in budget for 2016, as well as the staffing levels in place, for the number of audits to again increase sharply in 2016.

33. HRSA Audit Stats
 (Based on FFY 2015/2016 audits published through 3/31/2016) 
DSH Hospitals 57%
Critical Access Hospitals 15%
Community Health Centers 13%
Other Centers 10%
Sole Community Hospitals 4%
Children’s Hospitals 1%
Of the 213 published audits conducted in 2015 and 2016, 57% of those were conducted at Medicare DSH Hospitals. Since Medicare DSH hospitals account for roughly 75% of all 340B savings, we would expect the focus of audit activity to continue to be on Medicare DSH hospitals moving forward.

34. (Based on FFY 2015/2016 audits published through 3/31/2016)
HRSA Audit Stats
(Based on FFY 2015/2016 audits published through 3/31/2016) 
Audits Conducted
213 - Audits conducted (where results are published)
122 - at Medicare DSH hospitals (57%)
Audit Stats:
55 with no findings (26%)
158 with findings (74%)
95 with multiple findings (45%)

35. (Based on FFY 2015/2016 audits published through 3/31/2016)
HRSA Audit Stats
(Based on FFY 2015/2016 audits published through 3/31/2016) 
96 – Database errors (45%)
94 – Diversion (44%)
78 hospitals had 340B drugs dispensed at contract pharmacies for prescriptions written at ineligible sites not supported by responsibility of care (37%).
8 hospitals had drugs dispensed by ineligible providers
14 hospitals cited for inadequate controls for preventing diversion
57 – Duplicate discounts (27%)
45 hospitals had incorrect NPI number listed on Medicaid Exclusion File (MEF)
10 hospitals billed Medicaid contrary to information on MEF.
17 – GPO violations (8%)
4 – Failure to maintain auditable records

36. (Based on FFY 2015/2016 audits published through 3/31/2016)
HRSA Audit Stats
(Based on FFY 2015/2016 audits published through 3/31/2016) 
Sample of sanctions:
120 – Repayment to manufacturer (56%)
20 – Contract pharmacies terminated
2 – Termination of covered entity
3 – Termination of ineligible site

37. HRSA Audit What to Expect
This part of the presentation doesn’t encompass everything in a HRSA audit but we wanted to hit on a few areas that can get a little sticky during an audit. It can go much smoother if you just know what to expect.
I don’t know how many of you have been audited but the audit process has continued to evolve as HRSA learns from each audit. An audit today is very different from an audit 2 years ago or even last year.

38. HRSA Audits What to expect Engagement letter with data request
Conference call to review data request and schedule the on-site audit
Policies and Procedures
Medicare Cost Report with Trial Balance
Crosswalk Medicare Cost Report to Child Sites
Contract Pharmacy Agreements
I thought we would start with the covered entity receiving the audit engagement letter. The letter will come with a data/information request and they will set up a conference call with you to review the data request and give you an opportunity to ask questions.
In the data request they will ask for Policies & Procedures, Medicare Cost Report with Trial Balance.
*Something new we are seeing that seems fairly standard now is the auditor is asking for a crosswalk connecting your child sites on the HRSA database to the reimbursable line on the cost report.
As a best practice, we would recommend you create this crosswalk and keep it updated as you add or remove child sites. It’s one less thing you have to worry about when you are pulling all of the other information together for the HRSA auditor. Add it to your self-audit and review it every year in comparison to the cost report.
They will also ask for your Contract Pharmacy Agreements

39. HRSA Audits What to expect
6 months of data (Hospital & Contract Pharmacy)
Specific data elements
Pick drug administrations from accumulation
5 high cost drugs
Pick prescriptions from Contract Pharmacy
The auditor will request a listing of all dispensed 340B prescriptions or drug orders in a 6 month timeframe. This is 6 months of drug administration data from the hospital and 6 months of prescription data from your contract pharmacies.
To date they are just asking for 340B data.
They request it in an Excel format. They will request specific data elements that they want to see. We have found this varies a little depending on auditors and how they want to audit the data. Your split-billing software vendor can help you with this report but we caution you to try to just give them the data elements they ask for.
Treat them like you would Joint Commission. Give them what they ask for but no more or no less. Answer their questions honestly but don’t risk giving them something extra to question.
From the data you send they will pick a sample of drug administrations, + 5 high cost drugs from the hospital data. They will also request a sample of prescriptions from the contract pharmacy data for documentation review.

