Project Proposal to Establish Rural Hospital

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Project Proposal to Establish Rural Hospital Powered By Docstoc
					                      340B Contract Pharmacy

Lisa Scholz, PharmD, MBA
Senior Director, Health Resources and Services Administration
Pharmacy Services Support Center
June 17, 2010 Kansas City, MO NRHA Medication Use
        Considering the Contract
           Pharmacy Option
–   An overview.
–   Implementing 340B contract pharmacy.
–   More than one pharmacy?
–   Alternative Method Demonstration Projects.
–   Multiple Contract Pharmacy Final Guidelines
   1992: 340B Legislation--Contract Pharmacy not part of
    original legislation

   1996: Entities expressed need to contract with a
    separate pharmacy; Contract Pharmacy        Federal
    Register Notice finalized to provide guidance

   2007: Multiple contract pharmacy guidance
    notice; based on AMDPs received

   2010: Multiple contract pharmacy guidance finalized
Current Trends
     What The Guidelines Said
1. Entity purchases drug
2. Ship-to-bill-to
3. Pharmacy provides ALL services (one pharmacy per entity)
4. Freedom to choose
5. Contractor provides reports
6. No drug resell or transfer
7. Not for Medicaid
8. Subject to audits, copy of contract shared w/ drug manufacturer upon
9. Separate records for 340B
10.Medicare/Medicaid anti-kickback statute followed
11.Follow all other laws
12.Must submit self-certification form
  What The Guidelines Did NOT
1. Exactly what records should we keep?
2. How should the money be transferred?
3. How should we negotiate a dispensing fee for the pharmacy?
4. Is it OK to negotiate a fee based on percentage of drug
5. Can a contract pharmacy bill 3rd party on behalf of entities?
6. What does “an arrangement to prevent duplicate discounting”
   between Medicaid and the entity really mean?
7. Can I contract for some services and not others?
8. What constitutes an electronic inventory?
9. Must I use NDC-to-NDC replenishment?
10.What do we do with the inventory when we terminate a contract?
11.How should we deal with back-orders when we need to replenish?
  …and then there is more…
                In a nut shell…
– Covered entity desires to increase patient access to
  affordable medications.
– Entity contracts with pharmacies of choice.
– Entity purchases and owns the medications.
– The contract pharmacy provides professional,
  administrative, and clerical services.
– Detailed receiving/dispensing records.
– Diversion prevention tracking system.
                              Contract Pharmacy
Entity buys the drugs from
wholesaler                             Entity
Pharmacy places drug order
with wholesaler

Wholesaler ships drugs to
the pharmacy

Pharmacy dispense drugs to
                              Wholesaler    Pharmacy

Entity pays wholesaler

Entity/patient pay pharmacy
           Entity Considerations
   Patient Access, Unique population factors
   Program cost vs. revenue
   Sliding Fee Scale
   Formulary
   3rd Party Capture Rate
   Pharmacy providers: neighborhood vs. chain vs. DSH
   Entity administrative capacity, Vendors?
   “Comprehensive” Pharmacy Services or “patchwork”
    pharmacy services
   Negotiation for a “win-win” partnership
             Contract Pharmacy
   Patient traffic in store
   Program cost vs. revenue
   Understanding 340B compliance
   Record-keeping and reporting
   Supporting entity mission/philosophy re: Sliding Fee
    Scale, Formulary
   3rd Party and Medicaid
   Working with a vendor
   Negotiation for a “win-win” partnership
–   Contact PSSC for Contract Pharmacy Action Plan
–   Form a Pharmacy Project Team.
–   Review 340B Program requirements and prohibitions.
–   Establish Project mission and philosophy.
–   Complete 340B Program application.
–   Compile and review practice metrics.
–   Complete pharmacy needs assessment.
–   Evaluate potential contract pharmacies.
–   RFP if needed.
– Select a wholesaler.
– Sign Prime Vendor Program agreement.
– Develop an audit plan.
– Develop a formulary system.
– Establish Pharmacy & Therapeutics Committee.
– Develop a Policy and Procedures Manual.
– Utilize financial decision analysis tool to compare
– Choose pharmacy and negotiate contract.
– Submit contract pharmacy application online and mail in
  hard copies!
– Finalize and distribute formulary; involve contract
– Educate Staff.
– Educate Patients.
– Go Live!
– Monitor and evaluate.
– Expand your pharmacy services.
                    What if?
– What if we would like to have more than one contract
  pharmacy per site?
– What if we have an in-house pharmacy that we would like
  to supplement?
– What if I want to form a local network of 340B entities?
– What if…..?
          Alternative Method
         Demonstration Project
– HHS Secretary approved in June 2001.

