(pleasant music) - Welcome to "340B Insight" from 340B Health. - Hello from Washington DC, and welcome back to "340B Insight," the podcast about the 340B drug pricing program. I'm your host, David Glendinning with 340B Health. Our guest for this episode is Melissa Bruce with UNC Health based in North Carolina. On the show, we recently covered the topic of navigating 340B audits with one of the presenters at the most recent 340B Coalition Conference.
We also wanted to speak with a 340B expert on how hospitals can help prevent findings for one of the key compliance violations that auditors look for, duplicate discounts. And that's where Melissa came in. But first, let's take a minute to cover some of the latest news about 340B. (exciting music) There is new federal legislation to end drug company restrictions on access to 340B pricing through contract pharmacies.
Congresswoman Doris Matsui, a democrat from California recently introduced the 340B PATIENTS Act of 2024. It would clarify the 340B statute to bar drug makers from imposing restrictions or conditions on covered entities receiving 340B discounted drugs, regardless of where those drugs are dispensed to the entity's patients. If the bill were to become law, it would end the restrictive policies from the more than 30 drug companies that now have them in place.
Visit the show notes to read Congresswoman Matsui's announcement and 340B Health's statement on the legislation. State governments also continue to make progress on the contract pharmacy dispute. In one of the most recent developments, a federal appeals court has cited with Arkansas health officials regarding a law preventing restrictions on 340B contract pharmacies in that state.
The pharmaceutical industry had sued the state over the constitutionality of the law, but the court issued a decision, saying that federal statute does not preempt state law in this case. 340B Health members can read more about the decision and possible next steps in the court case by visiting the show notes. (exciting music) And now, for our feature interview with Melissa Bruce. Melissa is a 340B certified compliance analyst for UNC Health.
She presented on a panel at the 340B Coalition Winter Conference about duplicate discount prevention. This is one of the most important compliance requirements for 340B hospitals, and it can be quite complex. But UNC Health has been pursuing an innovative approach to duplicate discount prevention, and we spoke with Melissa about some of the lessons the health system has learned during implementation. Here's that conversation.
- I am speaking with Melissa Bruce (atmosphere humming) (people chattering distantly) here at the 340B Coalition Winter Conference, and we are competing with the Ice Cream Social. So, we're gonna try to keep our mind on what we're here to talk about today, and that is duplicate discounts. So Melissa, welcome to "340B Insight," thank you for being here. - Yeah! Thanks David, thanks for having me. - Tell us a little bit if you could, about UNC Health and the patients you serve there. - Sure!
So, UMC Health is comprised of 14 hospitals in over 700 clinics. The 340B program management team, that's who I'm a part of, oversees the program compliance for 10 covered entities. And we service all of North Carolina. And kind of your basic patient mission for us is going to be improving the health and wellbeing of North Carolinians and others whom we serve. - Wonderful.
Well, we've had episodes before where we've focused on 340B audits, but we have not yet done a deep dive on one very important element of that, which is preventing duplicate discounts. So, to start with, what do we mean when we talk about duplicate discounts? - So, a duplicate discount is really when you have drug coverage that can involve Medicaid rebates that are paid out to states from manufacturers, as well as providing the 340B discount to covered entities.
When we talk about duplicate discounts, we're looking at making sure that the covered entity has mechanisms in place to prevent the duplicate discount or the risk of an audit finding. So, it's just really important to keep in mind from a covered entity that that responsibility lies within that covered entity, and not necessarily with the manufacturer or with the state Medicaid agency.
- Clearly, this is gonna be high on the list of compliance concerns for covered entities, and I understand there may be different factors at play based on what state a covered entity's operating in, correct? - It can vary state by state, and it's especially important to think through, if you're a covered entity, what are the requirements in your home state.
Another piece of that is if you have multiple border states, or if you're in a high kind of pass through area where you have a lot of tourists, or maybe a high college town, where you will see a lot of different states. And so, it's really taking a look at how varied they can be, what the requirements are, and what type of Medicaid is even provided within that state. Let's say, if it's fee for service and you have managed Medicaid, how do you want to address those?
