340b business plan

Overview of the B Drug Pricing Program Background To understand the genesis of the B drug pricing program B programone must begin in when Congress created the Medicaid rebate program to lower the cost of pharmaceuticals reimbursed by state Medicaid agencies.

340b business plan

It required pharmaceutical manufacturers to provide rebates for medication purchases, based on sales to Medicaid beneficiaries, as a condition of having their products covered by Medicaid.

According to a detailed study of the most widely used outpatient drugs at five public hospitals, 340b business plan costs for the previously discounted drugs increased, on average, by 32 percent, far in excess of the historical 5 to 9 percent annual increases in drug prices experienced by public hospitals.

The steep rise reflected the size of the discounts previously offered, and the dramatic shift once "best prices" were imposed in place of voluntary discounts. Previously, hospitals had to register only those sites at separate addresses that received direct shipments of B drugs.

OPA is charged with designing and implementing necessary policies and procedures to enforce agency objectives and assess program risk. There are also ten categories of non-hospital covered entities that are eligible based on receiving federal funding. Once enrolled, covered entities are assigned a B identification number that vendors must verify before allowing an organization to purchase discounted drugs.

Failure to recertify will result in removal from the B program. Policymakers have used the DSH adjustment percentage as an indicator of how much uncompensated care hospitals are providing patients without receiving payment. Expansion[ edit ] Covered Entity Eligibility: The guidance said that hospital outpatient facilities whose costs are listed on a reimbursable line of the hospital's Medicare cost report meaning their services are reimbursable under the Medicare program are an "integral" part of the hospital and are eligible to use B discounted drugs.

340b business plan

In AprilHRSA made clear that hospitals must improve transparency by registering all outpatient facilities using B drugs with OPA and list these sites on OPA's database, which led to an increase in the number of sites enrolled in B.

Not all patients that seek care from a covered entity are qualified to receive outpatient prescription drugs at B discounted prices. Likewise hospitals participating in the B program are not required under the statute to provide B-discounted medications to patients in need.

Only "outpatients" are eligible to receive prescription drugs at B discounted prices because the program is an outpatient program. Hospitals are exempt from this third requirement. In HRSA also issued guidance allowing covered entities that did not have an in-house pharmacy to contract with a single outside pharmacy.

In AprilHRSA began allowing all B covered entities to contract with multiple pharmacies, instead of just one. Contract Pharmacy Arrangements[ edit ] Covered entities that participate in the B program may contract with pharmacies to dispense drugs purchased through the program on their behalf.

Although the majority of covered entities do not use contract pharmacies, their use has increased rapidly over the past few years. The Department of Health and Human Services Office of Inspector General conducted this study to learn about how participating covered entities operate and oversee their contract pharmacy arrangements, and what steps they may or may not take to effectively prevent diversion and duplicate discounts in contract pharmacy arrangements.

Moreover, the number of unique pharmacies serving as B contract pharmacies has grown by percent, and the total number of contract pharmacy arrangements has grown by 1, percent.

The covered entities reviewed in the study reported different methods of identifying B eligible prescriptions to prevent diversion in their contract pharmacy arrangements. In some cases, these different methods lead to differing determinations of B eligibility from one covered entity to another for similar types of prescriptions.

As a result, there is inconsistency within the B Program as to which prescriptions filled at contract pharmacies are treated as B eligible.

Most covered entities in the study prevent duplicate discounts by not dispensing B purchased drugs to Medicaid beneficiaries through their contract pharmacies. However, some covered entities that do dispense B purchased drugs to Medicaid beneficiaries through their contract pharmacies did not report a method to avoid duplicate discounts.

Although almost all covered entities reported monitoring their contract pharmacy arrangements, the extent of such monitoring varies. Few covered entities reported retaining independent auditors for their contract pharmacy arrangements as recommended in HRSA guidance. Manufacturer Discounts Offer Benefits, but Federal Oversight Needs Improvement[ edit ] We examined 1 the extent to which covered entities generate B revenue, factors that affect revenue generation, and how they use the program; 2 how manufacturers' distribution of drugs at B prices affects covered entities' or nonB providers' access to drugs; and 3 HRSA's oversight of the B program.

Thirteen of the 29 covered entities GAO interviewed reported that they generated B program revenue that exceeded drug-related costs, which includes the costs of purchasing and dispensing drugs. Of those remaining, 10 did not generate enough revenue to exceed drug-related costs, and six did not report enough information for GAO to determine the extent to which revenue was generated.

Several factors affected B revenue generation, including drug reimbursement rates.DHCS requires the Health Plan (such as PHC) to identify B drugs by tagging them with a specific code in a specific field in the monthly prescription file the Health Plan submits to DHCS. B Drug Pricing Program Jump to one reason cited for the growth is the opportunity to expand the patient base for drugs purchased under the B discount drug purchase plan.

The program allows facilities to purchase outpatient drugs at prices below market. The Oncology Business Review published a similar report in September The.

Overview of the B Drug Pricing Program Background. To understand the genesis of the B drug pricing program (B program), one must begin in when Congress created the Medicaid rebate program to lower the cost of pharmaceuticals reimbursed by state Medicaid agencies.

B Drug Pricing Program Jump to one reason cited for the growth is the opportunity to expand the patient base for drugs purchased under the B discount drug purchase plan.

The program allows facilities to purchase outpatient drugs at prices below market. The Oncology Business Review published a similar report in September The.

A Complex Environment. Hospitals participating in the B program can enjoy discounts on drug acquisition costs that appear to provide the underpinnings for a business plan that achieves sound financial margins, while supporting outreach and care for uninsured and underinsured patients.

An individual receiving B drugs must be a patient of the covered entity as defined by HRSA (PDF - 32 KB). However, the context of the situation may be taken into account in determining whether an individual can qualify to receive B drugs during an emergency and meet the patient definition as outlined by HRSA.

Detailed Overview - B Health