340B Vendor Decision Checklist

Purpose: Thepurposeof thistoolistoprovideadecisionchecklist for entitiestoevaluatesplit-billingsoftware. Thetool presentsconsiderationsfor anentitywhenselecting, configuring, andmaintainingsplit-billingsoftware toserveasaguidefor supportingcompliantoperations.

Overview:340Bdrugsmaybeusedonlyfor patientswho meet certaineligibilityrequirements.Many340B entitiesserveboth340Bandnon-340Beligiblepatients; therefore, theentityneedsawaytoseparate these patients’ drug transactions. Oneoptionisfor theentitytomaintaintwoseparatelypurchasedphysical inventories.For someentities, however,that optionisnot acceptablebecauseofspace,operational,and/or financial considerations.

Anotheroptionisfor theentitytochoosetooperateareplenishment model tomanageitsdruginventory.A replenishment modelusesonephysical druginventory,butenablestheentitytodispensefrom thatinventory bothtopatientswhoqualifyfor340Bandtothosewhodonot qualifyfor340B. Thismodel worksby establishinga“neutral”physical inventory,collectingdataabout eachdrugdispensedandadministered, and thenreordering thatdrugbasedontheappropriateaccumulationsfrom theutilization report.Areplenishment model istypicallyusedin mixed-useareaswhereboth340Beligibleandineligiblepatientsareserved(e.g.,a hospital’semergencydepartmentor cath lab, oranentity-ownedorcontractpharmacy). Thistoolfocuseson split-billingsoftwarein mixed-useareasofhospitals.

Tomanageareplenishment model, theentitytracksdatafeeds(suchasinpatientoroutpatientstatus,patient andprescriber eligibility,cliniclocation,Medicaidstatus,drugidentifier,andquantitydispensed)andsends thesedataintosplit-billingsoftware. Thissoftwareuseslogicbasedonconfigurations,chosenbytheentity, to virtuallyseparate340Bfromnon-340Btransactionsafter theyoccur.Thesoftwarethendeterminesfrom which accounteachtransactionshouldbereordered. The term “split billing”isused todescribethissoftware, which “splits” apurchaseorder into twoor threedifferent accounts.Thissoftwarecanhelp theentityplaceorders in appropriateaccounts, whichshouldsupport 340Bcompliancewhilestill havingonlyonephysical inventory.

Thefollowingarekeypointstorememberaboutsplit-billingsoftware:

1.Thereisnooneperfect software,astheperformanceofthesoftwaredependsonthe quality/accuracyofdataimportedtoit, theoptionsselectedtoconfigurethesoftware,andthe ongoing maintenanceof thesoftwarebythesoftwareproviderandentity.

2.Entitieshaveachoiceabouthowtoconfiguretheirsoftware, but makingcertainconfigurationsis associatedwithagreater riskofnoncompliance.

3.Theentity isultimatelyresponsiblefor program compliance; thisresponsibilitycannotbeoutsourced toasplit-billingsoftwarecompany. Theentity itselfissubject to HRSAandmanufactureraudits, soitiscriticalfor theentity to taketimetocarefullyselect, configure, maintain,andcheckitssplit-billingsoftware.

