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Now here's the episode. - This is Scott Becker with
the Becker Healthcare Podcast. Thrilled to be joined by
three 40 b expert Joshua free. Josh is the president of NCO Advisory. He's gonna talk to today
about a couple recent changes to the three 40 B program, or issues related to it, big issues because three 40 B is so
important to health systems and their finances and so forth. Joshua, let me take it away. Lemme ask you to introduce yourself and then tell us about
a couple of the changes or issues you're watching
with three 40 b uh, policy. - Yeah, yeah. Thanks for having me, Scott. I'm glad to be here and, and
chat about this a little bit. Um, so as you, as you said
already, uh, I'm Josh free. I, I spend a lot of time
in the three 40 B space. Um, I'm a pharmacist. Um, my background as a
pharmacist has taken me to, uh, all sorts of different ventures,
um, from retail pharmacy to long-term care to
hospital health system. I've been a chief pharmacy officer. I've been a health
system business director, and, uh, uh, really got deeply involved in
the three 40 B program, um, in my health system career. Um, kind of left that world and, and started a consulting
company really just as I saw organizations
struggling with, uh, complex pharmacy projects. You know, the three 40 B program
at large is, is complicated and there's a lot of strategy involved. And then there's, there's
related optimization of that program that I just saw a need for. Um, things like, um,
using clinical pharmacists and pharmacotherapy clinics. You know, should we, should
we be operating an infusion center, a specialty pharmacy,
all of those kind of things. And so I, I set out to, um, just help optimize those sort of programs. And, and really the thing I'm
really passionate about is, is having great pharmacy leadership and, and for these organizations
for their pharmacies to be financially sustainable revenue generating strategic assets. And they're not always looked at that way. So three 40 B optimization
is one great way to do that. - No, thank you. And
people talk about it a lot and it's very important. And, and take a moment and tell us about a couple
of these most recent issues that have you, uh, that have moved forward with three 40 p. What's going on there? - Sure. Yeah, there's,
there's a few of 'em and certainly not enough time
to, to touch on all of 'em. But the, uh, um, you know, the
contract pharmacy, uh, kind of stalemate is ongoing and there are are, um, uh,
uh, lawsuits still pending. We're waiting to hear from the
DC Circuit Court of Appeals and the Seventh Circuit Court of Appeals. So there's been these challenges,
uh, to covered entities around contract pharmacy
relationships, um, where value that they get when a, when
an outside pharmacy, uh, essentially acts on their behalf to take care of their patient. That's been severely
limited for a few years now, so we're waiting on court rulings there. Um, but the, the really more recent stuff that's been really impactful
is HRSA made some changes to how covered entities, uh,
implement child sites. And then another really big
one court ruling that came out, um, just, uh, just within
the last couple weeks here was a lawsuit, uh, related
to Genesis Healthcare that changed the definition of a patient for three 40 B covered entities. And, and that's the one I
really want to focus on, is we've been waiting on that ruling for a little while here. Um, and it really, I can't,
can't overstate how much this, this is a, a kind of a seismic shift in how covered entities will
go about, um, implementing and operationalizing
their three 40 B programs. - Tell us what that will
mean for three 40 B programs for hospitals and three 40 B. - Sure. Yeah. So, so there's
a, there's a historical process that's kind of been adhered
to over the 30 plus years of, of the program where covered
entities sort of, um, qualified encounters for three 40 B and drugs for, uh, three
40 B patients on sort of a prescription by
prescription basis, meaning that if they, if they
initiated that prescription, then they could dispense three
40 B drug to that patient. And the problem is the law
doesn't really say that. Um, there had been some
different pieces of, of guidance over the years from
hrsa, um, kind of explaining how they would audit this. Um, but with Genesis Healthcare, what, what really happened was
Genesis had taken a position that presumably they felt
aligned with the statute, um, which said that we are allowed
to dispense three 40 B drugs to our patients. The law doesn't say anything about who initiated the prescription. And, and although operationally, that's how people had been doing it, and, uh, Genesis took
a different position. Um, there was a se series of events and, and, um, where they were
removed from the program reinstated, but told to comply with her HRSA's definition of this. And ultimately it ended up, um, in a, in an appeals court get
sent back to district court. And we just got that ruling and, and basically the court, um,
said, you know, hey, the, the, the law doesn't say anything about who initiated the prescription. The law says if you are a
patient of the covered entity, the covered entity can, um,
purchase three 40 B drugs and distribute to that patient. Doesn't matter where they
got that prescription. And so you gotta think
about what this really means for covered entities is it
really changes, uh, their, the strategy on and your three 40 B policy on who do we consider to be our patient? And unfortunately, the, the
law doesn't define patient. And so in the ruling,
the, the court, uh, right, I think really did an interesting,
really good job of, of, of explaining, well, the law
