340B Audit Experience

Todd Karpinski, PharmD, MS, FASHPChief Pharmacy Officer

Froedtert & Medical College of Wisconsin

Objectives• Outline the preparatory process for the 340B HRSA

audit• Discuss the two day, on-site visit:

– Areas of focus – Discussion points during the audit process– Issues identified during the audit– Recommendations from the auditors

• Provide “tips” and “lessons learned” from the overall audit process

Froedtert Hospital• 550 bed academic medical center • 24,000 annual admissions• >140,000 patient days• Disproportionate share hospital

– 17.25% (FY2012)• Affiliated with Medical College of Wisconsin• Only Level I trauma center in Southeastern Wisconsin• Major referral center: 40 specialties and subspecialties• >220 Pharmacy FTE’s

• Administration, Pharmacists, Technicians, EPIC® team

How do we support the intent of the 340B program? Froedtert Hospital’s community benefit framework is to improve the quality of life in the communities we serve through health care programs and services that are measureable, accessible and culturally appropriate; recognizing the greatest impact is in Milwaukee’s underserved, urban population.

The Setting:• U.S. 2010 Census: Milwaukee is #4 in poverty among the nation’s cities• In Milwaukee County, 30% are on Medicaid and 15% are uninsured

Our Investments in 2011:• $34 million uncompensated care• $41 million in government shortfalls • Over 10,000 patient accounts adjusted for charity care• $400,000 annual support to FQHC’s and a $2 million pledge for capital support• Over $58 million in health professions education, including college and high school

scholarships / internships for underrepresented students

Community Benefit from Pharmacy

• Charity Care • Medication Management Home Delivery• Diabetes Smart Start Program• Medication Collection Program• Sharps Collection Program• Medication Repository• Discharge Program (implemented 9/2011)• Ambulatory Care pharmacists • Blood pressure cuffs (Newly Transplanted Patients)

Froedtert Hospital 340BTimeline

1995Enrollment in 340B

2011Expansion of Infusion

2012Expansion of Ambulatory Clinics

Contract Pharmacy

1999Expansion in Outpatient Pharmacy

2008Cancer Center Growth

AUDIT

Contract Pharmacy - Background

• On September 5th, 2010, HRSA published new guidelines stating covered entities would no longer be limited to the number of contract pharmacies.

• Entities partner with outside pharmacies to connect qualifying patients with 340B medications– Identification via shared patient and provider data – Inventory via "Bill To - Ship To” wholesale arrangements

• Entity-Contract Pharmacy relationship types :– Direct Contracting with Pharmacy– Contracting through 340B vendor with Pharmacy

Contract Pharmacy - Reinvest

• Inventory compliance technician• Patient assistance programs• Indigent care fund• Ambulatory care pharmacists dedicated to

transitions of care

Notification of the Audit

• June 18th , 2012 - Receive HRSA audit notification via email– Assess compliance of the covered

entity 1. Is eligible to participate in the 340B

Program2. Has sold or provided 340B covered

drugs to persons who are not eligible patients

3. Has the proper controls in place to prevent and detect instances of diversion and duplicate discounts.

– HRSA audit will include (at a minimum)

1. Review of the facility’s policies, procedures and processes that pertain to 340B medications

2. Verification of internal controls in place to prevent diversion and duplicate discounts;

3. Testing, on a sample basis, transactions that pertain to 340B medications.

What did we do to prepare?• Formed Froedtert Hospital 340B Team:

– Legal– Corporate Compliance– Finance Leadership – Pharmacy Leadership

• Scheduled weekly meetings within pharmacy• Reached out to other colleagues/organizations

– SNPHA– Other 340B audited institutions– Wholesaler partner– Apexus

What did we do to prepare?

1. Apexus Self-Assessment Gap Analysis

What did we do to prepare?

2. Identified “Gaps” and divided workload• Created stoplight report to establish deadlines and

track progress

Data Request• Eight unique data elements were requested

1. Policies and procedures • Purchasing, Ordering, Invoice Processing, Inventory, 340B replenishment, Medicaid billing, contract

pharmacy2. Froedtert Hospital’s Medicare Cost Report3. 340B Drug Orders or Prescriptions Report of all 340B orders/prescriptions issued between

1/1/12 and 6/30/12 • Unique identifying number, drug name, acquisition price, quantity, patient id, payer, and provider

4. Contact with the State Medicaid Prescription Drug Program 5. Listing of providers eligible to write 340B prescriptions6. Current 340B pharmaceutical inventory listing including the most recent physical inventory

count and reconciliation7. Report of all 340B drug purchase orders made between January 1, 2012 and June 30, 2012,

including price paid 8. Listing of contract pharmacies utilized, and the current contracts

