Optimizing The 340B Program

Promoting Integrity, Access, & ValueTo deliver clinically and cost-effective pharmacy services

This educational product created by:Health Resources and Services Administration | Office of Pharmacy Affairs

340B Peer-to-Peer Program

340B 101:

The Basics

Purpose of ActivityThe purpose of this module is to illustrate the history, intent and statutory principles of the 340B Drug Pricing Program.

Intent of the program340B pricing

determinationEntity eligibility

Entity enrollment procedure

Program requirements and prohibitions

Program guidance and policy

Patient eligibility determination

Drug-delivery options Available resources

Topic Guide

Creation of the 340B Program

Certain safety net covered entities

Outpatient drugs

Price discountsRequired for all

manufacturers in Medicaid

340B Program

Intent of the 340B Program

Stretch scarce federal resources1

Reach more eligible patients1

Provide more

comprehensive services1

Reduce price of pharmaceuticals

for patients

Expand services offered to patients

Provide services to more patients

1. HR Rep No. 102–384, pt 2, at 12 (1992).

1992340B Statute

19931st Guidelines

1996 Contract Pharmacy,PatientDefinition

2004Vendors

2010 Affordable Care Act

1st Proposed Regulations

340B Program Evolution

25%–50% of the average wholesale price

Drug Manufacturers

Drug Pricing Program

340B

The 340B price is actually considered a “ceiling” price

Can offer sub-ceiling prices

340B Price

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• Outpatient prescription drugs

• Over-the-counter drugs (with prescription)

• Clinic-administered drugs

• Biologics (prescription)

• Insulin

• Inpatient drugs

• Vaccines

340B Covered Drugs

› Federal Grantees • Comprehensive hemophilia

treatment centers

• Federally qualified health centers/lookalikes

• Urban/638 health center

• Ryan White programs

• Sexually transmitted disease/tuberculosis

• Title X family planning

› Hospital Types

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*340B eligible through Section 7101 of the Affordable Care Act (ACA)

• Disproportionate share hospitals• Children’s hospitals*

• Critical access hospitals*

• Free-standing cancer hospitals*

• Rural referral centers*

• Sole community hospitals*

340B Eligible Entities

Hospital Eligibility Criteria

Entity Type Non-profit/ Govt. Contract DSH% Group Purchasing Organization (GPO)

Prohibition* Orphan Drug* Applies?

Disproportionate Share Hospital (DSH) Yes >11.75% Yes No

Children’s Hospital (PED) Yes >11.75% Yes No

Free-standing Cancer Hospital (CAN) Yes >11.75% Yes Yes

Critical Access Hospital (CAH) Yes N/A No Yes

Rural Referral Center (RRC) Yes >8% No Yes

Sole Community Hospital (SCH) Yes >8% No Yes

*340B eligible through Section 7101 of the Affordable Care Act (ACA)

Hospital Outpatient Facilities

› In order for outpatient facilities to become eligible for the 340B Program:

– The outpatient facility must be an integral part of the hospital

– The outpatient facility must be included as reimbursable on the covered entity’s most recently filed Medicare Cost Report

– To register additional outpatient facilities, complete the online Register an Outpatient Facility registration at: http://opanet.hrsa.gov/OPA/CERegister.aspx

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340B Enrollment Procedure

Determine Eligibility Enroll online

Submit Forms to OPA as directed

Await decision from OPA

http://opanet.hrsa.gov/OPA/CERegister.aspx

› Ensure entity is listed correctly in the OPA 340B database

› Set up an account with wholesaler using 340B ID for purchasing• Wholesalers will not ship discounted drugs unless 340B ID is an

exact match to the 340B database

› Prepare operational and logistical monitoring, auditing, and compliance processes and procedures

› Utilize available resources• Prime Vendor Program for sub-ceiling 340B pricing, value-added

services and for technical assistance

340B Implementation

340B Prohibitions and Requirements

Duplicate Discounts

Diversion

Prohibitions

Duplicate DiscountAccessing the 340B discount AND Medicaid Rebate on the same drug

• Medicaid Exclusion File at: http://opanet.hrsa.gov/opa/CEMedicaidExtract.aspx• Medicaid Exclusion Tutorial at: http://www.hrsa.gov/opa/medicaidexclusion.htm• State policies

• Entities should contact their state Medicaid offices for state-specific requirements for using 340B with Medicaid patients.

