340B Program: Time to recertify

Ensure your eligibility for the 340B Program by Sept. 10, 2014

The 340B Drug Pricing Program (340B program) is a federal drug discount program that requires drug manufacturers participating in the Medicaid drug rebate program to provide outpatient drugs to eligible healthcare organizations and other covered entities at greatly discounted prices.

The 340B program is not a prescription drug benefit for uninsured or low-income patients. Rather, it allows covered entities enrolled in the program to purchase drugs at the 340B discounted price, which is often 20 to 50 percent less than typical market prices. The program was originally introduced to ease the financial burden on safety net hospitals, which are defined as serving a higher percentage of uninsured and underinsured patients. Later, the program was expanded to include other types of covered entities, all of which must meet strict eligibility guidelines in order to participate.

According to an August 2014 RAND Report, more than 7,800 entities are currently covered by the 340B Program. If your organization is one of these, it's time to recertify your program. The deadline for 2014 recertification is Sept. 10, 2014.

Clarifying 340B: Helping hospitals, treating patients
The intent of the 340B program has always been to reduce the amount of money that eligible covered entities spend on outpatient drugs, allowing them to stretch scarce resources further to reach more patients and provide more comprehensive services. However, in recent months, the program has been under scrutiny since the Patient Protection and Affordable Care Act of 2010 expanded its reach to include critical access hospitals, sole community hospitals, rural referral centers and freestanding cancer centers.

The program is continually under scrutiny, especially by pharmaceutical companies and others who misrepresent the program's intent. Covered entities who benefit from the program confirm that 340B supports important — even life-saving — programs and services that benefit patients in their communities.

According to research by America's Essential Hospitals, a membership organization of safety net hospitals, the average member hospital operated with a negative operating margin in 2012. For these organizations, the 340B program is vital to their survival.

Regardless of the controversy surrounding the 340B program, all covered entities that intend to continue to participate in the federal program must recertify no later than September 10, 2014.

5 tips for successful recertification
The annual 340B recertification denotes that covered entities are properly listed in the HRSA Office of Pharmacy Affairs' 340B database and that they follow all 340B program requirements. Failure to recertify will result in removal from the program.    340Bcriteria

Covered entities should consult the OPA Database Guide to Recertification and follow these steps to ensure a successful recertification:

  • Make sure that the name and contact information for your organization's correct authorizing official is noted correctly in the OPA database, and confirm that your authorizing official has received the user name and password required for recertification. This information was sent to covered entities on August 6.

  • Your authorizing official will need to certify information for all parent and child sites with a current 340B ID as of July 1. Electronic recertification forms will be prepopulated based on information from CMS databases, and changes may be requested via online change request forms or paper forms, as necessary. However, do not mistake this change process for recertification!

  • Decertify locations that are terminating their participation.

  • The authorizing official for you organization will need to attest that your organization, as well as all outpatient clinics, child sites and contract pharmacies, are abiding by program requirements. Note that in past years, the attestation of the authorizing official stated that the covered entity "will comply with" all program requirements. Now, the statement reads that the covered entity "is complying with."

  • Respond immediately to any communications from HRSA/OPA to ensure the recertification process is complete before the deadline.

Lidia A. Rodriguez-Hupp is senior vice president and 340B compliance officer for Sentry Data Systems. With more than 14 years' experience in 340B software and program maintenance, and six years in various staff positions within the U.S. House of Representatives, Ms. Rodriguez-Hupp is uniquely suited for the challenges of 340B compliance. Before joining Sentry in 2004 as director of implementation, she worked as director of client service at RxStrategies, a company specializing in 340B for the FQHC market, and handled investor relations for a Florida-based communications service company as they underwent an IPO.


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