Announcer (00:05):
Welcome to 340B Insight from 340B Health.

David Glendinning (00:12):
Hello from Washington, D.C. and welcome back to 340B Insight. The podcast about the 340B Drug Pricing Program. I'm David Glendinning with 340B Health. We are coming to you from our booth in the virtual exhibit hall at the 340B Coalition Summer Conference, which started July 20th and runs through July 28th. We thank all of you who registered to attend this important event, and we remind you that most sessions will be available on demand for 60 days following the end of the conference. So if you miss something, you can still catch up. Go to 340bsummerconference.org to learn more.

David Glendinning (00:55):
Our guest today is Steven Miller, the vice president of Pharmacy Services here at 340B Health. We spoke with Steve about the upcoming annual 340B recertification process, which we know is on the calendars and the minds of many of you. But before we go to that interview, let's take a minute to cover some of the latest news about 340B.

David Glendinning (01:24):
The Centers for Medicare and Medicaid Services has released a proposed rule that outlines how Medicare plans to pay hospitals for outpatient services beginning January 1st, 2022. The rule proposes that Medicare continue a nearly 30% cut to payments for drugs obtained through the 340B program for many eligible hospitals. These payment reductions have been in place since 2018 and the new development indicates that the Biden administration plans to keep them going into 2022 despite strong opposition from the 340B hospital community. In our previous news update, we told you the U.S. Supreme Court will be taking up a case over whether the government has the authority to impose these cuts just on 340B hospitals, but CMS likely will finalize 2022 Medicare payment levels well before a decision comes down in that case. So in the meantime, hospitals will be advocating that the agency change course on this payment policy before it locks in those rates.

David Glendinning (02:29):
And on Capitol Hill, a pair of U.S. House members has introduced a bipartisan bill aimed at stopping discriminatory payment policies against 340B-covered entities. Representatives David McKinley, a Republican from West Virginia, and Abigail Spanberger, a Democrat from Virginia, are the authors of the PROTECT 340B Act. It would ban pharmacy benefit managers and health insurers from setting inequitable payment rates or rules for 340B providers based on their participation in the program. More than a dozen states already have enacted similar legislation, but this federal bill would ban such practices throughout the U.S. For more information about these developments, check out the show notes for this episode.

David Glendinning (03:24):
Now, for our feature interview with 340B Health Vice President of Pharmacy Services, Steven Miller. Like many of you, Steve is tracking the upcoming 340B recertification process, one of the crucial steps that covered entities must take to ensure continued eligibility for the program. Myles Goldman recently sat down with Steve to learn more about that process and how hospitals can prepare for it. Here's that conversation.

Myles Goldman (03:52):
Thank you, David. I'm joined by Steve Miller. Steve, last time we had you on the show was during the winter about preparing for 340B audits. With HRSA recently announcing that 340B recertification will take place August 16 through September 13, we thought this would be a great time to have you on to discuss the process. Welcome back to 340B Insight.

Steven Miller (04:17):
Thank you, Myles. I'm happy to be here again.

Myles Goldman (04:20):
To ensure everyone listening is on the same page, what is the purpose of the recertification process?

Steven Miller (04:27):
I often remind myself to think about what is the source of truth when I'm thinking about a particular topic and how it relates to compliance and those kinds of things. So with 340B things, we often think of the 340B statute as that source of truth, and that certainly is the case with recertification. The statute describes a method that the Health and Human Services Secretary was instructed to implement, and that is now what we call recertification. But the purpose of it is really to confirm or validate that covered entities, eligibility, and accuracy of the information in the Office of Pharmacy Affairs database is complete and accurate. HRSA also uses that for the covered entities to make a pledge of their compliance with all 340B program requirement.

Myles Goldman (05:21):
I liked that term, "the source of truth." That sounds like something out of like a Star Wars or something like that.

Steven Miller (05:27):
Yeah, we could call it the sword of truth too, I guess.

Myles Goldman (05:31):
So the real purpose is to just make sure that they're following program compliance, right?

Steven Miller (05:36):
Right. That they're eligible, they continue to be eligible, and that their information is accurate, and that they are compliant.

Myles Goldman (05:43):
How should hospitals be preparing for recertification and when should they start?

Steven Miller (05:48):
Well, really, they should start when they enroll in the program and register their hospital and child sites as participating in 340B, but you have to do this every year. And so, a good place to start is by looking at your policies and procedures and making sure that your operations, your day-to-day 340B operations, align really closely with what you have written down in your policies and procedures. After that, the most critical thing that hospitals can do is to make sure that all of their information that is listed in the Office of Pharmacy Affairs Information System or OPAIS is complete and accurate, and pay a special attention to things like qualification information, eligibility information, demographic information, so addresses, names, phone numbers, contact information, and the Medicaid Exclusion File. Secondly, recertification also requires a lot of documentation if you make any changes or updates during the recertification. So you want to gather all those first before you actually open up recertification task to get started. Remember, recertification is the action of confirming that everything is right. It really shouldn't be about making routine changes because the quarterly registration periods are really designed for that.