didn't give us a definition, so we're left with, well, what's the common understanding
of the word patient? There's a lot of different
ways you can interpret it that, and that's where covered entities need to consider their policy and, uh, and, and what they wanna do with this. So if you are an FQHC,
like Genesis Healthcare, or if you're a hospital that has hospital-based primary care, with these ongoing patient relationships, it really gives you some more latitude to carve things into your three 40 B program, even if you aren't the one that
initiated that prescription. So long as you're gonna make the case that that's our patient. So in primary care, it's kind
of, uh, a little easier to do and you can kind of logically get there. Where covered entities really have to spend some time is thinking
about, well, what, what if, what if our relationship with the patient was more
incidental or one-off? What if they were just discharged
from inpatient care or, or, or had a emergency
room encounter last month? Do those things count too? And that's where hospitals need
to really think about this. - So Josh, when you think
about this with this, the real con is that this could
give hospital health system a three 40 B company that uses, or system that uses three 40 b
more flexibility in accessing three 40 B discounts. Is that a fair statement? Am I
understanding that correctly? - Yeah, I think in some cases, yes. I think for some covered
entities it changes nothing. But for those that want to, um, apply a, a a more broad definition of
patient, yes, I think you can, uh, have some more flexibility
in what counts, so to speak, for your three 40 B program and which patients you can
take care of under the program. Absolutely. - Thank you. And anything else
that you're watching closely that should have impact to hospitals and health systems, you
know, on the three 40 B side? - Yeah, definitely. The,
you know, the other one, um, that uh, kind of got overshadowed
by the Genesis ruling was, um, HRSA's guidance around
registration of child sites. And this one gets a
little bit complicated, but there's a, a historical
process where hospitals registering new, new off-campus
departments under the three 40 B program, the old process had to do with your Medicare cost report. And so you had to wait for it
to appear on the cost report and then register under the program, and it could cause a delay,
uh, of up to two years during the pandemic versus said, we're gonna give you
additional flexibility and just go ahead and treat
these, uh, new departments that are off campus or your
hospital, just treat 'em as immediately eligible. And then they later said, you know, that guidance doesn't really rely on the public health emergency. The law doesn't require that
Medicare cost report process. So they said this is gonna be permanent. So we were very surprised
when earlier this year, HRSA announced they we're
gonna go back to the old way. And, uh, Scott, as you know, and your listeners know, hospital projects involving
like new locations, new clinics that are off campus,
these things are years in the making right? To comply with all of the rules and regs and get the construction done,
all those sorts of things. So this really pulled the
rug out from under a lot of hospitals when hers and said, we're going back to that old process. So this would definitely blow
up people's budgets if they were gonna have a new three
40 B eligible department that now we can't register
for two years. So, um, - When they, when they push back on this, when HRSA pushes back on this,
when they push on this, is that because of pressure
from the pharmaceutical company thrives that, that, - You know, that's a great question. I I, I could really only speculate. Certainly the program has gotten a lot of attention from pharmaceutical manufacturers in recent years. You know, as, as as our drug
costs have just gotten higher and higher and higher,
the three 40 B discounts become bigger and bigger, you know, and those, those numbers
get to be eye popping. I would say three 40 B value
is, is, is, uh, not nearly as eye popping as the cost
of our drugs at large. But, but yeah, I think there
is certainly pressure on these government agencies, um, from,
from pharma who would like to pay less in three 40 B
discounts, quite frankly. So, yeah, you know, I, I
mean, I'm speculating there, but, um, I think there's
probably some truth to that. - No, thank you. And, and Josh, we've just got a moment or two left. What do people learn more about Josh free and NCO advisor, which
people learn more about you and what you do on three 40 B side? - Um, sure. Yeah, you
know, uh, certainly, uh, you can check me on my website, uh, uh, www dot NCO advisory. I, I also spend a lot
of time on LinkedIn, um, talking about this kind of stuff. So if you follow me there,
I usually have some, um, uh, some, uh, pretty snarky content on LinkedIn about the industry. Um, but specifically with NCO
advisory, you know, I mean, I'm, I'm working to
help make pharmacy a, a, a strategic asset for these systems. And, um, I do a lot of audit and compliance around
the three 40 B program. Really enjoy doing implement strategy, implementation projects, and
technical project management. That kind of stuff's on my
website and on my LinkedIn. Um, but that's, that's really what gets me excited is helping to make pharmacy services more strategic and, and more sustainable for,
for covered entities. - Josh, I wanna thank you for joining us again on the
Beck Healthcare Podcast. I always learn something.
Thank you very, very much. - Thanks, Scott. Great talking to you. - It's so important for leaders
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