McKesson Corporation · NYSE:MCK
McKesson — Investor Presentation (2018)
22 slides from McKesson's investor presentation, 2018
Slide 1: 340B Tips, Tricks and Traps
340B Tips, Tricks and Traps 340B Reform: Uncovering value in times of uncertainty Andrew L. Wilson, PharmD, FASHP Vice President, 340B Solutions McKesson Corporation
Slide 2: Agenda
Agenda • Welcome • Using business analytics to forecast program changes • Leveraging revenue cycle integrity and analytics • Sharing top customer practices and policies to support your 340B program • Q&A 2
Slide 3: Program speakers
Program speakers Andrew Wilson, Kevin Scheckelhoff, Craig Dolan, RPh, Christopher Shain, PharmD, FASHP RPh, MBA PharmD, MBA PharmD, BCPS Vice President Assistant Vice President Vice President Assistant Vice President 340B Solutions 340B Solutions RxO Advisory Services 340B Solutions McKesson Corpora
Slide 4: Using business analytics to forecast program changes
Using business analytics to forecast program changes Kevin Scheckelhoff, RPh, MBA Assistant Vice President, 340B Solutions McKesson Corporation
Slide 5: Impact of OPPS regulation
Impact of OPPS regulation Effective January 1, 2018 • Medicare to pay ASP – 22.5% (as opposed to ASP + 6%) for certain drugs part of OPPS • Addition of CMS modifiers (“JG” and “TB”) indicating 340B acquisition • Applies to drugs with status indicator “K” • Applies to DSH, RRC, non-rural SCH 5
Slide 6: OPPS analytics methodology
OPPS analytics methodology Conduct an NDC to Access current period OPPS HCPCS conversion reimbursement tables Conduct a purchased package Create a “+6%” and a to HCPCS quantity conversion “–22.5%” comparison Segregate “K” drug items Assess results, evaluate patterns 6
Slide 7: Leveraging revenue cycle integrity and analytics
Leveraging revenue cycle integrity and analytics Craig Dolan, RPh, PharmD, MBA Vice President, RxO Advisory Services McKesson Corporation
Slide 8: Are you leaving money on the table?
Are you leaving money on the table? Missed cash collections can hurt your bottom line Common responses to projected revenue decrease: An often overlooked option: Decrease costs Increase revenue Cut drug budget Change formulary agents Reduce or eliminate annual raises and travel budget Reduce staffin
Slide 9: 340B "K" Drugs Reimbursement
Medicare OPPS 340B “K” Drugs Reimbursement (Hospital – Any Town USA) 2017 30% How revenue programs help 2018 Process Improvements
Slide 10: Revenue recovery by major payer
10 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $500,000 $0 $3,500,000 Medicare Managed Care Medicaid Horizon Blue Cross Managed Medicare No Fault Other Blue Cross Life or Auto Ins Listed As Payer Managed Care Other Medicaid Champus Horizon Mercy United Healthcare Oxford Aetna Revenue reco
Slide 11: Revenue recovery claims by major payer
Revenue recovery claims by major payer Other Blue Cross 5% No Fault 6% Managed Medicare Medicare 6% 50% Horizon Blue Cross Managed Care 6% Medicaid 18% 11
Slide 12: Pharmacy revenue solutions
Pharmacy revenue solutions Bill/Claim EOB/Payment (837) (835) RxO revenue algorithms Reimbursement flags Process flags Quantity flags • Below Minimum Expected Payment • Invalid and/or Expired CPT Code(s) • 835/Billing Quantity Outside Normal Range • Delinquent or No Insurance Payment • Non-Formulary
Slide 13: Data integration challenge
Data integration challenge GPO Product WS Product Catalog PAS Charges 837s Catalog WS Purchases NDC Crosswalk CDM 835s 340B Product Rx Disp/Admin ASP HCPCS Catalog Direct Purchases 13
Slide 14: Data and technology
Data and technology Revenue Service Team Pharmacy Patient Claims/Billing • Pharmacist SMEs and 340B Accounting • Revenue Reimbursement Analyst • Insurance Reimbursement Analyst • Analysis of Identified Opportunities Secure SaaS Import Wholesaler and Engine Purchasing Review Patient Clinical Evaluate
Slide 15: Key learnings from missed opportunities in 340B programs
Key learnings from missed opportunities in 340B programs Chris S. Shain, PharmD Assistant Vice President, 340B Solutions McKesson Corporation
Slide 16: Agenda
Agenda Recent and common observations affecting program compliance and performance: • ADT feed technical errors • GPO prohibition and drug diversion violations • Hidden 340B savings opportunity 16
Slide 17: Hidden 340B savings
Hidden 340B savings UTILIZATION PURCHASES NDC Description NDC Pct PHS Pct GPO Pct WAC Pct PHS Pct GPO Pct WAC Spend Total CATHFLO ACTIVASE 2 MG VIAL 1 EACH 50242004164 27.0% 73.0% 0.0% 15.4% 1.8% 82.7% $287,733 HERCEPTIN 440 MG VIAL 1 EACH 50242013468 100.0% 0.0% 0.0% 89.9% 0.0% 10.1% $230,800 AVAST
Slide 18: Admission, discharge and transfer feeds
Admission, discharge and transfer feeds • Valuable method to align 340B dispensing data with clinical and financial EHR data • Post-implementation audits have revealed: – Software vendors misinterpreting ADT segment dates/times (OBS ≠ Inpatient) – Effective dates versus system dates – “ADT is standa
Slide 19: Pharmacy supply chain: GPO prohibition and drug diversion
Pharmacy supply chain: GPO prohibition and drug diversion • Controlled substances • Supply/materials management • Policy misalignment – Covered outpatient drug exception policy – Software settings (NDC list) • Separate 340B inventories 19
Slide 20: Acknowledging both current political noise and realized policy impacts
Acknowledging both current political noise and realized policy impacts to the 340B program, one truth continues to persist. The program steadily increases in complexity, requiring additional healthcare resources to maintain performance and program integrity. That responsibility falls to many in this
Slide 21: Q&A
Q&A MCKESSON
Slide 22: Thank you!
MSKESSON Thank you!