This is part 4 of our latest Webinar Rewind, “Don’t Get WAC’d: Minimizing WAC Exposure for DSH and PED hospitals” with experts Larry Crowder, Cervey’s Senior Director of 340B Solutions, and Stephanie Dyer, 340B Program Analyst at Children’s Healthcare of Atlanta. Crowder and Dyer participate in a Q & A session following the webinar.
Question:
If you are new to 340B and already have GPO purchased medications do you have to still make a WAC purchase?
Answer:
Larry Crowder:
“That’s a very good question. It is true that when you first register as a 340B eligible hospital, let’s say that you go live January 1st, anything that you already have in your inventory is considered neutral inventory. There is a practice of folks buying up on the GPO account just to be prepared for that first day, but they do not make you repurchase your whole inventory at WAC. Anything that you have in your inventory is neutral inventory. There is a possibility that you could accumulate something and use it all in the outpatient area, for instance, and not have that initial WAC purchase but it’s not common. It’s not common. And, like we talked about, during the process of reordering when you start to run low on a package and you have to reorder it you haven’t, technically, dispensed the full package before you’re reordering. In addition to that, if you’re splitting between inpatient and outpatient use, in that package, then you may have to reorder a second time. There’s definitely things that will happen when you order on the WAC account.”
“I will say this, there’s been some folks out there who talk about maybe this one WAC purchase model and I have not seen anything to tell me that that is a compliant model. The one WAC purchase model would be that we buy one package at WAC and then from then on we never buy at WAC again. And I have not seen anything to indicate that that would be a compliant model because of these other factors.”
To learn more about entities that are eligible for the 340B Drug Pricing Program, check out our 340B Basics Webinar: Part 2 here.
Question:
Where would the best place be to get the new items report?
Answer:
Larry Crowder:
“Another good question. Stephanie we didn’t mention this but some of these reports may not be from your TPA. So you’re actually getting the new items report, I think, from your wholesaler, is that correct?”
Stephanie Dyer:
“Yes.”
Larry Crowder:
“So the wholesaler, sometimes, comes into play here. If they can send you the report of anything that you bought that was for the first time you’re buying it, from the previous day, then that is something I think Stephanie you use weekly to look at? Or daily, right?”
Stephanie Dyer:
“Yes, they send it every morning from the day before’s last order.”
Larry Crowder:
“And that’s an auto report that comes to your email?”
Stephanie Dyer:
“Yes. It comes to my email, the buyers’ email, and the barcoding tech’s email.”
Larry Crowder:
“So there are some reports that you can use from your wholesaler. And I think purchasing kind of goes along with that too, that if you’re looking at your WAC purchases obviously you can get some of that in the software because they have these savings reports and they show you, but you can also get some of those reports from your wholesaler as well.”
Question:
Do you look at GPO excess dollars spent against total spend for benchmarking WAC? And do you have goals and targets for WAC?
Answer:
Larry Crowder:
“We do this report, it’s called the WAC Impact Percentage report. Every account is unique, so you might have accounts that, for instance, carve out Medicaid and so your WAC spend is going to be higher than another account that’s the same size, same type of facility, that does not carve out Medicaid.”
“You have to take those considerations into account, but typically what we would do is we would send our customers this report that took the net savings and divided it back into the gross savings of 340B. Essentially the net savings, or the savings after you consider the WAC losses, and we would divide that back into the original 340B savings amount, the gross savings amount. We wanted that percentage to be higher than 90%. If customers were, let’s say, less than 80% then they would basically be on our list of, “Let’s go talk to them and just make sure that these items that are costing them the most in the WAC spend are set up correctly in the software and they’re good to go.”
“We found a pretty big impact on doing that with our accounts and our customers actually all are getting in that 90% range or a lot of them were listening as we brought that back to them and they were reviewing those things.”
To learn more about the WAC Impact Report (DSH/PED), explore our 340B for Covered Entities & Manufacturers Webinar: Part 2 here.
