Live from MDRP 2012: September 11, 2012

This week, we're live from Chicago reporting on the current trends and latest information that matters do the Medicaid Drug Rebate Program industry.  You'll find highlights from a few of the sessions in addition to the key tweets from the day.  To join monitor and join the conversation, be sure to reference #MDRP12.

Impact of the Election on Healthcare Reform – What’s Coming and How Will it Affect the Pharma Industry?

In today's presentation from Paul Begala of, he analyzed the current state of the political environment and how it will effect the election which will then in turn affect the Medicaid industry.  He began his presentation with the observation that there are only to ways to go in American Politics: Time for a Change and Let’s Stay the Course. Only 12% of Americans believed the country is going in the right direction – this was with 2 wars and a depression going on. Today, Obama’s rating is 21%, which leads Begala to believe it won’t be a cake walk for Obama to be re-elected. Now, there’s a bump for he Democrats in the coming election for democrats. The only institution the American people have faith in right now is the military.

So when it comes to the next election what influences many of the voters? Television coverage. Begala points out that networks will cover extensively during an election: Scandals, gaps, polls and taxes.  Since the current campaign boasts none of the previous, candidates will look at how else they can set themselves apart. Obama is running on is “Compared to what?”. Romney is running on the “Are you better off then you were five years ago?”. It’s a negative campaign – but it’s about the issues: healthcare, etc and more. Medicaid could be what blows up the Republican ticket.  With that said, 4% of the people in the United States will decide the election. Non-college, Under 35, White and equal parts Male and Female in just a few states. They are tailor made for the middle class platforms. Virginia, Florida, Iowa, Colorado, Nevada and Ohio are the key states to winning this election. Begala calls fro Obama to win the election this year.

Annual update on the 340B Program Regulations, Processes & Enforcement Answers from PHS
Krista Pedley, Office of Pharmacy Affairs
Christopher Hatwig, MIS, RPh, FASHP, APEXUS/340B Prime Vendor Program
Lisa Scholz, PharmD, RPh, American Pharmacists Association

Where is the 340B program heading? The proram is beneficial to safety net providers.
Ongoging activities:

• -Determination of eligibility
• -Annual recertification,
• -Quarterly checks of FQHC status, DSH % and for hospital ownership status
• -Quarterly calculations of 340B prices
• -Maintenance of Medicaid Exclusion File

New Registration Deadline: Starting October 1 , entities will only be able to enroll the first two weeks of each quarter. Why is the OPA changing this?  The agency hasn't received the new resources to expand operations. So they have re-prioritized and will use these two weeks to complete this work. A new policy they're also instituting is that all documentation must be present at the time of enrollment..

340B Resources:
-Contract with the American Pharmacists Association http://pssc.aphanet.org
-340B Peer to Peer Learning Network
-HRSA Prime Vendor Program www.340bpvp.com

Potential Impact of the Proposed Rule and 340B Program Updates
Alice Valder Curran, Hogan Lovells US, LLP

The ACA Proposed Rule in its finalized state will rely on the presidential election.  If Obama is reelected, it will be earlier in 2013, and Romney will be later in the year, along with a few changes.

In the meantime, Curran reminds the audience that statutory requirements remain binding and make reasonable assumptions where there are gaps. For now, look at the worthy issues in the rule and assess what your company is doing. Management will want to know immediately when the rule is final, so take the time now to make a few changes.

• - The Default Rule: This will impact where AMP ends up, whether it is accurate and whether or not you can certify it. Curran believes that this will stand with the new Affordable Care Act.
• - Retail Community Pharmacy: Proposed to include non 5i AMP
• - Bona Fide Service Fee: the ACA will open the door for CMS to conclude that service fees were defacto bonified in all circumstances. CMS still wanted to have the qualified service fees and discounts, they still need to do the qualified assessment. They could qualify if they meet the definition.
• - MCO Rebate Expansion: CMS released a manufacturing and state release on how these claims will be identified in the resources. The effective date is drugs dispensed on or after 3/23/10

OPA Audit Results – What to look for:

• -How did the OPA determine the period of any non-compliance?
• -How are refunds quantified?
• -What if a manufacturer would prefer not to recoup?