Do you wanna carve in or do you wanna carve out? And really what that means is if you're going to bill fee for service Medicaid, you're going to carve in for your 340B drugs. If you decide, hey, these particular states that might be not necessarily state, you only have one claim that you wanna carve out, so you're choosing not to bill Medicaid and 340B drugs.
We have several states that are mandatory carve out states, meaning that you don't have the option to bill Medicaid and use 340B drugs for those patients. And then, on the flip side, you have a couple states that are mandatory carve in. And so, that's a whole different level of complexity because then you really have to focus on understanding the EHR and billing requirements, and you don't have a choice in the matter.
So, really understanding where are you at for your covered entity, is at your home state? Which is obviously the most important. But as well as a border state, you might have half your volume coming at the border, and you really need to be able to understand the billing requirements for both sides. - Okay, so carving in, carving out, fee for service versus managed care, there's certainly, adding a bunch more terminology to the list, which is not uncommon with 340B compliance.
You mentioned the complexity level before, how complex can this actually get for a system like UNC Health? In terms of having systems in place to prevent duplicate discounts? - So, it can get very complex, especially when you're looking at multiple child sites. Because each child site needs to have consideration for the Medicaid billing. So, one big thing that we need to talk about is the Medicaid exclusion file. So, this is a requirement on OPAC for every 340B ID within that program structure.
So if you are a large institution and you have multiple child sites, that it can vary from two child sites, it could be 100 child sites, that every one of the child sites should be operationalizing Medicaid the same from a compliance standpoint.
If you decide only half of them are gonna carve in and then the other half are gonna carve out, it really is understanding the compliance risk associated with being able to audit for that, and maintaining accuracy on the Medicaid exclusion file, as well as ensuring that OPAC mirrors the operations within those child sites. So the complexities for UNCH, it really is taking a look at the cross border areas. So, we do have several that are going to be right at the border.
So, when we talked about understanding the different types of Medicaid and really understanding the billing requirements, is understanding that those particular border areas, you need to know that patient volume. Do you choose to carve in versus carve out? The other side of this is really understanding from a mixed use standpoint, so this is the institutional claims that are being billed, not the retail pharmacies, how do you manage a carbon carve out list, and what does that look like?
And then, from a retail pharmacy standpoint, it gets a little bit easier because you've got your bin and PCN, and group lists that you still have to compile the data, but it's a lot more easily identifiable. And then if you do have to implement a carve out list, that tends to be a little bit on the easier side versus trying to figure out different payers in the institutional area.
- When we think about the 340B hospitals that 340B health represents, our members, we're always on the lookout for ways to help manage some of those types of complexities within the program. So, what kinds of processes can hospitals implement to handle, or perhaps reduce these levels of complexities while still remaining compliant with all 340B rules? - So, there's a couple of types of process that can be considered.
So, you have manual workflows, and these are really, when you talk about manual, it really is manual. It's reviewing Medicaid dispensations, it's taking a look at how do you identify these payers? How do you get into your EHR? So, it's understanding within the EHR or who in the organization can even help you say, hey, this particular payer name is fee for service Medicaid.
If you don't know what that looks like or even managed care organization, sometimes the naming convention can look like a commercial payer. And really, this is where you get into collaborating within your covered entity, is bringing out knowledge and helping you close the gap. Especially when we're looking at carve out lists, preventing those 340B accumulations is imperative. If you do not, and you're carving out but the manufacturer thinks you're carving in, this is a duplicate discount.
And so, you're trying to prevent that, and you might need a little bit of help, and that's okay. It really is just honing in on those experts. And then another process is really taking a look at a cadence check. So if a weekly check becomes very cumbersome, do you have resources? Do you have somebody who is Excel-savvy? And if you do and you start to get heavily Excel-based, and this resource is fantastic, but they're so great, they might get promoted. And then what do you do?
And then another kind of option which isn't gonna sound too pleasant, is carving out entirely. From a financial standpoint, understandably so, it's likely not viable. However, if you don't have a resource to understand EHR configurations, how do you apply those modifiers, or how do you go through applying the 340B actual acquisition cost? You might need to do a temporary carve out just until you get that down.