Stephanie Dyer:
“Well looking at the GPO excess dollar spend I’m not sure how we would do that without utilizing all of our accruals and going into WAC. I don’t look at that, I look at what Larry was mentioning, is that we look at the total 340B savings for that week, our WAC losses, and then you get the net savings and you divide, and you have the percentage of whatever that WAC was. We try to stay, 95% or above. Then overall, for an annual goal, we used to have it, I think, at 120 or 150 thousand dollars in losses, or 150K in losses. Now, since we’ve been managing it for the last eight years but within the last five years, both buyers have really taken responsibility in this and their WAC percentages have been 98% or above the whole year. So we’re really pleased with the way they’re running things now.”
Question:
Could you expand on the one WAC purchase model?
Answer:
Larry Crowder:
“I want to be really clear what I mean by the one WAC purchase model. This is something that has come to our attention and this is where people tend to want to use it. If you have, let’s say for instance, an outpatient area that’s 99% eligible outpatients but that 1% is not eligible, we’ve seen folks that say, “Hey, why don’t we just purchase one at WAC and then make sure that we have that one WAC purchase, and everything else we’ll purchase at 340B.” It’s not the typical model of letting it accumulate and then splitting it to 340B once you hit a package. Like those instances that Stephanie mentioned, where you’re going to buy that bottle before you have a full package accumulated, you’re going to have to buy it at WAC again before you get the full package accumulation to be able to buy at 340B. That model I have not seen where it’s foolproof. So you can certainly go to HRSA and try to get permission to do something like that, but I haven’t seen where it’s foolproof.”
“It’s definitely not foolproof in the mixed use area. So if you’re saying, “Hey, I’m only going to buy each item one time at WAC and then the rest of that time it’s either GPO or 340B,” that model is not a compliant model because there are instances where you’re going to have to buy at WAC, it’s just necessary to buy at WAC. I’ll give you an example. If you live on the Gulf Coast and you deal with hurricanes, if you have a hurricane in the gulf and you want to order up, you’re going to be ordering up those NDCs without any kind of dispense history to backup buying on GPO or 340B. So that’s going to be a necessary extra WAC purchase, to have those items in stock, because it’s beyond what you typically use.”
“And the same thing, obviously, if you’re using just your day to day and you have the package, and you’re down to 10 pills less than a bottle but you need to reorder it to have it for the next day, you’re going to have to order that at WAC until that bottle reaches the full package of 100 pills and then you can order it at GPO or 340B.”
“I have not seen an instance where that one WAC purchase actually works in those scenarios. If you’re doing just the one WAC purchase and you have a hurricane in the gulf, and you’re ordering up, does that mean you’re going to order everything at GPO? Are you going to order some things at 340B? What data would you have to back that up in an audit, that you were able to order on those accounts? So that’s what I’m referring to.”
Question:
Would you agree if you increase the percentage of prescriptions as e-scripts this could help minimizing dispensing unnecessary WAC purchase prescriptions?
Answer:
Larry Crowder:
“The nice thing about e-scripts is obviously it’s digital and you know exactly who the patient is, and the doctor who wrote the script, so everything. Typically, that’s in line with contract pharmacy or your outpatient pharmacy, so that will reduce your WAC purchases. But when you’re dealing with contract pharmacy you don’t really have WAC purchases on contract pharmacy. If you’re sending out e-scripts for your independent retailers that you’re partnering with in contract pharmacy then that might increase your ability to get 340B purchases but it’s not going to have any effect on your WAC, because you don’t have a WAC account when dealing with the contract pharmacies.”
“In your mixed use area, of course, if there’s methods for getting data in there accurately in real time or quickly then that will decrease your WAC purchases and increase your 340B savings.”
Question:
Can you give an example of a report that you’ve used to track WAC impact on monthly 340B savings?