The Manufacturing Audit Process is cumbersome. You have to create a plan that talks about something that hasn’t ever been audited before. That makes it very difficult. Once we have an OPA Audit Result, that will create more and more audits because there is a guide to go forward.

340B Industry Workgroup Roundup: What’s the Consensus?
Marcus Farbstein, Genentech

The 340B Industry Workgroup was founded in June 2006 and included such companies as AmerisourceBergen, AstraZeneca, GSK, Genentech and more. At that time they were looking at pricing transparency. It then became harder for manufacturers to participate as a result. It eventually faded, and reconvened September 2011. Currently, members include Amgen, Amylin, Baxter, Celgene, Cubist, Daiichi Sankyo, Genentech, Gilead, GSK, J&J, Lilly, Merck, Pfizer, Teva, Watson and the Anti-Trust Counsel. The anti-trust legal consel ensures that topics approached are general and applicable to everyone.

Their mission is to Improve 340B Program Integrity, effectiveness and efficiency. This group does not take on policy issues. What have they discussed? User fees, program audits and unique 340B identifier in charge back data.

Current issues the workgroup is focusing on:

• -How to operationalize Covered Entity refunds
• -The impact of the recent OPA data base changes
• -Feedback on OPA’s Covered Entity recertification process
• -How to best handle real time terminations

Duplicate Discount Production: No way for states to submit Medicaid Rebates. How do manufacturers validate for a duplicate discount? What about the new regulations and guidelines facing the industry? Also future program changes are just a few of the future program changes.

Improving 340B Program Integrity through Covered Entity Audits

Krista M. Pedley, PharmaD,
Amy Van de Car, Compliance Implementation Services,
Marcy Imada, Deloitte and Touche

Deloitteis assisting manufacturer who is going through an audit.
What does a manufacture have to do to establish cause to go through a 340B Entity Audit? A covered entity can be audited. What is reasonable cause to establish an audit? A manufacturer should think about implementing a 340B Monitoring program. OPA does not have a standard format to follow. Deloitte suggests both quantitative and qualitative data should be used to document the cause.

Before the audit? The manufacture needs to work with the covered entity to see if there are valid reasons for the entity to be observed.

GAGAS – Generally Accepted Government Accounting Standards. It’s the set of standards close to internal audit standards. They’re based on performance audit standards. Under GAGAS, the auditors have ethical standards to produce the audit. There additional hours that need to be completed for audits in this space.

Prepare for the Inevitable – Best Practices in Working with Your Auditors
Tom Fuchs, IMS Health Managed Market Services

There are two types of audits: internal and external.

In an internal audit, they review similar activities to external auditors, but they have an expanded sample scope and are focused on process improvements. They assess whether or not they are following their internal processes and procedures.

What should a company have ready before the audit? Full documents including written polices, standard operation procedures, detailed work instructions for each critical financial calculation activity. You should also have company assumptions made regarding pricing calculations due to pending or unclear CMS Guidelines and fully documented employee compliance training programs. Assumptions on how you’re dealing with in today’s environment should be documented before you are audited.

Data Security is also very important when an audit is being conducted.  Who are the stakeholders and how do I protect the security of it? DO I also have all the important information to report it correctly?

Best practices during an audit:

• -Identify a single employee as a point of contact for the audit team
• -Coordinate and track all communications with the auditors
• -Stamp any hardcopy documents as “Confidential”
• -Standardize electronic file naming conventions and label as “Confidential”
• -Legal documents should be stamped with “Attorney Client Privileged”

Top tweets of the day:

#MDRP12 Fuchs: The best defense for any audit is a well thought out and documented offense.
— Healthcare Business (@healthcarebiz) September 11, 2012

If you're not monitoring your 340B contracts as closely as your commercial, you're doing your company a disservice. #MDRP12 @healthcarebiz
— Heather King (@HeatherIIR) September 11, 2012

#MDRP12 Healthcare is moving outside the doctors office & hospital to wherever the patient is to bend the cost curve.
— Healthcare Business (@healthcarebiz) September 10, 2012