40. HRSA Audits What to expect
Medicaid Provider Enrollment Verification Letter
UB04
Listings
Provider (exclusive vs. non-exclusive)
All sites that purchase and/or provide 340B drugs, with their physical address
Contract Pharmacies with addresses
All accounts used to purchase drugs
OPA database review
The auditor will ask for your Medicaid Provider Enrollment Verification Letter – this is sometimes difficult for the hospital to put their hands on. It is the document the facility received that has your Medicaid ID Numbers or Provider Numbers for all your entities. Make sure you know where it is and if you can’t find it start working with Medicaid to get a copy. Medicaid does not move fast and it may take some time to get it.
The HRSA auditor will want to look at how you are billing Medicaid. They will request a few UB04’s. This may be in the initial data request or they may wait until they are onsite to request these.
Additionally, they will request several listings:
They want a listing of your physicians, and in some cases broken down by exclusive providers vs. those that practice at another location.
They want a list of all sites that purchase or provide 340B drugs, including addresses
A list of Contract Pharmacies and their address,
A listing of all accounts used to purchase drugs
Portions of this data will be compared to the OPA database for accuracy. As mentioned earlier, the most common audit finding is related to incorrect data in the OPA database. This should be reviewed as part of quarterly self-audits for accuracy.

41. HRSA Audits What to expect Policy and procedure detailing:
procurement process in each applicable setting
inventory process in each applicable setting
Dispensing processes
If not detailing in P&P, need narrative
Self-audit documentation.
The auditor may ask for a narrative of your procurement, inventory and dispensing processes in each applicable setting. This may already be in your policies and procedures that you send the auditor. We recommend that you don’t recreate this if you already have it in your P & P, you can just let them know they will find it in your P & P.
They are going to look at your self-audit documentation on site but some auditors may ask you to send it ahead of time when you send the other requested information so they can review it before they come onsite. They ask for supporting documentation used during monitoring the contract pharmacy, including reports or memos issued during monitoring.

42. HRSA Audits What to expect Room set-up
Enclosed room that locks (for up to 3 staff)
Internet access (up to 3 computers)
White board
Access to telephone, fax and copier
Computer & projector (we suggest 2)
Someone to navigate EHR (we suggest 2)
Parking spaces (likely 2)
Access to financial, transactional documents and patient information related to 340B program.
We have had facilities ask why they are so specific about the room set-up. They want an enclosed room that locks so they can lock up their equipment and data when they leave the room for lunch or when they tour the pharmacy.
They are going to ask for internet access because they pull up the OPA website and go through part of it with you. They use Google to pull up a physician to see where he/she practices, they Google a clinic if they run across a prescription written in a clinic that doesn’t match the name on the HRSA database. They Google drugs if the record has a generic name instead of the Brand name in the record.
The auditor will sometimes ask for a white board because some of them want to walk through different processes on the white board, such as inventory management, split-billing process and contract pharmacy processes.
They will ask for access to a telephone, fax and copier.
The computer and projector is for the record review, we suggest that you have 2 but it means you will need 2 people that can navigate through the medical records during this part of the audit. The purpose for having two people is that while one record is being reviewed, the second person can be accessing the next record. This helps the audit move at a fluid pace, showing the auditor what they need to see, nothing more nothing less, and transitioning to the next record.
2 parking spaces and access to financial documents, transactional documents, and patient information related to the 340B program.

43. HRSA Audits What to expect (on-site) Opening conference
List of prescription samples for review
List of providers for proof of relationship at time of drug order
Tour of pharmacy (may talk to pharmacy buyer)
Now, onsite they will start with an opening conference to introduce themselves and go through their audit process and answer any questions. You can invite anyone to the opening conference. They like to see participation from Administration and of course you need your Authorizing Official and Primary Contact there. As a best practice, we recommend that you are well represented with personnel responsible for the program from pharmacy to finance to compliance representatives.
They will give you the prescription samples they want to review and a list of providers where they want to see proof of a relationship with the facility. Some of them start out with a small list of providers and give you other list throughout the audit, others will give you the whole list.
As a best practice recommendation, they are going to pull almost every, if not every provider on your sample so you might as well give the medical staff office the entire list of physicians on the prescription sample list they give you so they can go ahead and start pulling the information you need.
Some hospitals have tried to just pull eligibility dates for the physician, nurse practitioners, PA’s, whatever providers are on the list but they want to see an employee payroll record or contract with the hospital.
They are also going to tour at least the main hospital pharmacy.