– Goal is to demonstrate and evaluate new methods of
  accessing 340B drug discounts to serve greater numbers
  of indigent and uninsured people.

– Non-funded projects.

– No application deadlines/funding cycles.
   Demonstration Project
Statistics- Dec 2001-Dec 2009
                                   50 Alternative Method
                                   Demonstration Project

                                         7 currently
        37 approved                     under review                   6 not approved

28 Multiple contract pharmacy
                                7 multiple contract pharmacy   3 failed established criteria
8 Networks
                                                               3 voluntarily withdrawn
1 Voluntarily Withdrawn
          Alternative Method
         Demonstration Project
– Review the information at
– Review the description of approved Projects at
– Prepare and submit a proposal to OPA.
        Demonstration Project:
Proposal evaluation criteria:
– In depth description of why current methods are not
– Detailed description of method.
– Methods of evaluation.
– List of participating covered entities.
– Duration of project.
         Demonstration Project:
Proposal evaluation criteria:
– Detailed description of inventory control and dispensing.
– Compliance with 340B statutory and Program
– Drug Diversion.
  • Medicaid and the duplicate discount.
  • Auditing.
  • Patient eligibility.
        Demonstration Project:
Information needed for multiple contract
pharmacies and supplemental contract
– Contract pharmacy registration form (s) on file.
– 340B drugs will not be used for Medicaid prescriptions
  unless arrangement with State Medicaid Agency.
– Contractor provides customary reports.
– Third party billing procedures.
          Demonstration Project:
Information needed for network entities:
–   Description of pharmacy compensation and processes.
–   Type of inventory and description of inventory controls.
–   Why were the particular pharmacies chosen.
–   Description of procedures for handling discrepancies.
         Demonstration Project:
General information to consider:
– Do patients have freedom of pharmacy choice?
– Do all aspects of proposal meet Board of Pharmacy
– Include all contracts/agreements with parties involved.
– Does proposal violate Anti-kickback statute?
– Include a statement acknowledging that if approved, it is
  subject to audit by manufacturers and Healthcare Systems
        Contract Pharmacy
Federal Register Notice Publication
        Published March 5, 2010

 U.S. Department of Health and Human Services
 Health Resources and Services Administration
          Healthcare Systems Bureau
           Office of Pharmacy Affairs
 The Contract Pharmacy (CP) Federal
 Register Notice (FRN) was published by
 the Office of Pharmacy Affairs (OPA),
 which administers the 340B Drug Pricing
 program, on March 5, 2010 with an
 effective date of April 5, 2010. It replaces
 all previous 340B Program guidance
 addressing Contract Pharmacies.
 This FRN is the result of the successful pilot that
 was implemented in 2001 that allowed a single
 entity to have multiple contract pharmacies, or
 both an in-house pharmacy and one or more
 Contract Pharmacies under an Alternative
 Methods Demonstration Project (AMDP).
 This FRN permits a Covered Entity (CE) to
  purchase drugs for multiple contract
  pharmacies or in-house pharmacies.
The covered entity must continue to:
 Ensure against diversion
 Ensure against duplicate discounts
 Maintain readily auditable records
 Meet all other 340B requirements
         Covered Entity Basics
 A covered entity is a health center, clinic,
  health department, grant receiving
  or hospital that purchases drugs.

