Insight Article 6. Ineligible patients receiving 340B drugs. Diverting drugs to those who are not 340B eligible is strictly prohibited. Yet there is often confusion over which patients do and do not qualify. For instance, many providers erroneously consider nursing home patients outpatients under 340B and assume they are thus eligible. While nursing home patients are considered outpatients in the general industry sense, they are considered inpatient under 340B and, therefore, do not qualify. According to HRSA, an eligible patient is one who meets the following criteria: ï‚· ï‚· ï‚· The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual's health care. The individual receives health care services from a health care professional who either is employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care remains with the covered entity. An individual will not be considered a “patient” of the entity for purposes of 340B if the only health care service received by the individual from the covered entity is dispensing of a drug or drugs for subsequent selfadministration or administration in the home setting. 7. Use of a third-party administrator without deference to compliance. Always keep in mind that entities cannot outsource their 340B compliance responsibilities.

Covered entities must have policies and procedures in place and are ultimately fully accountable regardless of any outsourcing arrangements. 8. Failure to register all “child” sites. Covered entities with child sites that intend to purchase or provide 340B drugs must register each one. Even if a child site falls within the “four walls” of a facility, it’s a good idea to register it anyway. That way, should the entity need to move the child site in the future, it will not have to go through the lengthy registration process—a process that can typically take six to nine months, and even up to a year, during which time revenue is lost. 9. Poor maintenance. The 340B program must be mindfully managed.

While the operational administration of the program can require additional resources such as staff time, with proper written policies and procedures as guidance, maintenance can be easily integrated into business processes. © Wipfli LLP 10. Overlooked 340B opportunities. There are several 340B savings opportunities that providers often overlook. One is direct purchases.

As 340B entities, the providers are entitled to 340B pricing regardless of the vendor. Another is non-pharmacy purchases like those made through the blood bank, central supply, and radiology (e.g., albumin, factors, Suprane, Magnevist, Tisseel, etc.). All could qualify for 340B pricing. Other opportunities include take-home or indigent drugs and drugs administered in off-site provider-based settings (e.g., seasonal clinics and ambulances), to name a few. The HRSA Horizon HRSA is in the process of drafting new formalized regulations and will release them for public comment this summer.

Among the many items expected to be addressed is the definition of eligible patient and the compliance requirements for contract pharmacy arrangements. In light of this increased scrutiny, covered entities should shore up their tracking systems, examine their audit trails, review their policies and procedures, and consider a third-party assessment. About the Author Vicki Mueller, CPA, Manager Vicki Mueller has more than 20 years of consulting experience in the health care and senior living industries. She works in a variety of health care settings including hospitals, nursing facilities, assisted living, independent living, home health agencies, and rural health clinics. Vicki provides expert advice in the areas of reimbursement, financial modeling, clinic assessments, strategic planning, Medicare enrollment, and revenue, integrity, and operations assessments. About Wipfli’s Health Care Industry Practice Wipfli’s national health care practice has nearly 100 associates dedicated to serving more than 1,800 clients in 46 states, including integrated delivery systems, large community hospitals, critical access and rural hospitals, physician practices, and senior living organizations.

Wipfli can advise in all areas of business, from finance and operations to human resources, information technology, and reimbursement. For more information, visit www.wipfli.com/healthcare. About Wipfli LLP With more than 1,500 associates, 32 offices in the United States, and 2 offices in India, Wipfli LLP ranks among the top 25 accounting and business consulting firms in the nation. For over 85 years, Wipfli has provided private and publicly held companies with industry-focused assurance, accounting, tax, and consulting services to help clients overcome their business challenges today and plan for tomorrow.

For more information, visit www.wipfli.com. 2 .