May was an exciting month for 340B discussions, first at the National Rural Health Association (NRHA) annual conference in New Orleans, followed by the World Congress Covered Entities 340B Summit in Philadelphia. Sentry Data Systems was pleased to be a part of those discussions, representing the hospital and health system clients it serves, who depend on the 340B program to help their patient populations.
Part 1: Rural health is the heart of America
Many people would be surprised to learn that rural America makes up 97% of the land area in the US, with one in five Americans living in rural communities, according to the US Census American Community Survey: 2011-2015. Rural health comes with its challenges—with access to care being a primary focus. This year, the National Rural Health Association hosted its annual conference in New Orleans, bringing in hundreds of hospitals to discuss rural health access challenges—ranging from provider shortages to prescription access to tackling the opioid crisis. The conference was also an opportunity to recognize high performers in the areas of quality, financial performance and leadership through the Rural Health Awards program.
Sentry Data Systems engaged with attendees at the conference in an interactive presentation on 340B regulations, policy and operations impacting rural hospitals in today’s landscape.
During the update on Washington from NRHA Government Affairs and Policy Vice President Maggie Elehway, she pointed out the complexities of rural hospital finances, noting that 40% of rural hospitals were operating at a loss in 2017, a number that has increased to 44% so far in 2018, with associated bad debt almost 50% higher than it was before the Affordable Care Act was signed. Though Elehway acknowledged that rural hospitals have been less impacted by 340B changes such as the recent changes to Medicare Part B, she advised attendees to remain vigilant and to continue to document the need for programs like 340B.
The Role of the Federal Office of Rural Health Policy
HRSA’s Federal Office of Rural Health Policy (FORHP) is a critical office that serves to provide research, policy and guidance to improve health inequity in rural America. During the conference, FORHP announced plans to award up to 75 grants—of up to $200,000 each for one year—to rural communities as part of a new Rural Communities Opioid Response planning initiative. The grant funds will be used “to develop plans to implement opioid use disorder prevention, treatment and recovery interventions designed to reduce opioid overdoses among rural populations,” according to the website. The initiative is “part of a three-year Rural Communities Opioid Response initiative by HRSA aimed at supporting treatment for and prevention of substance use disorder.”
Disparities in care
CMS’s January 1 proposed change to the 340B program threatens to amplify the rural hospital closure crisis. According to the NRHA, “Since 2010, eighty rural hospitals have closed. Not surprisingly, 65% of these closed hospitals are PPS, the group of hospitals directly threatened by the proposed change in the 340B program. At the same time, a third of all remaining rural hospitals are vulnerable to closure, according to Chartis iVantage Health Analytics. Many of these vulnerable hospitals participate in the 340B program.
Engagement will be key for hospitals as they navigate these changes, especially in light of the White House administration’s recent Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs, released May 11, which questions the intent of the 340B program, among other drug supply chain components.
Sentry Data Systems supports the work of rural communities and will continue to provide solutions that promote integrity and compliance while ensuring that the value of the 340B program is optimized; whether through utilizing local contracted pharmacies or through internal inventory management of multiple inventories.
Part 2: Covered entities come together
On May 15, Sentry headed to the third annual World Congress Covered Entities’ 340B Summit in Philadelphia.
This venue gathers a small group of stakeholders, from covered entities and manufacturers to the various partners that support operationalizing 340B—including contract pharmacies, consultants, inventory management solutions like Sentry Data Systems and advocates. This day-and-a-half program allows these stakeholders to engage in small group discussions, network and drill down into specific questions related to 340B. Sentry was pleased to be an executive sponsor at this year’s event and to provide a presentation: Use of Data to efficiently and effectively manage your 340B Program.
Stakeholders come together
While it’s no surprise that stakeholders do not agree on all aspects of the current 340B debates, this event proved that conversations can help foster deeper understanding and collaboration. The fact is that manufacturers provide much-needed medications to covered entities serving patients in need with limitations in resources; the question that has everyone at odds is whether the 340B program’s intent is being met.
Covered entities, including hospitals, health centers and Ryan White clinics, used the opportunity to point out clear examples of how they utilize 340B program savings to support providing comprehensive care—from the purchase of much-needed MRI machines to prescription assistance to dental care that might not otherwise be provided. As they consider how to use the savings, covered entities noted that they look at the patient holistically, considering all the patients’ needs. On the other hand, the pharma manufacturer representative present at the event said he believed that the drug industry could better use the funds from 340B savings by pouring it back into R&D on the pharma side, focusing on orphan drug and rare disease research. Certainly, both approaches have merit.
A true disconnect exists between what both sides think should be done with the savings and this illustrates a possible misalignment of program goals. One question is at the center of the debate: Is the 340B program a patient assistance program or covered-entity assistance program? Covered entities would argue that the program was designed to help them “stretch scarce resources to provide more comprehensive services,” as noted by Congress in 1992. This is a direct benefit to the covered entity, which indirectly benefits the patients served by those safety net providers. We do know that when Congress set out to establish the 340B Program, drug prices were skyrocketing—much like we see today. The need for 340B in those institutions that qualify is as evident today as it was in 1992.
Care model innovation, audits and advocacy
There were several other highlights of the conference as well, including the following:
- Models of care: Healthcare attorney William von Oehsen, of law firm Powers Pyles Sutter & Verville, discussed the integration of 340B and value-based purchasing. The notion of moving from traditional fee-for-service to managed care models has led to more at-risk contracting tied to outcomes. Oehsen noted that many barriers exist in the state and federal laws on the calculation of statutorily fixed rebates, anti-kickback statute and closed formularies. Through collaboration with the state, managed care organizations, drug manufacturers and covered entities, value-based purchasing models will become viable options. Covered entities will need to be able to provide data on utilization and patient outcomes and understand shared-savings models through centers of excellence.
- Audit readiness: Entities discussed their approaches to mock audits, managing Medicaid, managing data and documentation of policies and procedures. The key principles of compliance discussed were patient eligibility to prevent diversion, avoiding duplicate discounts to Medicaid and GPO and orphan drug prohibition for certain entities. Sentry presented on the importance of data and how to ensure that the covered entity governs data from feeds, delivery, validation, ingestion and maintenance to ensure an integrated audit trail. Key takeaways included the importance of entities having a technology check with their steering committee annually, incorporating a review of their configurations to their policies and procedures and managing the relationship with their technology vendor, including annual check-ups.
- 340B advocacy: The conference ended with a message from Sue Veer, President and CEO of Carolina Health Centers, Inc., on the critical role covered entities play in protecting the value of the 340B program. She shared tips for talking with congressional members, including how to create a storyboard on why 340B savings are important to the covered entity, with examples for the audience to review. Additionally, Sentry provided tips on delivering a two-minute elevator speech on the current program environment to executives.
One thing is certain, there are passionate healthcare providers managing 340B programs across the country with the intent to provide the best possible outcomes for the patients they serve. 340B providers continue to collaborate, sharing best practices to ensure the 340B program is managed with the highest level of integrity. Sentry Data Systems will continue working closely with covered entities to ensure the highest quality of data integrity, compliance and innovation as healthcare continues to evolve.