2015: Active Year Ahead

Only nonprofit healthcare organizations that provide services to low-income patients or provide services for certain disease states are eligible for the program, which include disproportionate share hospitals, children's hospitals, critical access and other rural hospitals, federally qualified health centers, and specialized centers serving HIV, family planning, hemophilia and STDs. These safety net entities are a cornerstone to the nation's healthcare safety net system, and their 340B discounts generate financial savings to help provide quality healthcare to tens of millions of vulnerable patients nationwide. Every day, millions of families may have to weigh the difficult choice of whether to purchase their medications or pay for food and other necessities. As healthcare entities continue to serve high volumes of low-income, uninsured and underinsured patients, 340B is more important than ever.

The 340B program has grown dramatically since 2010, when it was expanded to include children's and rural hospitals, and entities became able to partner with multiple contract pharmacies in the community to serve their patients. The program's rapid success, however, has created critics who say the program has grown beyond its intent and its regulations lack sufficient clarification and that without more oversight, it leaves significant latitude for multiple interpretations. The Health Resources and Services Administration (HRSA), the governmental oversight agency for 340B, and Congress are addressing these issues. 2015 is expected to be an active year for 340B.

HRSA was expected to release regulatory clarifications mid-2014, but recently announced plans to release comprehensive "340B Mega-Guidance" by July 2015, addressing the patient eligibility definition, facility and clinic registrations, the use of 340B for Managed Medicaid, and certain program sanctions. HRSA also is doubling down on its audit program - it is expected to conduct twice as many entity audits in 2015 as it did in previous years and will begin auditing participating manufacturers.

The new Republican-controlled Congress is conducting hearings to address the "program intent," and has called upon the Office of Inspector General (OIG) and General Accounting Office (GAO) to study whether entities are passing discounts to the uninsured, whether hospitals are using their 340B resources to improve low-income care, and whether 340B purchasing can benefit Medicare Parts B and D.

MedImpact and its 340B administrator subsidiary, SUNRx, supports HRSA's 340B program audit and oversight and looks forward to the much needed regulatory clarifications. SUNRx believes the program, when managed compliantly, does exactly what it was intended to do—securing the financial future of safety net organizations who continue to serve the nation's vulnerable population.

Entities, now more than ever, must ensure their program complies with the key prohibitions, such as diversion and duplicate discounting, and prohibitions related to GPO and orphan drug purchasing. To prevent diversion, 340B drugs may be used only for eligible patients (as loosely defined in the regulations), and 340B may not be used for Medicaid unless steps are taken to avoid manufacturer duplicate discounts (i.e., where a manufacturer pays both a 340B discount and a state rebate on the same prescription). Entities must have strict policies and procedures in place, utilize a sophisticated tracking system, provide active self-audit oversight, and maintain thorough documentation to ensure these prohibitions are met.

In addition, entities are encouraged to examine how they are meeting the program intent, such as offering 340B discounted prescriptions to the uninsured through in-house and contract pharmacies, and using 340B-generated resources to improve the medical outcome of their vulnerable patient population. 340B program resources can be used for such things as recruiting and employing needed providers, building clinics in low-income remote areas or staffing clinics with specialists, offering subsidies on discharge prescriptions, providing community outreach programs, updating medical equipment and facilities, and expanding pharmacy services to improve access to discounted medications.

The increased complexity of the 340B program along with strict compliance requirements and a changing regulatory environment have made it more difficult for entities to implement and manage a 340B program on their own.

MedImpact, in conjunction with SUNRx, helps eligible entities in more than 35 states to implement and manage their 340B programs, develop contract pharmacy networks, and comply with and remain abreast of applicable regulations. Together, MedImpact and SUNRx help eligible entities implement a comprehensive 340B program that maintains a detailed audit trail of every transaction, enabling entities to focus their attention on what they do best—treating more patients and improving care. MedImpact and SUNRx take seriously the responsibility — and opportunity — to support the entities' program's continued success and ongoing compliance.

Through its technological linkage to MedImpact, SUNRx is able to offer the industry's only "real-time" 340B cash discount card program for entities' uninsured. Last year alone, SUNRx's program generated more than $100 million in savings for its 340B covered entity clients and their uninsured patients.

For hospitals and health centers that have implemented a 340B program, SUNRx recommends you:

• Have a comprehensive team with assigned responsibilities to oversee your 340B program
• Implement strict compliance standards to ensure 340B drugs are used only for eligible patients
• Review your use of 340Bfor Medicaid to prevent duplicate discounts (SUNRx currently is developing a technological solution that will allow entities to use 340B Managed Medicaid, while avoiding duplicate discounts)
• Develop and implement a comprehensive self-audit of your 340B program
• Update your policies and procedures
• Update your HRSA website, ensuring your contact information is correct, and that your contract pharmacies and facilities are properly registered
• Review whether you are using 340B for your uninsured, and how 340B resources are used to benefit low-income patients in your community
• Keep abreast of the changing regulatory environment, and being ready and flexible to make needed changes

If you need help in these areas, or have not yet implemented a 340B program, call MedImpact or SUNRx to help.