Answer:
Larry Crowder:
“Yeah. So that’s what I mentioned earlier, that WAC Impact Percentage. That is a great report. I think Stephanie still uses it today. She mentioned that you basically take the net 340B savings, divide it by the gross 340B savings, and you get a percentage that way. I always say that you want to be at least 90% or higher for those, which basically means that WAC impacted your savings about 10%, your WAC purchases impacted those 340B savings.”
Question:
Is it compliant to have a one WAC purchase model in which the covered entity buys exclusively on GPO or 340B after the initial WAC purchase?
Answer:
Larry Crowder:
“Again that’s, I think, right in line with what I was speaking about before. Let’s say you have an outpatient area, or you have an inpatient area, that’s 99% outpatient or 99% inpatient and so you’re basically buying that one WAC to account for the 1% that might come through. Another way people think of doing it is they accumulate it on the WAC account, anything that’s ineligible, and then they buy a WAC purchase after it’s accumulated on that. The statute was very clear that that is not compliant to do the reverse accumulation. And I think the same thing would hold for the one WAC model, unless you get some type of approval from HRSA. I think you just want to be very careful with that because it’s not foolproof.”
“When the auditor comes one of the things that they audit is your process. They look at your process. If your process is not foolproof there’s an opportunity for something to be used, purchased on the 340B account or purchased on the GPO account and given to a patient who was not eligible to receive that pricing, for you to replenish based on that pricing. Then that will be a ding in your audit. If they feel like it’s a procedural thing it could have more of an impact on you, as far as what they ask you to do in your corrective actions. I would just be very careful with that. I would definitely talk to your legal department and make sure that you feel very comfortable before doing anything like that on the one WAC model.”
Question:
Is there an efficient way to identify the NDC that should be targeted for review when it comes to WAC spend?
Answer:
Larry Crowder:
“Stephanie I’ll let you answer after this but I will say that, for instance the TPA, they should have a report that’s a savings report. So one of the things that our customers tend to do is they’ll take that WAC loss report, there’s a report specifically just that shows the WAC losses, and they look at both quantity, as Stephanie does, and dollar amount. So you can do in descending order which items that you’ve purchased at WAC. Let’s say that in a month’s time you purchase something at WAC 10 times, that would be a red flag. Like, “Why am I purchasing this at WAC 10 straight times?” Also you can look at the descending dollar amount of losses. So if you have an item that you only purchase twice at WAC, but you lost $10,000 purchasing it, that might be an item that you want to look at as well. That would be the one report that I would key in on. Anything to add to that Stephanie?”
Stephanie Dyer:
“Yeah, that’s definitely the report we use for the quarterly audit as well, going through just pulling any WAC losses and then adding up the amount, like the quantities of times that you’ve purchased that drug, just to see which ones are high quantities and why. But going back to the one WAC purchase, Larry, I think the only thing that I can think of that you would purchase it one time at WAC and then you could purchase it either GPO or 340B was Zolgensma, from what I’ve heard from some peers.”
“As you buy the first one and then you know when the next patient’s coming in that you’re going to either have a GPO accrual or 340B accrual. It wouldn’t be something that you necessarily keep on your shelf. It would probably be something that you’re only ordering because you know a patient is coming in to get it.”
Larry Crowder:
“So if you know the patient’s coming in to get it, and you know if they’re going to be outpatient or inpatient, that would typically be you can order directly on that account for that use? You just want to keep track and make sure that that use is coming through appropriately, right?”
Stephanie Dyer:
“Yes. If you had a Zolgensma patient that first purchase is going to be at WAC and then you’re going to bill them, either 340B or GPO. Then the next patient that comes in you can buy off of whatever account accordingly. That’s what I would think. Just those items you don’t necessarily keep stock of on hand, you only buy it one time or for a patient coming in.”