• Submitted data within one week of receiving the request

The Audit - Day 1• Kick-off meeting

– Attendees: Pharmacy, Legal, Corporate Compliance, Finance

– Overview of Froedtert Hospital– Review of the audit visit

• Tour of Pharmacies– Outpatient pharmacies– Day Hospital

• 65 orders randomly selected for on-site review

– 5 orders from high cost medications– 10 orders from contract pharmacies– 20 orders from outpatient pharmacies– 30 orders from HOD areas

• Accumulators• Purchasing via Rx Works

The Audit – Day 1 • Retail/Contract Pharmacy Orders (30 total)

– Reviewed specific data fields for each order:• Patient eligibility via electronic system? (Epic)

– Date of the prescription match the visit date?– Patient have multiple visits?

• Provider eligibility?– Reference to the Provider list

The Audit – Day 2HOD Orders (35 total)

The Audit – Day 2

• Contract Pharmacy questions• Central Pharmacy Tour• Duplicate Discounts – Medicaid• Policy / Procedure Review• Provider Eligibility• Outstanding Items

Days After the Visit

Final Report from HRSA

How do we Maintain Compliance???

• In FY2012, one FTE technician was approved to maintain 340B compliance by conducting internal audits– Responsibilities include:

• Conduct quarterly audits of contract pharmacies • Evaluate and implement cost savings opportunities• Coordinate purchasing for split inventory within internal

pharmacies• Conduct self-audits of 340B pharmacy operations on a

quarterly basis

How do we Maintain Compliance???

• Audit 1: Compliance Validation– Confirm presence of all covered entities and accuracy

of information; verify contact information including phone and email information, Medicaid exclusion information and ship to / bill to information. This must include signoff by finance and legal.

– Completed annually

How do we Maintain Compliance???

• Audit 2: Prescription Eligibility Review – Review 15 of the most expensive and 10 of the least

expensive (penny priced) dispenses within each of the 340B eligible outpatient pharmacies. Review will consist of verifying patient eligibility and provider eligibility. Any variances are corrected and documented on the 340B audit report

– Completed daily

How do we Maintain Compliance???

• Audit 3: Physician Data Base Maintenance– Perform a monthly assessment of the accuracy of the

prescriber database to ensure proper designation. Any variances are corrected and documented on the 340B Audit Report.

• Audit 4: Accumulated Against Purchased (5 drugs)– Verify that the correct quantity is purchased on the 340B

accounts based on the quantity that was processed in the accumulator.

– Completed monthly

How do we Maintain Compliance???

• Audit 5: Purchasing Volume Analysis– Purchasing volume for each account is reviewed to

ensure purchases have been made on the correct account. Significant changes in purchase volume are reviewed for appropriateness. Any variance are corrected, using credit and rebill if necessary, and documented on the 340B Audit Report.

– Monitor WAC / GPO / 340b spend

How do we Maintain Compliance???

• Audit 6: HOD Mixed Use – ED patients Admitted vs. Not Admitted

– Review 25 patients from mixed use areas which the splitting software for 340B drug purchase. Check status to ensure patient status was Outpatient and eligible for 340B purchase. Any variances are corrected and documented on the 340B Audit Report.

– Completed monthly

How do we Maintain Compliance???

• Audit 7: Accumulator vs. Expected– Verify accuracy of NDCs in the accumulator.

Compare accumulator expected purchases, actual purchases, wholesaler purchases, and proper account ordering.

– Complete monthly

How do we Maintain Compliance with Contract Pharmacy???

• Audit 1: Patient Eligibility – From the vendor’s report, choose 20 patients to audit. Select patients

who are filling the prescription for the first time. Select patients that have multiple first fills prescriptions written by different prescribers. Verify each patient in EPIC to ensure visit was completed by an eligible provider.

– Completed daily

• Audit 2: Hardcopy Prescription Request– Request 20 prescription hardcopies from vendor. Verify patient and

provider eligibility. Verify that dispenses were accumulated appropriately.– Completed monthly

How do we Maintain Compliance with Contract Pharmacy???

• Audit 3: Vendor Prescriber Audit– Evaluate each provider used to dispense 340B eligible prescriptions

for inclusion on eligible provider list. Eligibility is based on NPI number.

– Updated provider eligibility list is sent each month– Completed monthly

Hot button 340B issues

• GPO exclusion• Continued Audit preparedness• Employee prescriptions• Contract pharmacy

Lessons Learned

• Understand! – Work with national organizations– Network with other covered entities– Utilize internal resources

• Be proactive!– Review and understand Polices & Procedures– Review audit process with key stakeholders

• Stay engaged!– Continue to measure and test compliance

Questions?