Myles Goldman (07:08):
What are the eligibility criteria that hospitals must meet for recertification?

Steven Miller (07:14):
Well, there's a list of things, Myles, and we'll just touch on those lightly. But first of all, all hospitals that are participating in 340B have to be non-profit hospitals. If they are a for-profit corporation, they cannot participate in 340B by definition in the statute. Secondly, non-profit hospitals can be either public hospitals, so they're owned or operated by the government, or they can be private hospitals. If they are a private hospital, they have to have a contract with a unit of local or state government to provide healthcare services to those individuals, low-income individuals, who don't qualify for Medicaid or Medicare services.

Steven Miller (07:53):
Next, all hospitals, except for critical access hospitals, have to meet or exceed a disproportionate share adjustment percentage, which is on their Medicare cost report, and they want to be using the one that was last filed. For DSH, cancer, and children's hospitals, they have to exceed 11.75%. For rural referral centers, and so community hospitals, they can equal or exceed 8% of that adjustment percentage to qualify. And as I said, the critical access hospitals are exempt from that requirement. All hospitals and child sites that are participating in 340B must have reimbursable outpatient costs and charges on that last filed cost report. Now, of course, we've already mentioned that this is about compliance. So HRSA is expecting the Authorizing Official, who makes the submission for recertification, to promise or pledge that they're going to be compliant with all 340B program requirements.

Myles Goldman (08:53):
You shared with us what hospitals should be doing leading up to recertification. Now, let's talk about what hospitals should be doing once August 16th comes.

Steven Miller (09:03):
Once recertification opens on the morning of August 16th, either the primary contact or the Authorizing Official will log into OPAIS and open up their dashboard and then look at their tasks, and there will be a recertification task pending. Once the primary contact or the Authorizing Official opens that recertification task, they want to find and check the parent hospital site first. It's really important to start with the parent site in recertification because once they make all of the changes or updates or confirm that everything is correct in the demographic information about the hospital and the qualification information, that will all transfer to all of the associated child sites so they won't have to do it for each one. If you don't start with the parent, then you're going to have to do it for each one and it'll take much, much longer.

Steven Miller (10:02):
So after checking the demographic information and they want to check the qualification information, and this is super important, need to take that last filed cost report and make sure that all of the qualification information on the Medicare cost report matches what is in OPAIS. You cannot depend on the upload from CMS to go to OPAIS and to make all that information match at the time of recertification. It might or it might not, but don't even pretend that it might. Just automatically look at it and make sure that those fields all match.

Steven Miller (10:39):
So we're talking about the DSH percentage, we're talking about the Medicare cost report filing date, the Medicare cost reporting period, that control type and classification type for the hospital, all of those things are on your Medicare cost report and they must match in recertification. Because if they don't and you get an audit six months from now and you submit that information from your last cost report and it doesn't match what you attested to in recertification, you're going to get a finding. It's just important to do that right off the bat. Next, you want to make sure that you check all of your other information for each child site after completing the parent site and make sure that that is accurate as well.

Myles Goldman (11:20):
Steve, if the hospitals find that the information doesn't match on their Medicare cost report, what can they do?

Steven Miller (11:28):
If it doesn't match, the most important thing that they would do in recertification is to make the changes in the recertification task, and then the system will prompt them to upload the supporting documentation, whether that's certain worksheets from the Medicare cost report that is showing, "Okay, the recertification default is showing a DSH percentage of 15% but our last cost report is 18.3%." So even though it's not a change in eligibility, it is still a discrepancy between the last cost report and what is showing up in OPAIS. So they would change it to match what's in the last cost report, and then they would upload that worksheet that shows that figure. The important thing also to remember is during recertification, the traditional change request process is locked for hospitals who are recertifying until after the recertification is approved by HRSA. So they can't go in and make routine changes. They would have to make all of those changes to anything that is not correct during the recertification process.

Myles Goldman (12:37):
Let's talk about the Medicaid Exclusion File. Why is this a critical component of the recertification process?

Steven Miller (12:46):
The Medicaid Exclusion File really ties back again to the statute. So the 340B statute has a requirement for the secretary to implement a mechanism for covered entities and other stakeholders to be able to prevent duplicate discounts, and that's where a manufacturer provides the 340B price and Medicaid agency is submitting a rebate for the same drug billed to Medicaid. The Medicaid Exclusion File process of validating that information and recertification is an important part because it has such a big consequence if it's wrong. So a manufacturer can be harmed by paying the discount twice and the hospital is noncompliant if they don't have the information in there correctly. Last year, HRSA made changes to the Medicaid Exclusion File, which requires hospitals to list their Medicaid billing number and NPI number if both are used on the billing forms for every location and billing Medicaid for fee-for-service patients for 340B drugs.

