On Thursday, February 25, 2016, members of Visante’s 340B team of experts presented a webinar covering information gleaned from the 2016 Winter 340B Coalition conference held the preceding week in San Diego. Below is a summary of information shared by Kristin Fox-Smith, Douglas E. Miller, and a brief description by Tony Zappa of a new product developed by Visante and introduced at this meeting to help covered entities conduct 340B self audits and keep track of compliance requirements and related documentation.
Omnibus Guidance (aka “the Mega-Guidance”)
Perhaps the most anticipated announcement was the final release date for HRSA’s proposed Omnibus Guidance. The news ended up being that there was no news in this area. It turns out that HRSA/OPA staff are still reviewing and evaluating the more than 1,250 comments that were submitted following publication of the proposed “Mega Guidance” in 2015. Comments were submitted by some 785 Disproportionate Share Hospitals in addition to the many other types of 340B participating programs. At this point, it seems unlikely that a final omnibus guidance will be published this year…if ever.
What Was Emphasized: State Medicaid Communications and Accurate Documentation
Conference speakers emphasized the importance of maintaining detailed records regarding regular reviews and updates of the OPA Database, including the Medicaid Exclusion File, as well as entity billing procedures including managing modifiers for billing out-of-state Medicaid programs for cross-border or transient beneficiaries. During Visante’s audit and compliance support projects, HRSA auditors have indicated they want to see evidence of regular updates to these data files. Covered entities (CEs) are highly encouraged to record and maintain detailed descriptions of their regular conversations with state Medicaid personnel. CEs should also have and maintain written procedures describing how these contacts and updates are to be made, who should make and record them, and what information should be collected from Medicaid agency contacts.
Medicaid Managed Care
Medicaid Fee-for-Service and Medicaid Managed Care Organizations will need to establish some standard method for identifying 340B-eligible prescriptions covered by their programs. At this time, CMS requires that states design and implement a method to identify which prescriptions qualify. This places the burden of compliance on the states but leaves 340B covered entities responsible for avoiding duplicate discounts. One method used to prevent this problem is the Medicaid Exclusion File, used by most states to identify and exclude 340B-eligible prescriptions from their rebate program requests. However, even if a state does not use the Medicaid Exclusion File, OPA is requiring that 340B-eligible entities be listed. Again, detailed documentation is a must to demonstrate to auditors that regular discussions are taking place between covered entities and state Medicaid agency staff regarding correct billing procedures and that the Medicaid Exclusion File is kept up to date and accurate on a regular basis.
The New AMP Rule
This rule defining the new method for calculating Average Manufacturer Price (AMP) for drugs was originally proposed in February 2012 as a part of the Medicaid provisions in the Affordable Care Act. Published as a final rule in the Federal Register on February 1, 2016 (81 Fed. Reg. 5170), the “AMP Rule” will become effective the latter half of 2016. The impact of the new “AMP Rule” will likely first be felt in retail settings such as 340B contract pharmacies and covered entity owned pharmacies. Exclusions for “best price” requirements will continue and the new rule will expand drug rebates to Medicaid Managed Care beneficiaries. At this time, it appears that it will not apply to physician-administered drugs, thus not impacting charges or billings in the hospital mixed-use areas.
Implementation of the AMP Rule will not directly change 340B compliance requirements for covered entities. However, there could be an indirect impact on 340B prices because sales to 340B entities, regardless of price, are excluded from the calculation of “best price” that impacts the AMP. This may allow manufacturers to offer covered entities prices below typical 340B costs without affecting the rest of their pricing programs.
Future Guidance Possible for State Medicaid Agencies
The AMP final rule calls for Medicaid programs to reimburse for prescriptions at pharmacies’ actual acquisition cost (AAC), plus a professional dispensing fee. Some states have already made this change, with others contemplating such a move within the next 12 months. Covered entities with owned pharmacies will be expected to bill Medicaid at their actual 340B cost – this could also be extended to Medicaid Managed Care plans. Entities should follow reimbursements carefully, and work with Medicaid agencies and MMCO plans to make sure the professional dispensing fee covers ALL costs associated with dispensing and patient counseling. Covered entities will also need to work with Medicaid agencies and MMCOs on methods to identify 340B-eligible prescriptions as noted above.
New Help for 340B Covered Entities Compliance Tool: 340B
Introduced at the 2016 Winter 340B Coalition Conference, Compliance Tool: 340B provides a simple way to manage required self-audits and prepare for annual independent audits and attestations. This new tool was built by Pharmacy Stars, a leader in application development for pharmacies and is backed up by Visante’s 340B expertise in this area.
Visante is Your 340B Expert
Visante has conducted more than 80 comprehensive 340B Integrity Assessments and Audit Readiness Reviews for Disproportion Service Hospitals, Children’s Hospitals, freestanding Cancer Hospitals, Rural Referral Centers, Critical Access Hospitals, HIV centers, Ryan White facilities, and Hemophilia Treatment Centers. We have worked with all split-billing vendors servicing these types of facilities.
For more information about Visante’s Compliance Tool: 340B, you may contact Tony Zappa or send a query to Solutions@visanteinc.com.