“Then going back to “are there any NDCs that you necessarily look at for WAC losses?” It wouldn’t be NDCs on my report, it’s M&D numbers, and then you can grab those NDCs from there, and then go into your Epic system and see if they match up. Are you actually accruing on that NDC? And if not then you might need to update Epic or work with the buyers on either looking at purchasing what is accruing.”
Question:
Is there any way to make up for the savings loss due to an unnecessary WAC purchase without doing a credit or re-bill?
Answer:
Larry Crowder:
“Technically no. Basically when you buy something at WAC you’ve spent it at WAC, but I will give an example. Let’s say that you over purchased at WAC in the month of January, in February if you realize that that has occurred, and you fix the data issues, and now you have enough accumulations you’re going to be buying those things at GPO or 340B, wherever the accumulations resided, and you’ll be buying more of those the following month. Your January budget will have lost that benefit of the 340B or GPO pricing but your February budget will be amplified, it’ll amplify the credits that you’re essentially getting because of the GPO and 340B that you’re buying on. But technically you don’t really make up for that WAC purchase, it’s just something that you’ll end up benefiting more the next month for it.”
“Would you say anything to that Stephanie? Do you have to do credit re-bills ever, for something that was purchased at WAC?”
Stephanie Dyer:
“I would say the only things that come to mind are like the supply items. So they bought it WAC and the WAC cost was more expensive than GPO, I would ask for a credit re-bill because supply items are not in the program and it should have been purchased inpatient or GPO to begin with. So those would be the only things that come to mind when we’ve asked for a credit re-bill on a WAC purchase.”
Larry Crowder:
“And that’s a really good point because those are items that are exclusive to GPO, so if you ever accidentally purchase that at WAC the only way to make up for that is to do a credit re-bill at that point. That’s why it’s really important to catch these things early. That’s why you want to be monitoring that, because if you don’t catch those early, I don’t know what other wholesalers’ policies are but I know that after three months, especially, manufacturers do not like to do credit re-bills because of the pricing, the way it works every quarter.”
Question:
How can we use buyers to prevent unnecessary WAC purchases before they happen?
Answer:
Larry Crowder:
“This is a really good question too and it’s something that goes along with the communication of it, and it’s something that when we train we talk to buyers about this a lot. When they’re ordering, and those buyers know exactly what item that they typically use and where that item is typically used. So if they see an item that they buy all the time and they use all the time in an outpatient area, and they see when they’re going to buy it that it’s going to be on the WAC account, that’s a good opportunity for the buyer to stop and ask the 340B manager, or let them know, that, “Hey, this doesn’t look right to me. It looks like we’re about to buy this at WAC again and we use this a lot in an outpatient area.” Let them do the review and make sure that that’s an appropriate purchase.”
“If they can communicate that before they actually hit the send button . . . I know it’s really busy for buyers in that sometimes they’re buying hundreds of items and when they see something like that, but it really is a pretty big benefit to be able to communicate that immediately to the 340B manager or whoever handles looking at the data. That way that can be fixed before they actually send the order. If they don’t do that then that’s where you get in the scenario where it’s caught the next day. Someone like Stephanie would catch it the next day and then you got to do a credit re-bill or you got to send the item back all together and reorder it on the proper account. So that helps avoid those things.”
Stephanie Dyer:
“Yeah. Just them looking at the split screen before they press the send button, we definitely want them to be doing that. But that also comes through where they’ll email me, like there’s a patient coming in and it’s a brand new drug. So they’ll send a screenshot ahead of time to me and my boss, and to just say, “Hey, I’m ordering this for such and such patient,” because then we know we have to build it out in Epic.”
“But then, also, just looking at purchase or when they email me or send me a Jabber message and say, “Hey, I need to order the Inflectra,” like for example what I said before, and I know what we’ve already billed for today or yesterday and I’ll just give them a heads up, “Don’t order it today. Can you wait until tomorrow?” And then that way we don’t have a WAC purchase for something that was used in the outpatient area.”
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Looking for the rest of the webinar series? Check out parts 1-3 below: