Hot topics at this year’s 340B Coalition Winter Conference in San Diego included third-party reimbursement, audits and compliance and of course, the Medicare part B reimbursement cuts. Additionally, new bills affecting 340B have been introduced in recent weeks, and Sentry celebrated our new engagement with Oracle.
In November last year, Caremark, a PBM owned by CVS (now merged with Aetna), sent letters to on-site pharmacies at 340B entities across the country, announcing that drug price reimbursements for those 340B pharmacies would be significantly reduced. The reimbursement change indicated in those letters “would potentially deny pharmacies that contract with 340B providers rebates for drugs in the program, as it would not be considered a retail purchase,” according to an article in FierceHealthcare.
The letters informed pharmacies they would have until January 15, 2019 to decide whether to renew their contracts with Caremark at these reduced reimbursement rates or part ways.
340B entities responded at the time with shock and confusion, calling the cuts “discriminatory pricing” based on the fact that they were directed at 340B hospitals. Caremark later backpedaled, saying the letters went out to some pharmacies for which they were not intended and moving the contract renewal deadline from January 15 to April 1.
At the conference, 340B Health said during its corporate partner executive meeting that it was working to educate Caremark on the importance and intent of the 340B program and on how the change in reimbursement would impact hospitals’ ability to care for vulnerable populations.
Now FierceHealthcare reports that it spoke with a representative from Caremark who says those planned reimbursement changes have been “scrapped altogether.” CVS Caremark is “in the process of notifying pharmacies that would have been affected by the changes,” the spokesperson said.
Maureen Testoni, president and CEO of 340B Health, said in a statement, “This decision is a welcome change and our members appreciate the fact that CVS Caremark listened to their concerns and responded appropriately.”
Fewer diversion findings in audits
An always-popular topic at 340B Coalition is program compliance and audit readiness. This year at the pre-conference session, 340B Health president and CEO Maureen Testoni reported that, based on data from fiscal year 2017-2018, there were fewer audit database findings and fewer diversion findings.
This means that first, covered entities seemed to have more accurate, consistent information in their databases, with fewer inaccuracies in details like phone number, contact name, etc.
Additionally, 340B Health reported that there were fewer diversion findings in audits than in years past. Testoni believes that diversion finding trends related to potentially ineligible patients or locations have been reduced in large part because of increased use of e-prescribing and more effective location identification tied to that prescription data.
Sentry is pleased to offer our customers 340B compliance and management tools that help them identify and avoid audit concerns like these. Our eRx Eligibility Check module uses hospitals’ existing e-prescription data to tie prescriptions to the service location and capture 340B eligibility. eRx Eligibility Check helps hospitals reduce audit risks by connecting actual prescribing events to filled prescriptions, capture 340B eligibility for more unique situations, such as e-prescriptions written for specialty pharmacy, and identify and pinpoint specific e-prescriptions tied directly to eligible service locations.
New bills introduced at the state and national level
As we discussed previously, on January 10, Morgan Griffith (R-VA) introduced the “Megan Rondini Sexual Assault Victims Protection Act,” the first 340B-specific bill that would focus on covered entities’ ability to assist sexual assault victims, increasing the availability of sexual assault forensic exam (SAFE) services at those hospitals. The bill will be introduced through the House Energy and Commerce Committee and currently has two co-sponsors: Greg Walden (R-OR) and Buddy Carter (R-GA).
Additionally, on January 15, Senator Bill Cassidy (R – LA) introduced S. 131, the “Protect Medicaid Act.” Intended to “amend title XIX of the Social Security Act to prohibit Federal Medicaid funding for the administrative costs of providing health benefits to individuals who are unauthorized immigrants.” The bill calls for a study on 340B program utilization among unauthorized immigrants.
No further movement on either bill had been announced as of the time of this publication.
With more than 100 “freshman” members of Congress elected this past November and control of the House shifting to Democrats, it’s more important than ever for 340B entities to continue to speak out about the importance and impact of the program and reach out to their Congressional representatives. 2019 could be an important legislative year for 340B.
In addition to federal bills, another potential avenue for 340B protection can be found at the state level. In South Dakota, House Bill 1137 was introduced January 25. Its intention is to prohibit PBMs from “discriminating against a pharmacy participating in a health plan as an entity authorized to participate under section 340B of the Public Health Service Act … or any pharmacy under contract with such an entity to provide prescriptions.” States have engaged in years past in the best interest of 340B entities, and with the recent trend of economic diversion, more states may have to intervene to ensure the savings from 340B are utilized as intended.
CMS lawsuit remains in limbo
In January, a federal judge in Washington, DC, ruled that HHS’ reimbursement cuts to the 340B program exceeded the HHS secretary’s authority. However, the judge requested briefs with more information from both CMS and the AHA before a decision could be made on how to move forward, and in the meantime, the lower reimbursement rates remain in place. The 30-day deadline for providing those briefs has come and gone. Each side provided a brief. The hospital plaintiffs requested that HHS recalculate 2018 claims payments to the original claims rate of ASP plus 6 percent and provided a supplemental payment for those claims (the difference between ASP+6% and ASP-22.5%) plus interest. The government said that if the hospitals are entitled to any relief, the remedy would be for the court to remand the case back to HHS to determine, without any specific remedy in their brief except noting possible prospective increase in future payments to make up for past decreases. The government disagreed with the remedy recommended by the hospital plaintiffs siting concerns regarding payment neutrality. There is speculation that CMS will likely appeal the judge’s decision in the coming months. At the same time, hospitals have filed a motion for a permanent injunction covering the Medicare payment cuts for 2019 OPPS rule and requesting that the court require HHS to issue an interim final rule within 30 days, effective 30 days after issuance, to correct the 2019 rate for 340B hospitals to ASP plus 6 percent for the entire year.
Sentry continues to monitor the situation and to support the 340B entities in their efforts to continue serving their communities.
Sentry celebrates relationship with Oracle; raises money for charity
During this year’s conference, Sentry held an event for customers, prospects and other conference attendees to highlight our recent relationship with Oracle for the use of its Exadata Cloud at Customer solution. This engagement furthers our commitment to providing the highest level of data security to our customers. The Oracle event included learning stations, interactive activities and an evening of networking and reconnecting with friends and colleagues.
Sentry also made a generous donation to this year’s charity of focus at the conference, Father Joe’s Villages, a nonprofit that has been working for more than 65 years to combat homelessness in San Diego. For every attendee who stopped by the Sentry booth and scanned their badge, we donated $5. We also had an interactive Plinko game at our Oracle event, where Sentry donated whatever amount the Plinko chip landed on.
This year’s 340B Coalition Winter conference was the largest in history, with more than 1,770 attendees. These record numbers show that now more than ever the industry has the desire to learn, to educate, to collaborate and to keep the 340B program alive. Sentry will continue to support 340B entities every step of the way.