Key Insights on HRSA’s 340B Rebate Model – Act Before Sept. 8

General Requirements

Plan should include assurances that all costs for data submission through an Information Technology (IT) platform be borne by the manufacturer and no additional administrative costs of running the rebate model shall be passed onto the covered entities.

Many manufacturers have already developed data submission platforms through Kalderos, Beacon, etc. Therefore, this requirement is likely to be met by manufacturers. However, the administrative costs to collect and submit the data will be an additional direct expense for the covered entities. Within your comments, Advis recommends providers consider highlighting the added costs involved in the data collection process, compared to the current prospective pricing process.

Plan should allow for 60 calendar days’ notice to covered entities and other impacted stakeholders before implementation of a rebate model, with instructions for registering for any IT platforms.

CEs should also host conversations with their TPAs to ensure they will be prepared to create data sets necessary to submit the requisite documentation. It is likely that the process shall take more than 60 days to develop.

Plan should allow for covered entities to order the selected drugs under existing distribution mechanisms (e.g., 340B wholesaler accounts with pre-rebate prices loaded) to ensure purchases flow through existing infrastructure.

Covered entities have experienced significant disruptions in pricing availability through the contract pharmacy restrictions, despite manufacturer promises that the pricing would be loaded appropriately. CE should consider the impact of requiring a third party to manage pricing (e.g. the wholesaler) and consider requirements for manufacturers to oversee the validity of data.

Plan should provide a technical assistance/customer service component and ensure that opportunities to engage with the manufacturer in good faith regarding questions or concerns are made available to covered entities through both the IT platform and a point of contact at the Manufacturer. 

Covered entities should consider requesting additional clarification regarding the type of customer service assistance that should be required. For example, whether manufacturers will be required to provide a direct phone line and web chat support in addition to email support, and whether it will be directly with the manufacturer or through a third party, as it seen with 340B ESP.

Plan should ensure that the IT platform has assurances in place to ensure that the data is secure and protected and collection of the data is limited to the elements listed below that are necessary for providing 340B rebates pursuant to section 340B(a)(1) of the PHSA.

It is recommend that covered entities ensure CMS and HRSA obtain confirmation of HIPPAA compliance from OIG and offer protections to covered entities should the portal be hacked. As seen in the current Beacon terms of use, CEs would not be protected.

Plan should ensure that the IT platform has mechanisms in place to protect patient identifying information, which is required to be maintained in a manner consistent with the Health Insurance Portability and Accountability Act of 1996 and any other applicable privacy and data security laws.

HRSA should request manufacturers present specific mechanisms and processes for securing personal health information and other sensitive data and to obtain approval from the OIG regarding the submission process. HRSA should address the current Beacon and other Vendor’s Terms of Use.

Reporting Requirements

Plan should ensure that covered entities are allowed to submit and report data (as detailed below) for up to 45 calendar days from date of dispense, with allowances for extenuating circumstances and other exceptions, including adjustments when a 340B status change occurs on a claim.

The 45-day period is not a reasonable time period to submit data, as it undercuts typical industry standards regarding auditing procedures, contract pharmacy reprocessing windows, claims reprocessing, and the issuance of Medicaid rebates, which are offered quarterly. Further, CMS recently proposed a quarterly data submission process within the MPFS Proposed rule regarding the “Exclusion of 340B Acquired Units From Part D Rebatable Drug Requirements”, highlighting CMS acknowledgement that claims data may be reasonably relied upon beyond 45 days.

Plan should ensure that the IT platform will have the capacity to receive data that will filter and use only the data required to effectuate the rebate (e.g., if drugs other than selected drugs under the Medicaid Drug Price Negotiation Program are submitted, the platform will be able to identify and discard unneeded data).

HRSA should request manufacturers to present specific mechanisms and processes for securing personal health information and other sensitive data and to obtain approval from the OIG regarding the submission process.

HRSA should also require that Manufacturers discard all data and not allow it to be used for other reasons, as is the case for data submitted to 340B ESP.

Plan should ensure that the IT platform will have the capability to provide real-time reconciliation reports for covered entities to be informed of the rebate status of submitted claims.

While having access to reconciliation report is a benefit to covered entities, the notice does not make it clear what kind of information must be included within the reconciliation reports. Therefore, Advis recommends that covered entities request confirmation of what will be included in the reports to ensure it will enable them to manage the data effectively.

A manufacturer should agree to provide OPA with periodic reports consistent with the information outlined in this Notice, in a format and manner specified by OPA (instructions forthcoming).  Such reports should detail data on purchases provided through rebates, information related to claim delays and denials, and other information that may evaluate the effectiveness of the rebate model.

Pending further instructions Advis may offer additional feedback. However, initially Advis would recommend that the reports be made publicly available to improve the overall transparency of the program.

Process for Issuing Rebates

Plan should specify if rebates are paid at the package level, or at the unit level.

In the event that data is required at the package level, this would detrimentally impact slow moving drugs, especially at smaller and rural hospitals, solely due to low volume, especially if the data is required within 45 days, as presented above.

Plan should ensure that all rebates are paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission.

There must be a specification of what types of denials would be accepted. HRSA should also clarify the process for which it will be reviewed by them and hold themselves to reasonable and defined timeframes.   

Plan should ensure that 340B rebates are not denied based on compliance concerns with diversion or Medicaid duplicate discounts, pursuant to sections 340B(a)(5)(A) and (B) of the Public Health Service Act and should provide for rationale and specific documentation for reasons claims are denied (e.g., deduplication for MFP or 340B rebate provided to another covered entity on the same claim).  If a manufacturer has concerns regarding diversion or Medicaid duplicate discounts, the manufacturer should raise those concerns directly with OPA or utilize the 340B statutory mechanisms, such as audits and administrative dispute resolution (ADR), for addressing such issues.  Covered entities are also afforded opportunities to raise concerns with OPA if there are issues with rebate delays and denials, or any other administrative or logistical issues emerging through implementation of the rebate model.

While this is encouraging, it begs the question of what could be denied, in keeping with the statement above.

Plan should ensure that 340B rebates are only paid on sales of drugs selected under the MDPNP, regardless of payer.

HRSA should specify penalties for overstepping its authority. As noted above, manufacturers have been laying the blame for pricing discrepancies within price files with the wholesalers. HRSA should ensure that manufacturers bear the full burden of incorrect data files.

Data

All data requested as part of the Plan should be limited to only the following readily available pharmacy claim fields:

a. Date of Service

b. Date Prescribed

c. RX number

d. Fill Number

e. 11 Digit National Drug Code (NDC)

f. Quantity Dispensed

g. Prescriber ID

h. Service Provider ID

i. 340B ID

j. Rx Bank Identification Number (BIN)

k. Rx Processor Control Number (PCN)

The need to offer BIN/PCN number could disrupt contract pharmacy models with certain pharmacies, such as Walgreens, which does not share that information.

The submission of the prescriber ID will serve only to distort the data and lead to more improper denials based on unsubstantiated data assumptions. CMS acknowledged its own assumptions in the MPFS proposed rule and identified itself the limitations of relying upon the physician NPI data to identify 340B eligibility.