Carve In(use 340B

with Medicaid)

Carve Out

(do not use 340B

with Medicaid)

Fed Regist. 2000;65(51):13983–4.

Duplicate Discount Prohibition

› Diversion occurs when:• A drug is provided to an individual who is not a

patient of that entity• Required to follow patient definition guidelines1

• A drug is dispensed in an area of a larger facility that is not eligible (e.g., an inpatient service, a non-covered clinic)

• Entities should enroll all eligible outpatient or satellite sites

1. Fed Regist.1996;61(207):55156–8.

Diversion Prohibition

GPO Prohibition

› GPO prohibition prohibits certain entities from purchasing any covered outpatient drugs through a GPO or other group-purchasing arrangement, even if items are available at a lower price through the GPO.

Hospitals can continue to purchase all products for inpatient operations through a GPO, even if their outpatient departments participate in 340B.

DSHs

PEDs

CANs

GPO ProhibitionOnly Applies to

The Orphan Drug Exclusion

› The Orphan Drug Product Designation Database can be found at:

› http://www.accessdata.fda.gov/scripts/opdlisting/oopd/index.cfm

› The orphan drug exclusion prohibits certain entities from purchasing orphan drugs at 340B discount prices.

RRCs

Orphan Drug Exclusion Only Applies to

CAHs

SCHs

CANs

FederalRegister Notice

Patient Definition

Contract Pharmacy

Outpatient Facilities

Audits and Dispute Resolution

Duplicate Discounts

http://www.hrsa.gov/opa/federalregister.htm

340B Guidance and Policy

Regulations (Proposed)

Civil Monetary Penalties

Dispute Regulation

340B Proposed Regulations

Patient Definition

Entity has established a relationship and maintains records of care

Patient must receive health-care services from health-care professional employed/contracted with entity, and entity must maintain responsibility for the care provided

Patient receives health care consistent with range of services from the covered entity (hospitals are exempt)

For eligibility, three components must always be considered regarding the individual and his/her associated prescription:

Fed Regist. 1996;61(207):55156–8.

Drug Delivery Contract Pharmacies

› 340B Program allows entities to have multiple contract pharmacies for increased patient access to cost-effective pharmaceuticals

› Covered entity purchases the drug, but “ship to/bill to” procedure may be used

› Covered entity retains legal title to all drugs purchased under 340B and must pay for all 340B drugs

›

Fed Regist. 2010;75(43):10272–9.

340B Usage Considerations

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Federal grantees• Scope of grant limitations

Hospital facilities• Integral part of the hospital• On most recently filed cost report

Program integrity assures stakeholders that the 340B Program’s intent is being met and that rules are being followed.

Access to services under the 340B Program is important because it ensures that entities and their patients have the means to fully utilize the program’s benefits.

The value that program participation brings to entities is essential for stretching scarce entity resources.

340B Program Resources

Integrity

Access

Value

Office of Pharmacy Affairs (OPA)

› Administrates over the 340B Drug-Pricing Program› Develops innovative pharmacy service models and

provides technical assistance to help entitiesimplement effective pharmacy programs

› Serves as a federal resource about pharmacy› Emphasizes the importance of comprehensive

pharmacy services functioning as integral part of primary health care

Integrity

Prime Vendor Program(PVP)

› Relationships and networking› Policy analysis› Educationo 340B University

› Technical assistanceo Apexus Answers Call centero 340B tools and resourceso www.340bpvp.com

Access

Prime Vendor Program (PVP)

› Negotiation ofo 340B sub-ceiling pricingo Discounts on value-added products, services, and supplies

› Overcharge recovery

› Pricing transparency

› Reports and tools

› Technical assistance

Value

340B Resource Information

https://www.340bpvp.com/

http://www.hrsa.gov/opa/

http://www.hrsa.gov/publichealth/clinical/patientsafety/index.html

ApexusAnswers@340bpvp.com

1-888-340-2787

Health Resources and Services Administration

340B Prime Vendor Program Managed by Apexus

Health Resources and Services AdministrationOffice of Pharmacy Affairs

340B Peer-to-Peer Program

Thank you for viewing this 340B tutorial developed by :

You can view additional 340B educational products and tools specifically developed to assist 340B-participating entities create and maintain processes to ensure 340B

program integrity at:

www.hrsa.gov/opa/peertopeer/