Thefollowingchecklistpresentsconsiderationsforcompliance,aswell asapproaches/options.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
InitialConsiderationsforStartup
1. Theentityis abletosupportinitial implementationcostandthe maintenancecostofthesoftware, whichwillincludethefollowing:
•Costofimplementationcharged bythevendor(requestall chargestobeincluded)
•Pharmacystaff resources requiredwiththeinitialsetup
andtheongoingmaintenanceof thesystem
•Entity’sIT resourcesneededto implementthesystem / Theinitialimplementationof split-billingsoftwarerequiresresourcesfrom multipledepartmentswithintheentity.
•Therewillbeanimplementationcostofthesoftware,whichis variable basedonthevendorselected.Askabout:
o Installationfees
o Flatmonthlyorannualfees basedonhospitalsize (i.e. number of beds)
oFeestructureforretail/contractpharmacies(per-claimcharge vs.alargerchargeforclaimsthatare340Beligible)
oExclusivityclausesthatobligatethecoveredentitytouse the samesoftwareforhospitalmixed-use340Bqualificationand contractpharmacies
•Pharmacystaffandpharmacychargemasterstaff willbeneededto providesupporttocreatethedrugOPAISandprovideconversion tablesbetweendoses,HCPCSbillingincrements,andpackagesizes. Vendorswillhaveaprocessinplacetohelp.
•TheITdepartmentwillberequiredtoensurethatlocationsarecorrectly linkedandinterfacesofthe entitysoftwarearecorrecttoprovide informationneededtoimplement.
2. Implementationof softwareshould bedoneinatimelymanner. / Implementationofthesoftwaregenerallytakes60to90daysfromthe signingofthecontract.Thetimeframeforimplementationdependsonthe vendorandthecomplexityoftheentity’sprogram.
Ifpossible,assignadedicatedandexperiencedprojectmanagertoensure adherencetotheimplementationtimeline.
Ensurethattestandproductionfilesaretransmittedtothevendorusinga securefiletransferprocess.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
3. Entityemployeesreceive comprehensivetrainingon software. / Thesoftwarevendorprovidesthefollowing:
•Abilityfortheprojectteamtoviewdataandaccumulationspriortogoing live
•Initialeducationforpharmacydirectors,pharmacybuyers,andprogram coordinators,ataminimum
•Follow-uptrainingsessionstoanswermorein-depthquestionsonce usersbecomecomfortablewiththebasicsofthesoftware
Assessadequatetrainingandtrainingtimerequirementsspecifictouser rolesandaccess.
Identifyaccesstoonlineand/orhard-copyuser manualforassistance.
4. Vendorprovidesongoingcustomer supportatnoadditionalcost. / Theamountandtypeof supportwillvaryamongvendors.Somewillbe availableonsiteintheeventofanaudittoensurethatallquestions concerningsoftwareuseareaccuratelyaddressed;forothers,this is apaid servicetheyprovide.Somevendorswillprovideextensivehelpwith reportingandtroubleshooting,whereasothersleavethesetasksuptothe entity.Thecontractshouldaddressthesearrangementsandservices.
•Askaboutturnaroundtimeforsupportrequestsandthebestmechanism tosubmitrequestsforfasterresolution(phonecallvs.online
submission)
•Thevendormayofferastrategicaccountmanager.
•Ifpossible,continueregularproject managementcallswiththevendor for1to2monthsafter going live sonewproblemscanbe resolved quickly.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
5. Softwarewillinterfacewiththe coveredentity’scurrentsoftware andentity’swholesaler. / Theentity’selectronicmedicalrecord(EMR),perpetualinventory managementsystem,billingorfinancialsoftware,andadmission, discharge,andtransfer(ADT)softwaremustinterfacewiththesplit-billingsoftware.Otherwise,additionalcostsmaybeincurredtoprovideinterfaces.
Determinethelevelof interfaceandreportdetailsneeded,suchas required dataelements,frequencyofuploadingdata,andthevendor’ssoftware interfaceexperiencewithyourEMRand withthewholesalerselected.
Determinewhetherthevendoraccepts“flatfiles”orwantsaninterface,and whetherthecoveredentityITdepartmentwillallowaninterface.
6. Coveredentityresourcesrequired toimplementand maintainsplit- billingsoftwareareknown, present,andachievable. / TheentitymusthaveinternalITsupport,aswellaspharmacysupport,to provideongoingmanagementoftheprogramrequirementsduringthe implementationphaseand maintenancephase.Theamountof supportwill varydependingonthesoftwareandentitysize/complexity.A disproportionatesharehospital(DSH)withmorethan100 beds,for example,couldanticipate0.5to1full-timeequivalent(FTE)ofadedicated resourcewithmostsplit-billingsystems.Identifyandestablishdedicated FTEsforongoingmaintenanceoftheprogram.
Ifa reportwriteris notwithinthepharmacydepartment,aresourceperson mustbereadilyaccessibleforquestionsandcorrectionstodatafiles.
Dispensingfiles,ADTfiles,encounterfiles,andprescriberlists maycome fromdifferentdepartmentsor differentsubdepartmentswithinIT.Ensure thattheITprojectmanageris awareoftheneedforanexpertfromeach sourcesoftwarepackage.
Frequentfileuploadsintovendorsoftwarefacilitatemorerapidattainment ofafullpackagesizedispensedandminimizepurchasingontheWAC account(especiallyatfirst).Dailyfileuploadsareideal.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
DiversionPrevention
7. Datafeedandlogicareinplace todeterminepatientstatusand locationthatareconsistentwith the340Bpatientdefinitionand aretrackable. / EntitiesmostoftenuseadatafeedfromtheADTsystem,whichincludes thepatientidentifier,atimestamp(whichshowsthatatthespecifictime the drugwasordered,dispensed,oradministered,thepatientwasinan inpatientoroutpatientstatus[includingobservationpatients]),anda locationcode(whichshowsthatatthetimecaptured,theparticularpatient wasreceivingservicesinaspecificclinicorlocationwithinthehospital). Evenifthehospitalhasbar-codescanningthatcapturestheNDCon administration,mostEMRsaresetforNDCstohaveaone-to-many relationship,withoneNDCbeingtheprimary.Somesystemshavedata comefromtheirbillingsystem,whichconvertsthechargecodetoaBV codeforCMSJ-codedrugs.Thisresultsintheaccumulationbeingtiedto oneNDC.TheNDCspurchasedmustbecorrectlylinkedtotheCDMand theCDMconstantlyupdatedtoassurecorrectaccumulationofproductsin thesplit-billingsoftware.
Theentityneedstofullyunderstandthefeedsthatgenerateaccumulations in regardto:
•Whenthe accumulationis generatedatdischargeortime ofmedication dispensation
•Quantityfieldin relationshiptobillingunit
•Allthedifferentpatienttypestogroupintoeitherinpatientoroutpatient status
Forhospitaloutpatientareasthathaverecentlybecomeproviderbasedbut arenotyet340Beligible,orforareasthatusethehospital’sbillingsystem butarenot340Beligible,opttosuppressthoseareas’dispensespriorto sendingthedatafilestothevendorratherthanrelyingonthevendorto suppress.
Determinehowthevendordealswithduplicatedata(e.g.,datasupplied duringtestingandagainduringproduction).

