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340B Pharmacy Program. NorthSTAR Program 2005. 340B Program Overview. AKA “PHS Pricing program”, “602 Pricing”, “Veteran’s Health Care Act Program” Section 602 of the “Veteran’s Health Care Act of 1992” added section 340B to the Public Health Service Act

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340b pharmacy program

340B Pharmacy Program

NorthSTAR Program 2005

340b program overview
340B Program Overview
  • AKA “PHS Pricing program”, “602 Pricing”, “Veteran’s Health Care Act Program”
  • Section 602 of the “Veteran’s Health Care Act of 1992” added section 340B to the Public Health Service Act
  • Created as a response to increase in prices resulting from 1990 OBRA law establishing “Medicaid best practice”
  • Administered by the Health Resources and Services Administration, Office of Pharmacy affairs
phs section 340b
PHS, Section 340B
  • According to additional Federal requirements in section 340B, drug manufacturers are required to sell ‘covered outpatient drugs ’ to eligible “covered entities ” at a reduced price, which is determined using a statutory formula.
what are covered entities
What are Covered Entities?
  • Nation’s core medical safety net providers
  • Nearly 12,000 entities registered on HRSA web site
  • Federal grantees and disproportionate share hospitals
340b definitions
340B Definitions
  • Covered outpatient drugs
    • Prescription drugs, over the counter drugs that are prescribed.
    • Excludes vaccines and inpatient drugs.
  • A “patient” of a covered entity
    • Receives a range of health care services from a practitioner employed by the entity such that that entity remains responsible for the care of the patient.
    • Health records maintained by the entity.
    • Getting prescription services is not enough to make you a patient.
additional 340b issues
Additional 340B Issues
  • Duplicate Discount
    • Section 340B protects manufacturers from paying a Medicaid rebate AND giving a 340B discount on the same drug
    • Secretary was directed to develop a mechanism that States and 340B providers could use and ensure this
    • Final guidelines issued August 23, 1996 (61 FR 43549)
diversion to non patients
Diversion to non-patients
  • Section 340B makes it illegal to sell or provide 340B priced drugs to persons who are not patients of a covered entity
  • Entities are responsible for having procedures to prevent this and records to prove it
  • Does not require separate inventories
  • Subject to audit by the manufacturer or the Secretary.
340b pharmacy options
340B Pharmacy Options
  • Order the drugs; physician dispensing
  • Establish in-house pharmacy to provide pharmacy services
  • Contract with a community pharmacy to provide services
contract pharmacy alternative
Contract Pharmacy Alternative
  • Process established by 1996 HRSA guidelines (61 FR 4359, August 23, 1996)
  • Meant to encourage entities that could not establish their own pharmacies to participate in 340B
  • Allows an entity to contract with a pharmacy to dispense 340B drugs and provide pharmacy services to the entity’s patients
contract pharmacy guidelines
Contract Pharmacy Guidelines
  • One contracted pharmacy per eligible entity
  • Pharmacy must provide entity with reports “consistent with customary business practices”
  • Entity and pharmacy subject to audits
  • Entity and pharmacy must comply with all Federal and State laws
  • Does Not require dual inventory
northstar 340b phase i
NorthSTAR 340B Phase I

UTMB  ValueOptions

  • Health Care Coordination (mental health and physical health)
    • Health care screens and referrals
    • Tracking primary care
  • FDEF- Front Door Evaluation Facility
    • Gate-keeping role
    • SCID assessment
    • Additional psychiatric assessments
    • SPN clinical consultation
northstar 340b phase i15
NorthSTAR 340B Phase I


  • Contract
  • Identify Pharmacy
    • 1:1 relationship between SPN and 340B contracted pharmacy
  • Identify Office Space at SPN location
    • Tele-medicine portal
  • Identify lab order and EMR portals
    • Hardware requirements
northstar 340b phase i16
NorthSTAR 340B Phase I

Data Exchange

  • SPN populate TRAG and health screen to UTMB EMR
  • SPN is able to view data
  • EMR is sent to ValueOptions
northstar 340b phase ii
NorthSTAR 340B Phase II
  • Testing
    • Tele-medicine
    • Data exchange
  • Service provision
    • Health care screening (part of TRAG)
    • Case management coordination
    • Potential SCIDS
    • Potential additional psych assessment
    • Labs
northstar 340b phase iii
NorthSTAR 340B Phase III
  • Rx purchasing
    • 1:1 relationship between SPN and pharmacy
  • Seamless to SPN and member
  • Operationalize 1:1 relationship
  • Pharmacy benefit eligibility limited to 1 designated pharmacy
  • UTMB purchases drugs
  • PBM manages inventory and distribution in a stock replacement model
  • PBM works with wholesaler to ensure compliance with 340B purchasing requirements
northstar 340b key facts
NorthSTAR 340B Key Facts
  • All NorthSTAR providers are affected and have to do the TRAG
  • The 340B implementation does NOT affect the formulary
  • The 340B implementation does NOT affect the pre-authorization process
  • Medicaid members are not affected.
  • If the members do not go to the designated pharmacy, their prescriptions will not be filled.
northstar frequently asked questions
NorthSTAR Frequently Asked Questions
  • How will the 340B program affect the atypical waiting list?
    • The reduced cost of medications will result in better prioritization of and management of the waiting list.
    • There is a potential reduction of the waiting list (time)
  • What makes a NorthSTAR consumer 340B eligible?
    • SPN is contracted with UTMB
    • Eligibly qualified Indigent member
    • Has a current TRAG


NorthSTAR Program 2005