Biggest piece on that to consider is, while you might be losing out on 340B savings, you are considering the compliance for the entire program. And so if it's a very short period of time, you get somebody in place and you get those modifiers set, then you can get right back to carving in. - I'm getting the feeling here that there's another option at play, and certainly based on your presentation here at the conference, another option besides either manual workflows or total carve out.
So, how did UNC health decide to approach this complexity challenge? - Yeah, so we really had to think outside of the box. And it was talking through various resources even within the team and team's leadership of understanding what was happening in our TPA, what was happening in our EHR. So, our approach was to take an automated workflow approach, which is truly just streamlining those manual tasks.
So, what we did is took a look at our TPA dispensation file, and that was really again using resources within the covered entity, who is the expert? Who manages the data that you might need? And working with our director of revenue cycle and identifying payers that we consider either out of state Medicaid, or there's third party billing services. What shows up on the institutional claim is not the name of the Medicaid payer, it's the name of the service.
So, you might look at that and not think it's Medicaid, but it really is. And so, how do you build this carve out list? So, we worked really hard with a few different groups of people to create a carve out list, and then what we did is we decided we wanted to block those list of payers from flowing to the TPA. So, stopped 340B accumulations, we were able to successfully get through one implementation. We do have many more to go.
So, just keeping in mind thinking outside the box, get the wheels turning, the size of the covered entity is super important. If you have just a small low bed dish with no child sites, so using automation if you don't have the resources might not be the most appropriate. But you can look at automating even an Excel file if you're doing monthly audits, or if you're going through and you're doing them quarterly, think different ways, just get outside of the box, ask other people too.
Big thing is, is using your peers. Find another covered entity that's similarly structured, and ask them what they did. - That process does sound very compelling. The automation process for, as you say, covered entities for whom it makes sense to to implement it. At UNC Health, what benefits did you see from moving to workflow automation? - So, the first one is really taking a look at accuracy and improving accuracy.
Accuracy is really important because it instills reliability, which then really shows your stakeholders that what you're doing is valid, and it really increases the trust they have with you, especially if you're an enterprise level team. If you're doing work on behalf of a covered entity client, and letting them know that hey, what we're doing increases accuracy, which is gonna lower the risk for duplicate discount finding.
Part of my preparation for the presentation was really looking at HRSA's findings. What audits they've completed. And something that I just put into my presentation, and wanted to kind of mention here is, since 2015, it was very consistent trend, that 15 to 20% of entities that were audited by HRSA had duplicate discount findings. So, really thinking through how can you prevent them is super important. Another benefit was improving workflow.
So, by improving workflow, you're taking out any repeated tasks, you're becoming more efficient, you're able to have better use of your resources, you're really optimizing so that you can meet the objectives. And then finally, it's looking at time constraints, and finding new ways that you can use those resources. So, there might have been a project that's been pending.
Or something else that you needed to kind of bring to the table, and now you have this freed up resource to be able to start a new project. Or maybe there was another area within the program that needs more attention. That's not duplicate discount-related, but equally important from a compliance standpoint. - You mentioned those HRSA audit stats, which I'm imagining are top of mind when you're thinking about this.
So, how did you ensure that the new process you put in place was going to work as intended? - So, we really took a look at who we needed to talk to, and who was gonna be the most appropriate to, from start to finish, be able to implement and really understand our requests. So, first and foremost was identifying the right person who could update our logic.
And again, it's taking a look at that list of payers, so that carve out list, and then being able to understand how the logic truly works, so that we could apply exclusionary filters. Another big piece here, which, it ended up being a vast majority of the work, was validating how the new logic would work if we implemented it.
So, what we did is we identified our covered entity that we wanted to pilot our automation workflow with, which just so happened to have gone through a recent HRSA audit, and started with test file information. So, the prep work that we used for that HRSA audit, it was an out-of-state Medicaid audit, was our kind of test file that we used, and then we were able to look at using that date range, can we update the logic? Give me what the new version of the logic would be.