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
Understandhowdrugchargesaresetupinthebillingsystemandconfirm thatthebillingunits matchthe“build”unitssetupinthe accumulator.
Examples:
•EnsurethattheCDMitemis tiedcorrectlytotheactualdispensedsize (e.g.,enoxaparin30 mgchargeis linkedtoenoxaparin30mgNDC and 40 mgis linkedto40 mgNDC).
•EnsurethatthedataforaJ-codeitemcorrectlyinterfacestothe accumulator,accountingfortheCMSbillingunit,tobuildaccumulation fortheproductdispensed(e.g.,allenoxaparinchargesarebilledby multiplesofa10 mgchargecode).
8. Providersoftheentitywillbe identifiedaccurately. / Theprovidersoftheentityareemployed,undercontractualagreement,or otherarrangement.A feedistypicallysentfromthecredentialingofficeto thesplit-billingsoftwaretoaccomplishthis.
Thesoftwarewillidentifytheprovidersandthelocationofpatientencounters todeterminewhetherthepatientdefinitionisfollowed.
Somevendorsacceptonlyalist ofproviderswhopracticeonlyin340B- eligibleareas(i.e.,100%providerlist),whichmaylimit340Bqualification, especiallyifnotusedwithanencounterfile.
Somevendorsacceptalist ofproviderswhoare100%340Bandanother list ofproviderswhosometimesworkin340B-eligibleareasandsometimes donot.
Thebestpracticeis tocombineaproviderlistwithanencounterfile.Cross-referencingtheproviderlistwiththeencounterfilewillscreenout“curbside” consultsforfamilymembersandhospitalemployeeswhodidnotattenda bonafide340B-eligibleclinicappointment.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
Forentitiessubjecttotheorphandrugprovisions,acodematchis desirabletodeterminewhetheradrugis beingusedforthereasonthe patientwasseenbytheeligibleprovider.
9. Locationofthepatientencounter willbeaccuratelycapturedinthe software. / AccuratelyidentifyeligiblelocationsregisteredontheHRSA OPAISor withintheentity’sfourwallsofaparentsite.Mostsystemsaccomplishthis byafeedfromtheEMR.Confirmaccuracyofthe electronicfeed.Donot simplyrelyonlocationasthequalifier,asnon-eligiblepatientsmaybeseen inalocationthatshouldbe usedforalleligiblepatients.
Cross-referencerevenuelocationswithHRSA-registeredchildsites.
EnsurethatITcanidentifyareaswithrevenueredirectionandwritequeries toensurethatthoseareasappearindispensingreportssenttosoftware vendor.
10.Thesystemcansupportproper accumulation,inalignmentwith theentity’sdefinitionsofcovered outpatientdrugs. / Keepingthestatutorydefinitioninmind,HRSApermitstheentitytofurther definetheterm“coveredoutpatientdrug.”HospitalssubjecttotheGPO Prohibitionareabletobuynon-coveredoutpatientdrugs viaa GPO, pursuanttothedefinitionestablishedbythehospital.
Confirmthatthevendorsoftwarehasfunctionalitytonotaccumulatenon- coveredoutpatientdrugsfor340Breplenishmentwithdocumentedaudit trailandrationale.
11.Thesystemsupports accumulationbasedonactual usageofaproducttothepatient level. / Somesystemsareunabletosupportanauditablemechanismthatcan showthepreciseamountsgiventoindividualpatientsreceivingproducts suchasanesthesiagases.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
DuplicateDiscountPrevention
12.Payersourceis identifiedto accuratelyreflectMedicaid patientsandtheintentofthe entitytobillforthepatients. / Thesoftwareisconfiguredtosupportthe MedicaidExclusionFile(MEF)-reporteddecisionoftheentity.