44. HRSA Audits What to expect (on-site)
Walk through process on white board
Inventory management
Split-billing
Contract Pharmacy
Ask questions about policies and procedures
Where in the policy does it identify the time the patient status is determined
I discussed the white board earlier.
They may ask questions about your policies and procedures. We have had a few auditors specifically ask “where in the policy does it identify the time the patient status is determined. We found that most facilities are pretty good at defining inpatients and outpatients in their policies and procedures but they are specifically looking for a policy that states when and how your facility determines to use a 340B drug on a patient in a mixed use area of the hospital that starts out as an outpatient and is admitted to inpatient status.
Again, this will likely change when the mega-guidance is implemented, but today we are talking though the current process.

45. HRSA Audits What to expect (on-site) Record review
Location of encounter
Outpatient at time of drug administration
Provider
Payor
When looking at the record they want to see the location of the encounter, verify they are outpatient, review the physician provider, and review the payor information. If the patient is a Medicaid patient, the auditor is obviously looking at the UB for an NPI or Medicaid Provider number that is listed on the OPA database for your facility.
We regularly find OOS Medicaid issues in our audits. The UB will detail the NPI number for another state, but the OPA database for the facility only lists the in-state NPI number. Make sure all NPI number are on the OPA database and the Medicaid exclusion file.

46. Other Best Practices Participate in industry meetings and training
Regularly update and vary self-audit practices
Prepare in advance to be audited
Have annual external, independent audit conducted
Ensure your 340B program has appropriate resources.
Stay on top of industry training and meetings. I am continually learning for the experiences and perspectives of others. (340B University)
Prepare for an audit now. Regularly review P&P, test to ensure policies are understood and followed. Make sure all program documentation is accounted for and can be produced.
Hospital 340B practices are very complicated and much like the leaky dam in the cartoons we see. You plug one hole and a new one arises. You have to continually plug new holes. Self-audit practices act the same way. You have to continually update and vary your self-audits to catch the next vulnerability in your program.
Conduct annual external, independent audits.
Training
Practice
Continually update policies, self-audit practices, training and education.
If audited by HRSA, bring in your external auditor

47. Possible Impact of Section 603 on 340B Hospitals
Bipartisan Budget Act of 2015
November 2, 2015
Continues trend to site-neutral payments
Items and services after 1/1/2017 in new off-campus departments of a provider generally will not be paid under Medicare OPPS, but instead under other payment systems, e.g., ASC or PFS.

48. Section 603 Does Not:
Eliminate provider-based status for on-campus or pre-existing or future off-campus departments
Prevent a hospital from establishing or acquiring off-campus outpatient departments after 11/2/15
Apply to services in a dedicated ED
Apply to CAHs or RHCs
Apply to departments that were billing under OPPS prior to 11/2/15

49. Unknowns: Waiting for CMS 2017 OPPS regulations
Under development on 11/2/15
Increase in square footage
Exposed existing services
Add new services
Change types of services
Renovate/replace facility
Change of Ownership
Relocation

50. Impact on 340B Should have no impact on grandfathered facility
But – can services in non-grandfathered facilities still be included in reimbursable cost center on cost report, thereby eligible for 340B prescriptions?
Will payment differences for grandfathered and non-grandfathered off-campus facilities be treated differently on cost reporting of costs and charges?

51. MedPAC Recommendations
Medicare Payment Advisory Commission
Medicare pays ~ $1.2 billion above 340B drug acquisition costs
March recommendations to Congress included:
Medicare Part B payments to hospitals for 340B drugs be reduced by 10%
Savings from payment cut redistributed to hospitals based on uncompensated care on Worksheet S-10
OIG 2015 report advocated for shared savings between Medicare and 340B-covered entities

52. National Sales Manager
Jeff Norman
National Sales Manager
2805 N. Dallas Parkway, Suite 620
Plano, TX
(972)