(atmosphere humming) (people chattering distantly) So, it's really just baseline testing and validating, to look at did the update and the logic work as intended? Or were there inadvertent consequences? Or, was more data removed from that file that didn't need to be? So, were some of those carve in payers that was the data missing? Or, did some of the payers still flow through and we didn't need them to be?
So, really using that test case to make sure that everyone understood how the change in logic was going to be applied, and then making sure that we continue that through go live. - That's very interesting. The idea of doing a dry run with the previously audited site. Any lessons that you learned from this process? - So, I think the biggest thing that we really picked up is that larger, more complex sites are going to need more validation.
So, we were kind of filtering through data, we thought we understood how the logic worked, and it ended up being that we needed more time. Going through and looking at how secondary or tertiary Medicaid payers, if there was some type of payer reprocessing that was occurring, how did that look? So, it really was looking at individually from a covered entity instead of doing a mass rollout, we needed to do one version, so that we could understand really what was going to happen.
Another one was really understanding that there was a need for frequent checks, especially at Go Live. How often is data being sent to our TPA was a big thing that I don't think we realized when payer data flowed through, we assumed it was going at the same time as our dispensation file, and it ended up being a several week lag time.
So, we needed a larger amount of time in between doing validation of the live data, and so we really got into setting a precedent for doing regular cadence checks after Go Live. And then finally, the biggest thing, I think two people think through things, is that it is not a set it and forget a process. Maintenance is key. You wanna continue to check. So, what if a new payer is added to the EHR? What if a new state is billed? What happens if the state billing requirements change?
What happens if one of your border states ends up contracting with a completely different state and you weren't aware of it? So, you just really have to continuously check and do maintenance is super important. - After seeing this positive example from you and hearing your presentation, let's assume another health system out there is sold now on the idea of implementing workflow automation. What additional advice might you have for them?
- One thing I learned since my first conference, is that when you talk to other people here, it really highlights that you are not alone. (chuckling) And you can actually have a conversation with somebody and they know what you're talking about. One of the biggest struggles I think that we had was really communicating clearly and concisely what we needed in a way that it was easily translatable throughout the covered entity.
Words that we might use in the 340B space we think means one thing if you're talking to somebody in revenue cycle, if you're talking to somebody, maybe in your IT department, but it means something completely different. So, making sure that you're standardizing your terminology, it's clear and concise, but also setting an expectation, maybe have them repeat the ask back to you to make sure that they truly understood what you were saying. Another one is really engaging with peers.
I mentioned this earlier, is reach out to another organization that's the same program structure. If you use a consulting service. We have 340B experts everywhere. Reach out to somebody, it's okay, it's one of those adages, there's no stupid questions 340B is one of those things, ask the questions. And then finally, I think this is most important, be patient and stay motivated.
I've been at the forefront of working on this particular project, and it took nine months to get one covered entity, and you get through month three or month four, and really making sure that you stay motivated, and really understanding why you're doing what you're doing, and that it is super important. - Melissa, I enjoyed the opportunity to look more closely at such an important element of 340B compliance with us.
So, best of luck with the rolling this out to additional sites, and thank you for sharing your experience and your advice. - Yeah! It was great talking, and I am so glad that you reached out about the interview! - Our thanks again to Melissa Bruce for helping us better understand the complexities of duplicate discount prevention and how 340B hospitals can navigate them. We also thank her for sharing her great advice and lessons learned with her fellow conference attendees.
And we wholeheartedly agree that when it comes to 340B operations and compliance, there are no stupid questions. We hope that all of our listeners grant us the same grace as well. What questions do you have for us? We invite you to send them along so we can plan topics for future episodes. Please contact us at podcast at 340bhealth.org. We will be back in a few weeks. In the meantime, as always, thanks for listening, and be well. (electronic music) - Thanks for listening to "340B Insight."
Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter @340BHealth, and submit a question or idea to the show by emailing us at podcast@340Bhealth.org (exciting music) (narrator chanting indistinctly)