 A covered entity is not a pharmacy. A
  pharmacy is listed in the database either as:
  - shipping address for an in-house
  pharmacy location
  - a contract pharmacy.
         Covered Entity Basics
Covered entities will be given a unique 340B ID
number and
for each 340B ID, the OPA will permit each site:
One physical address
One billing address
Multiple shipping addresses
Multiple contract pharmacies
Multiple Medicaid/NPI numbers
           Covered Entity Updates
OPA strongly recommends covered entities
separately register all of their satellite sites (clinics,
health center sites, etc.) that will be using 340B

Patients of a covered entity may access 340B
drugs at any covered entity listed in-house
pharmacy or contract pharmacy.
     Considerations for Covered Entity
 Covered entities need to assess how they will
  purchase 340B drugs before requesting multiple
  shipping addresses or registering multiple contract
  pharmacies. Some considerations include:
  - Purchasing arrangements with one or more 340B
    IDs and wholesaler accounts
  - Billing arrangements
  - Shipping locations for in-house pharmacies
  - Contract pharmacies
  Considerations for Covered Entity
 If dispensing 340B drugs to Medicaid
  patients, covered entities must report all
  Medicaid/NPI numbers that are used in
  Medicaid Reimbursements, including those
  for contract pharmacies.
                Executing the FRN
 OPA will continue to accept forms for single
    contract pharmacies and multiple contract
    pharmacies (effective April 5th).
   Contract pharmacy registration process is also
    available on-line at
   Covered entities shall report to OPA all contract
    pharmacy arrangements that reflect their contracts
    between CE-CP locations by utilizing the Contract
    Pharmacy Registration form.
               Executing the FRN
 The OPA database will list the contract
    pharmacy arrangements between covered
    entities and their contract pharmacies.
   Purchasing 340B drugs will only be permitted
    if the CE-CP relationship is identified in the OPA
     Covered Entity Requirements
1.   The basic requirements for Covered
     Entity did not change. They will continue
     to purchase, maintain ownership, and
     assume all responsibility for their drugs.
       Covered Entity Requirements
2.   CEs may now pursue multiple contract
     pharmacy arrangements only if procedures
     and written agreements:
       - Are in place to meet all 340B requirements
       - Identify all CP locations that will be utilized
       - Specify the responsibilities of parties
         involved in providing comprehensive
         pharmacy services
          OPA Database
The database will be used to:
 Confirm the CE is eligible to purchase
  outpatient drugs under the 340B program
 Validate the CEs billing address
 Validate the CEs shipping addresses
 Collect Medicaid billing information
  to prevent duplicate discounts
   What does the Contract Pharmacy
          FRN mean for…
All stakeholders…
 Multiple CPs will increase patient access
  to the 340B drugs.
 CEs will no longer be limited to
  one CP per site.
 The OPA database will provide information
  to manufacturers for verification of the CEs
  eligibility to purchase 340B drugs and their
  shipping addresses.
       What does the CP FRN
            mean for…
Covered Entities must….
 Inform patient of freedom to choose their
  pharmacy provider
  - In order to receive 340B drugs, eligible
    patients of the CE must go to any in-house
    or contract pharmacy locations
 Provide to OPA a copy of their contract
  pharmacy service agreements upon request
 Recertify their CE and CP information upon
  OPA’s request
     What does the Contract Pharmacy
            FRN mean for…
Contract Pharmacies:
 Must adhere to all Federal, State and local laws
    and requirements
   Must provide the CE with reports consistent with
    customary business practices
   Must assure all 340B records will be accessible
    from pharmacy’s own operation and readily
    available for audits
Contract Pharmacies:
Remain subject to audits by outside parties
May provide other services to covered entity
or patients at option of covered entity
            Contract Pharmacy
The Contract Pharmacy must work with the
Covered Entity:
To establish and maintain a tracking system
suitable to prevent diversion
To develop a system to verify patient eligibility
Prevent duplicate discounts for Medicaid
   What does the Contract Pharmacy
          FRN mean for…
 Request from OPA a copy of a CEs CP service
 Request permission from OPA to
  perform audits on a CE site
 Use the dispute resolution process to resolve
  discrepancies or to request permission to
  perform audits
 Use the OPA database to validate CE information
  Contract Pharmacy Registration Form
Forms are available at:

Must submit Page 1:
The Contract Pharmacy Registration Form
- Form reflects contract relationship between
   Covered Entity site and Contract Pharmacy
 Contract Pharmacy Registration Form
 May submit Addendum A:
    Multiple sites of the CE
    - Addendum allows for multiple sites to be
      included with same CP relationship with
      CP listed on the main form
   May submit Addendum B:
    Multiple locations of a chain pharmacy
    - Addendum allows for multiple chain pharmacy
      locations to be included with same CP
      relationship with CE listed on main form
Contract Pharmacy Registration Form
OPA requires receipt of complete and signed
original CP registration forms prior to them being
added to the OPA database. Faxing will expedite
the process, but original documents must still be
  Contract Pharmacy Registration Form
1. Documents must be completely filled out, signed,
   and mailed in. Manually completed documents
   will require at least 15 business days for OPA to
   process after their receipt.
2. The on-line CP registration process will reduce
   the wait time to approximately 10 business days.
   Once the CE submits the documents on-line,
   they must still mail in the signed documents to
   OPA. OPA will approve the on-line submission
   upon receipt of the signed documents.
Contract Pharmacy Registration Form

   3. To add more than 20 CE-CP
     relationships, please request a data
     upload from OPA by e-mailing
                 Case Example
      This applies to the following 3 situations.
A Covered Entity (CE) has:
 5 clinic sites
 4 in-house pharmacies
OPA strongly recommends: The CE register its 5 clinic
sites that will use the 340B drugs.
 The CE should add their 4 in-house pharmacies as
  shipping addresses by using the change request
  forms available at:
                   Situation 1
   Central Purchasing & 1 Site with Multiple CPs
The covered entity (CE) wants central purchasing and
also wants the same site to enter into CP
arrangements with 3 independent pharmacies to
improve patient access.
The CE must first be registered with the CE
registration form and added to the OPA database.
CP Forms needed?
      The CE must submit: 3 CP registration forms
with the 340B ID of the CE site making purchases.
                 Situation 2
Multiple Purchasing & Single CP at Multiple Sites
The CE wants multiple purchasing with its
5 sites and also wants all sites to enter into CP
arrangements with 1 independent pharmacy
to improve patient access.
 All CE sites that will purchase 340B Drugs and
  enter into CP arrangements must be registered
  with a CE registration forms.
                 Situation 2
Multiple Purchasing & Single CP at Multiple Sites

CP Forms needed?
The CE must submit 1 CP Registration Form with
one of the 340B IDs of the CE sites making the
purchases. Also included should be a completed
Addendum A listing the 4 other 340B IDs making
purchases for the CP.
                   Situation 3
Multiple Purchasing & Multiple CPs for Multiple Sites
 The CE wants multiple purchasing with 5 sites and
 also wants all sites to enter into CP arrangements
 with 1 chain pharmacy that has 5 local sites to
 improve patient access.
  All CE sites that will purchase the 340B Drugs
   and enter into CP arrangements must be
   registered with CE registration forms.
                    Situation 3
Multiple Purchasing & Multiple CPs for Multiple Sites

CP Forms needed?
The CE must submit 1 CP Registration Form with
one of the 340B IDs on the main form +
Addendum A listing the other 340B IDs also
making purchases for the CP + Addendum B
listing all applicable information on the additional
chain pharmacy sites.
           Additional Information
 HRSA’s Pharmacy Services Support Center (PSSC)
          Free Technical Assistance to CE’s.
Contact the Call Center:
 1-800-628-6297
               Additional Information
340B Prime Vendor Program (PVP) participants
should update their profile with their additional CP
information. Go to the PVP website,
 Log on to the secured site
 Select <My Profile> to update your facilities’ information
  - Address changes
  - Verify Contract pharmacy additions
  - Staff changes
  - Verify wholesale/distributor changes
 For additional assistance with the PVP, call their Customer
  Service line at 1-888-340-BPVP (2787).
Thank You

Description: Project Proposal to Establish Rural Hospital document sample