Myles Goldman (13:56):
You mentioned the Authorizing Official a little earlier. Can you explain further about the importance of the AO?

Steven Miller (14:06):
The Authorizing Official is really the most important person from the covered entity or the hospital participating in 340B because they are the one person, the only person, who can do all of these things in terms of a final way. They have to have legal authority to bind the hospital or the covered entity in matters with the government. When they receive tasks or notifications from HRSA, they have to respond to those. The primary contact can enter information, they can make changes, they can submit comments on things in OPAIS, but only the Authorizing Official can submit those to HRSA for approval or finalizing whatever the item is, including change requests.

Myles Goldman (14:54):
Do hospitals ever fail to be recertified and what are the most common reasons if this occurs?

Steven Miller (15:03):
There are some hospitals every year that do not recertify. Fails is a little bit of a hard word there because sometimes it's just a natural consequence because they no longer qualify. Now, the predominant reason is their eligibility DSH percentage has dropped on their cost report that has just been filed just before recertification starts. The other reason, it can be a change in their type. So if they are purchased, they're a non-profit hospital that's purchased by for-profit corporation and they are no longer non-profit hospital, then they would no longer qualify. That is another reason that some hospitals do not recertify. There are a very, very, very small number who just don't get all the information done on time, and then they have to work one-on-one with HRSA to complete it. And sometimes HRSA will allow them to go on and recertify late, or sometimes they have to wait out a quarter and re-enter the next quarter.

Myles Goldman (16:10):
Through any of the examples you just provided there, if the hospital is no longer eligible for 340B, when is their next opportunity to become eligible again?

Steven Miller (16:22):
Well, it depends on the reason that they drop. If it is eligibility, that's tied to the Medicare cost report, and their next cost report is not filed for another 12 months, then it's going to be 12 months plus another quarter. Because once they register, then it's not effective until the following quarter. So it could be as late as January of 2023 in today's terms.

Myles Goldman (16:47):
What are some of the most common errors hospitals make during recertification and what are some of the best practices to avoid those?

Steven Miller (16:57):
The most common error that I hear from our members is that the primary contact or the Authorizing Official didn't check every single one of those qualification requirements, so the DSH percentage, the Medicare cost report filing date, or the cost reporting period, the control type, any one of those things, or classification type. If they just think that if it's defaulted in, then it has to be right but it isn't always. Something has changed or they filed an amended cost report, which has changed one of those numbers. So it's just really, really important to check that information based on what the last cost report is, including if there was an amended cost report filed.

Steven Miller (17:42):
The second thing is just double-checking. So two sets of eyes is a really good practice here for recertification. The primary contact goes in and looks at everything first, makes any changes, comments, submits that to the Authorizing Official, and then the Authorizing Official reviews it again, making sure that everything is right, and that seems to work really well for hospitals. If after recertification is completed and HRSA has approved it, the next best practice is to go back into OPAIS and check that everything's saved correctly, because we've heard from a few hospitals that they thought they made the change, but they didn't take a screenshot, and that's another best practice. Take a screenshot of every single page as you go through it and particularly if you make changes, so you have something to go back to. And then if it didn't save, then you have something you can take to HRSA and say, "Look, here's a screenshot as we went through it and it shows the different number, and now it doesn't show that number that we changed it to," and they can help work through fixing those kinds of things.

Myles Goldman (18:51):
If a hospital has questions about recertification, what should they do?

Steven Miller (18:56):
Well, certainly they should go to our website and look at all the resources that we have on our website at 340bhealth.org. There are a number of these resources and member tools. There's actually even a section for recertification and registration. With registration and recertification are really closely tied together. Secondly, if they have questions they don't see the answers or they're not really sure they understand exactly what they need, they can reach out to us by email and set up a call with one of our staff experts. The info at 340bhealth.org is as good a place as any to send that email. That's an easy one. You don't have to know somebody's name. Certainly, you can reach out to me, but we have a number of staff that can answer these questions. And lastly, we always hold a webinar just before recertification. And so, we'll be holding this webinar this year on August 12th at 2:00, and we would encourage everyone who is involved in recertification or even 340B operations to register and watch that webinar with us on August the 12th.

Myles Goldman (20:00):
I know this can be one of the more stressful times of the year for staff managing their 340B programs, so thank you, Steve, for taking the time today to help share best practices for successfully navigating 340B recertification.

Steven Miller (20:16):
You're more than welcome, Myles. Were always available to help.

David Glendinning (20:19):
Our thanks again to Steven Miller for walking us through the 340B recertification process that will launch August 16th. If you would like to learn more about the member resources that Steve referenced, you can find a link to that section of our website in the show notes. And be sure to mark your calendars for the 340B Health webinar on recertification. Again, that will be on Thursday, August 12th at 2:00 PM Eastern time. If you have any questions about recertification or any episode ideas or feedback, you can email us at podcast@340bhealth.org. We will be back in a few weeks. As always, thanks for listening and be well.

Announcer (21:07):
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