HRSA Takes Step to Improve 340B Pricing Consistency

Your 340B Report for Tuesday June 16, 2020

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A note from 340B Report CEO and Publisher Ted Slafsky: I encourage all of you to read Trellis Rx Chief Pharmacy Officer Jerry Buller’s great article in today’s issue about how 340B health systems can leverage specialty pharmacy to improve patient care during the COVID-19 public health emergency. The opportunity to publish sponsored content is one of the main benefits of becoming a 340B Report sponsor. Click on the button below or reach me at ted.slafsky@340BReport.com to learn more about becoming a sponsor.

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From now on, HRSA is posting 340B ceiling prices on its secure website 15 days before a calendar quarter begins to give manufacturers “time to ensure 340B ceiling price notifications for wholesale partners are consistent” with the prices HRSA posts. | (Source: Shutterstock)

HRSA Takes Step to Improve 340B Pricing Consistency

The U.S. Health Resources and Services Administration (HRSA) yesterday published 340B ceiling prices for the coming calendar quarter 15 days early “to give manufacturers time to ensure 340B ceiling price notifications for wholesale partners are consistent with the 340B ceiling prices published” in HRSA’s 340B ceiling price database, it said. HRSA announced the move in an email to subscribers to its 340B email notification system.

The password-protected drug price database, formally known as the 340B OPAIS Pricing Component, has been available to providers enrolled in 340B since January 2019. Congress ordered its creation in 2010, but it experienced numerous delays before going live nine years later. Until the database opened, providers had to depend on various wholesaler price lists to get a sense of whether the prices they were being charged exceeded statutory ceilings. 

HRSA told 340B Report that, moving forward, it “will continue to make efforts to publish 340B ceiling prices 15 days prior to the start of the quarter.” HRSA gave this explanation for the change:

Currently, the 340B OPAIS pricing component publishes a static quarterly 340B ceiling price. Once the manufacturer upload window is closed, HRSA uses the information provided to publish the 340B ceiling price at the beginning of the effective quarter. That published price will remain posted in 340B OPAIS. HRSA understands that manufacturers may restate pricing factors to CMS [the Centers for Medicare & Medicaid Services] at any time, and those restatements may alter the 340B ceiling price. HRSA receives a quarterly correction file from CMS to use as a reference should a dispute arise regarding a 340B ceiling price that may have changed since the original reporting to 340B OPAIS. The static nature of 340B OPAIS may therefore publish a ceiling price lower than what a manufacturer charges, if a restatement occurs that adjusts the ceiling price higher than the published value. Overcharge complaints from covered entities are evaluated on a case-by-case basis, taking in to account the quarterly correction file for updated AMP [average manufacturer price] and URA [unit rebate amount] values.

If a covered entity suspects they were overcharged, HRSA encourages the entity to work with the manufacturer to resolve the issue in good faith. If after contacting the manufacturer, an entity still feels they were charged more than the 340B ceiling price, they may report concerns of overcharging to HRSA by submitting a price unavailable form. HRSA will investigate the allegation and work with the affected parties to resolve the issue.

Drug manufacturers can restate their drug average manufacturer prices (AMP) and best prices (BP) within three years of their original statement to account for late-arriving data or errors, or to true-up estimated prices for new drugs. When AMP and/or BP restatements reveal that 340B covered entities were overcharged, manufacturers must offer entities refunds. Manufacturers often voluntarily announce on a page on HRSA’s website that refunds for 340B overcharges are available, but according to HRSA they are not required to do so.

Manufacturers’ rights and obligations when AMP and BP restatements show covered entities underpaid for 340B purchased drugs are less clear. Some recent manufacturers notices to covered entities about the availability of 340B refunds for overcharges posted on the HRSA website have included language to the effect that the manufacturer will not offset payments for overcharges by amounts that entities were undercharged. The inclusions might suggest that the manufacturers generally reserve the right to seek such offsets. HRSA declined to address whether covered entities could be held liable for 340B undercharges in its 2017 340B ceiling price and manufacturer civil monetary penalties final rule, saying in the rule’s preamble it viewed “the likelihood of undercharges to be low.” It also pointed out in the final rule’s preamble that the 340B statute “is specific in addressing when a manufacturer overcharges a covered entity and it does not address refunds by covered entities if the manufacturer provides a price below the 340B ceiling price.”


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Specialty Pharmacy: Sustaining Patient Engagement and 340B Savings During COVID-19

Jerry Buller, Chief Pharmacy Officer at Trellis Rx

340B health systems that have created specialty pharmacy services continue to provide high-touch, personalized support to their patients and generate 340B savings even in the midst of the COVID-19 pandemic.

Embedded pharmacists and liaisons excel at maintaining patient engagement remotely based on their long-standing patient relationships. Though specialty pharmacy teams cannot see patients in the clinic right now, they can still conduct clinical assessments, provide clinical input, coordinate refills, secure financial assistance, provide counseling, and ensure medication adherence.

As an integrated part of the care team, with access to the EHR, these clinicians can also coordinate with health system physicians to ensure continuity of patient therapy and treatment even through this unforeseen disruption.

Enhancing Patient Care & Outcomes During the COVID-19 Pandemic

There are significant benefits of offering embedded specialty pharmacy service during this crisis says Brandon Hardin, Clinical Services Manager at Trellis Rx. “A health system’s specialty pharmacy team ensures continuity of care. In addition to addressing patients’ concerns about COVID-19, clinical pharmacists can help navigate drug access challenges.”

Hardin shared recommendations on how health system specialty pharmacy teams can support patients and providers in a recent article. One suggestion: “take responsibility for sharing patient care guidelines published by medical associations, such as the American College of Rheumatology.”

Brandon Newman, Vice President of Clinical Affairs at Trellis Rx, identified the ability to monitor if patients are responding to their therapy regimen as another benefit of offering specialty pharmacy services. “Clinical pharmacists can collect patient-reported outcomes measures over the phone using tools like the RAPID-3 assessment for rheumatoid arthritis,” he explained. “This data indicates if a patient’s condition is under control and allows the care team to quickly intervene if it isn’t.” Newman discussed measuring disease-specific outcomes in a recent article and addressed the topic during a recent webinar.

A Much-Needed Revenue Source for Health Systems

340B covered entities that have an on-site specialty pharmacy service also face less financial uncertainty as they navigate the impact of the COVID-19 pandemic. Health systems throughout the nation face significant budget shortfalls due to postponed elective procedures and temporary closures of specialty practices, but those with an established specialty pharmacy can rely on its revenue stream.

I asked Stuart Deal, who leads the Summa Health Specialty Pharmacy in Akron, Ohio, to elaborate. He shared: “As a specialty pharmacy service sustains patient engagement through this period, the resulting financial savings will also support the mission even as other areas of the health system suffer temporary setbacks. It’s a win-win for the community, patients, and the health system.”

Is Now the Right Time to Start a Specialty Pharmacy?

The COVID-19 pandemic underscores strategic reasons 340B health systems should offer specialty pharmacy services: to enhance patient care, improve clinical outcomes, and boost financial results.

As such, the pandemic provides an excellent opportunity to gain support for starting or enhancing a health system specialty pharmacy service. Pharmacy leaders can learn about key factors required to successfully launch a program at their organization by watching a Trellis Rx webinar on the topic or by contacting Trellis Rx. They can also utilize a third party such as Trellis Rx to review their current specialty pharmacy program, evaluate its effectiveness and determine whether there is an opportunity for growth.  Trellis Rx conducts these analyses free of charge.


Momentum on Preventing 340B Discriminatory Reimbursement Slows Down

During the past two years, 340B covered entities have celebrated passage of laws in eight states prohibiting discriminatory reimbursement against them by pharmacy benefit managers (PBMs). However, there are signs the momentum might be fading.

Last week, a Tennessee Senate committee ended further consideration this session of a bill to stop PBMs from reducing reimbursement for 340B-purchased drugs. Now, there are reports that similar companion bills in the Ohio House and Senate have stalled, at least temporarily.

The bipartisan legislation in Ohio would stop health plans, Medicaid MCOs, and their PBMs from imposing extra fees on or reducing drug reimbursement for 340B entities. Reimbursement could not be lower than National Average Drug Acquisition Cost (or wholesale acquisition cost if NADAC is unavailable), and payers could not impose fees on 340B entities that are not imposed on other providers or that are higher than those imposed on others.

The Ohio House Health Committee held a first reading of its chamber’s version, H.B. 482, on Feb. 13. The Ohio Senate Finance Committee held a Feb. 25 hearing on its version, S.B. 263. But there has been no movement since. State lawmakers reportedly have asked the Ohio Legislative Services Commission for a report on the legislation’s fiscal impact. Gov. Mike DeWine (R), meanwhile, reportedly has expressed concerns about how the legislation would affect projected state savings from a budget bill he signed last year requiring the state Medicaid director to set in motion the selection of a single state PBM to administer Medicaid pharmacy benefits.


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340B Duplicate Discount Contractor Gets Huge Venture Capital Infusion

Kalderos, a company that helps drug manufacturers investigate and recover duplicate 340B drug discounts and Medicaid rebates on the same products, has secured almost $30 million in venture capital for expansion.

In a news release yesterday, Kalderos said it will use part of the money to add a point-of-sale component to its 340B claims verification software platform, “effectively preventing noncompliant drug discounts from happening in the first place.”

Company CEO and co-founder Jeremy Docken said in the release that Kalderos’ original software “has identified more than $100 million in noncompliant drug discounts.” The company unveiled a software update in April. The news site VentureBeat reports that the company works with 10 drug manufacturers.

Some covered entities contacted by Kalderos have complained about the volume of 340B claims the company has asked them to verify, the look-back period for such claims, and frequency of requests for verifications. Kalderos has said the 340B program’s complexity makes compliance hard for all parties, and that its goal is to “provide clarity and remove barriers to achieving compliance, so everyone from manufacturers to covered entities can focus on patients.”

340B Prime Vendor Held Up as Model for a National Health Care Supply Chain Czar

Life-threatening medical supply shortages during the COVID-19 pandemic point to the need for “appointment of a national healthcare supply chain czar,” a former top executive at group purchasing organization Vizient writes in a recent op-ed for the news site SupplyChainDive.

Given President Trump’s “preference for private sector solutions, the government could hire a subcontractor to fulfill the role,” says Jody Hatcher, Vizient’s former president of supply chain services. One model, he says, is the 340B prime vendor program. Apexus, a Vizient subsidiary, has served as the government-contracted 340B prime vendor since 2003.

Hatcher says a hired supply-chain czar could bring about:

Visibility into channels with open communications between suppliers, distributors, and customers so hospitals can order product understanding how much is available, preventing under-ordering and hoarding.

Better inventory visibility by hospitals along with more accurate demand forecasts, faster order placement, and greater collaboration with their suppliers and distributors.

Broader use of analytics supported by real-time data to forecast supply bottlenecks and proactively prevent shortages of supplies, equipment and personnel.

Online communities enabling hospital clinical engineering teams to share insights and best practices with their peers in other hospitals.

“Nothing would move the industry faster” toward such goals “than a private-sector coordinator appointed and authorized by the federal government to coordinate among all supply chain stakeholders,” Hatcher said.

Bipartisan Push in Congress to Make Medicare Telehealth Waivers Permanent

Bipartisan legislation has been introduced in the U.S. House to “codify Medicare reimbursement for community health centers and rural health clinics for telehealth services,” its sponsors say.

Legislation signed by President Trump in early March let U.S. Heath and Human Services (HHS) Secretary Alex Azar waive limits on where Medicare patients are eligible for telehealth services during the COVID-19 public health emergency. Reps. Glenn Thompson (R-Pa.) and G.K. Butterfield’s (D-N.C.) HEALTH Act would make the changes permanent.

“Telehealth has emerged as a vital tool for health centers during the COVID-19 pandemic, connecting patients to services when restrictions prevented routine and ongoing care,” said Steve Carey, Chief Strategy Officer of the National Association of Community Health Centers (NACHC). “We are incredibly grateful for the leadership of Representatives G.T. Thompson and G.K. Butterfield to ensure that health centers are able to continue utilizing telehealth services and to be reimbursed adequately for doing so, both during and post the time of this pandemic. This enables health centers to continue to meet the needs of the nation’s underserved in times of emergency and for the future.”

In the U.S. Senate, a bipartisan group of 30 senators yesterday called for the expansion of access to telehealth services during the COVID-19 pandemic to be made permanent.

“Americans have benefited significantly from this expansion of telehealth and have come to rely on its availability,” the senators wrote in a letter to Senator Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.). “Congress should expand access to telehealth services on a permanent basis so that telehealth remains an option for all Medicare beneficiaries both now and after the pandemic. Doing so would assure patients that their care will not be interrupted when the pandemic ends. It would also provide certainty to health care providers that the costs to prepare for and use telehealth would be a sound long-term investment.”

The U.S. Health Resources and Services Administration recently confirmed that its recent relaxations of 340B program requirements regarding use of 340B drugs telehealth are not just for the duration of the public health emergency but permanent.

Senate Finance Leaders Want Public Database of COVID-19 Health Care Relief

The U.S. Senate Finance chair and ranking Democrat want U.S. Health and Human Services (HHS) Alex Azar “to create a comprehensive public database of funds distributed from the CARES Act to health care providers in the effort to fight the COVID-19 pandemic.”

Sens. Chuck Grassley (R-Iowa) and Ron Wyden’s (D-Ore.) June 11 letter comes amid articles by The New York Times and others questioning whether large health systems, some with hospitals enrolled in 340B, need federal pandemic relief.

“We urge you to expeditiously establish a single, comprehensive and publicly available data source that easily shows the amount of funding received by each provider,” the senators wrote. They also asked Azar to release information collected from the CARES Act Provider Relief Fund

requirement that providers getting more than $150,000 in general distributions “must submit reports on the receipt and use of these funds.”

“The scope, timing, and availability of this information is key to an even broader understanding of the effect of Congress’ response,” Grassley and Wyden wrote.

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