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September 16, 2016

Covered Entity Readiness: What’s “Around the Corner” for 340B

– By Jamila Seibel, PharmD, Consultant
As a friendly reminder, several major developments in the 340B world that are currently taking place and should be closely monitored by all 340B stakeholders are outlined below. As always, please feel free to reach out to one of our consultants to discuss the potential implications the following items may have on your organization.

Omnibus 340B "Mega Guidance":

According to reports based on an entry on the OMB Website, it is believed that HRSA submitted the final guidance on September 1, 2016. Many anticipate the final Mega Guidance to be released in December of 2016, but the exact timing has not been confirmed as additional factors, such as the Presidential election, may also delay the final release to early 2017. Significant changes to current 340B guidance relating to the patient definition, Medicaid managed care 340B treatment, qualification of inpatient discharged prescriptions, and program record keeping and maintenance were proposed in the original “Mega Guidance” release for comment.

Covered Outpatient Drug Final Rule:

The long-awaited Covered Outpatient Drug final rule, also known as the “AMP Rule” was recently released by CMS. This regulatory guidance focuses on aspects of the Medicaid Drug Rebate Program, including the definition of Average Manufacturer Price (AMP), definition of a “covered outpatient drug”, and setting actual acquisition cost (AAC) as the basis for state Medicaid reimbursement. The calculation of AMP directly affects 340B ceiling price, so there is expected to be an impact on the 340B program. Additionally, covered entities will need to stay up to date on state-specific policies regarding Medicaid managed care; the AMP rule requires that all states implement policies addressing Medicaid managed care organizations and the treatment of 340B, which has historically been an area of considerable confusion.

Bipartisan Budget Act Section 603:

Section 603 was not intended to affect the 340B program, however, requirements of the new regulation mandate that payments to any off-campus provider-based hospital departments are “site-neutral”, and therefore will not be reimbursed under the Medicare Outpatient Prospective Payment System (OPPS). It is unclear how these locations will be reported on the Medicare Cost Report. 340B child site eligibility of offsite clinics and services is dependent on cost report location; there is considerable concern as to whether these services will continue to meet HRSA’s child site registration criteria following implementation of Section 603.

Realignment of Audit Function:

It was announced at the 340B Coalition Summer Conference that the responsibility of 340B audits will be moved to the Office of Pharmacy Affairs in 2017. Captain Krista Pedley, Director of the OPA, assured attendees that there would not be any “changes on the ground” with regard to audit operations. Alinea has heard speculation that audits under the OPA will likely be performed by contracted individuals rather than government employees, however this has not been confirmed. In addition, no information pertaining to auditor training and education has been released.