SomesystemshavetheabilitytoidentifyMedicaidasthepayerforany partofaclaim(e.g.,secondaryortertiary)andexcludefromaccumulation whentheentityhaselectedtocarveout.
Somesystemscannotaccountforcarve-inandcarve-outfordifferentsites atone340Borganization(althoughHRSApermitsthis).
Asmandatory“carvein”existsforsomestates,theentitymustrefertoits localstaterequirements.
Ensurethatthesoftware’sdefaultforMedicaidforcontractpharmaciesis alwayssetto “carve-out.”
OtherOperationalConsiderations
13.Accumulationandreplenishment shouldusean11-digitNDC matchasthestandardprocess. / SomesystemsdonotrelyonanNDC match;rather,they make assumptionsbasedonacrosswalktothechargecodeandsometimesuse recentpurchasinghistoryto improveonthatguess;andthey maynotbe compliant.
Othersystemsallowtheentityto routinelyconfigurethesystemtoa 9-digit orlessNDCmatch,whichdoesnotmeetHRSA’scomplianceexpectations.
14.Thesoftwarehandlesshortages andproductsubstitutionsby addingnewNDCsand accumulatingonthenewproduct. / SomesystemsallowaccumulationstobetransferredtoanewNDC(which is noncompliant),whereasothersystemsrequirenewNDCstobeginanew accumulation.
SomesoftwarewillidentifywhenanewNDCwiththesamegeneric sequencenumberis purchasedandpromptthesoftwareusertomakea decisionaboutwhetherthenewNDCis apermanentchangeorjusta temporarychangeduetoashortagesituation.
SomesoftwarewillhaveabegindateandenddateofusageofeachNDC numberpurchasedforthesamegenericsequencenumbertoallow sequentialqualificationofdifferentNDCnumbers.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
15.Softwareshouldaccommodate twoorthreeaccountsbasedon theentitytype. / EntitiessubjecttotheGPOProhibition(DSH,PED,CAN)needtohave threeaccounts:GPO(inpatient),340B(eligibleoutpatients),andnon-GPO/WAC(ineligibleoutpatients).
EntitiessubjecttotheOrphanDrugExclusion(CAH,SCH,RRC,CAN)
needtohavetwoaccumulators:GPOand340B.
16.Theterminalaccount(default account)shouldbesettoanon- GPO/WACaccountforentities subjecttotheGPOProhibition. / Theterminalaccountofthesoftwareis adefaultaccountusedtoorder drugswhentheentitydoesnothaveenoughaccumulationintheGPOor340Baccountstopurchaseadrug.
ForhospitalssubjecttotheGPOProhibition,initialpurchasesofadrug, increasesinparlevels,andMedicaidcarve-outmustbesettoWACina340Bregistered,mixed-useareausinga replenishmentmodel.
17.Ifanerror/noncomplianceis detectedthatinvolvesthesplit- billingsoftware,asystemis in placetocorrectandkeeprecord ofthe modifications. / Somesystemswillallowentitiesto “gonegative”tocorrectfor340B
purchasesthatshouldnothavebeenmade;thisis notHRSAcompliant.
Somesystemsallowtheusertokeeprecordsofwhenadjustmentsare madeandwhy.Somesystemsfacilitatereclassificationwithout transparencytothemanufacturer.
Somesystemswillnotallowbuyersinmixed-useareastobuygreater quantitiesonthe340BorGPOaccountsthanareintheiraccumulators.
Largenegativeaccumulationsmayindicatepurchasesgreaterthan accumulateddispenses,ormayindicateadiscrepancybetweenthebilling unitandthepackagesize.
Thesystemmustprovideaccessibleaudittrailtoidentifyindividualactions, systemactions,andrationale.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |

340B Vendor Decision Checklist

StandardMet? / ComplianceChecklist / Approaches/
Options / Notes
18.Requiredmanual manipulations oftheaccumulatorwillbe minimal. / Manual manipulationsoftheaccumulatorareoftenrequiredbytheentity staff whendrugsarepurchaseddirectly,purchasedthroughaspecialty distributor,notpurchasedbythepharmacy(e.g.,drop-shipped),orwhen handlingcertaincontrolledsubstances(CII).
Softwaremaybeabletoacceptelectronicdatainterface(EDI)invoices fromalternatesuppliersaswellasprimarywholesalers.
Softwaremusthaveamechanismto recordpurchasesoutsidetheEDI
mechanism(includingalternatesuppliersandborrow-lends).
19.Thesoftwarewillhavethe capabilitytoprovideadequate reportsforauditingof accumulationsanddispensations forcompliancewiththe340B Program. / Reportstypicallyenabletheentitytoaudittheaccumulatorforthe following:
•Comparedrugpurchasedwithdrugsdispensedtoallinpatientsand outpatients.
•Patienteligibilityshouldincludeproviderandlocationofservice.
•AuditforadditionofnewCDMsandnewNDCstoensurecorrect mappingofthedrugstoallforappropriateaccumulations.
•Reviewmultipliersthatwill beusedtopurchaseappropriatepackage sizeversuschargecodesusedinbilling(e.g.,amultiplierof10is neededforinfliximabthatisbilledinunits of10 mgbutpurchasedin units of100mg).
Thesoftwarevendormaysendoutanannual auditreviewreport.A summaryofallfilters,datareports,payors,providers,specialrules,and otherindicators isprovidedsothattheentitycanreviewdatafor accuracy.Thevendoressentiallyassistswithidentifyingpotentialareasof liability.
20.Thesoftwareclearlyaddresses optionsforhandlingofmulti-dose productsformultiplepatients (e.g.,insulinvials)versusmulti- doseproductsthatareforone patient(e.g.,cream,lotion). / Thesoftwarewill accumulatemulti-doseproductsbasedontheentity’s billingpractices.Thedrugssometimesareusedformultiplepatientsand eachwillbechargedadispensedunit,ortheycanbedispensedtoasingle patientandthepatientwill bechargedforthewholeunitatonetime.

Thistooliswrittento align with HealthResourcesandServicesAdministration(HRSA)policy,andis providedonly asan exampleforthepurposeof encouraging340B Programintegrity.ThisinformationhasnotbeenendorsedbyHRSA andisnot dispositivein determining compliancewith or participatorystatusinthe340BDrugPricingProgram.340Bstakeholdersare ultimatelyresponsiblefor340B Programcomplianceandcompliancewith all otherapplicablelaws andregulations.Apexusencourageseachstakeholdertoincludelegalcounsel aspart ofitsprogramintegrityefforts.

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340B Prime Vendor Program | 888.340.BPVP (2787) | |