If your hospital is 340B-eligible, you may be missing-out on millions of dollars in prescription reimbursements. Savings and revenue which, for some hospitals served by ProxsysRx, actually make the difference between solvency and closure. Any list of Best Practices for running a 340B program starts with maintaining compliance.
Tips for maintaining 340B Program Compliance
The main reason eligible hospitals don’t avail themselves of their legal right to 340B program savings is lack of the personnel needed to ensure full compliance.
It goes without saying that the 340B program can be very complicated. Which is why most of the covered entities we serve employ full-time professionals to monitor their programs. That said, here’s a checklist of tips for ensuring compliance:
- Develop written policies & procedures detailing all of your 340B-related decisions.
- Make sure your hospital’s 340B policies are compatible with your existing policies and procedures.
- Always stay current on any information provided on the HRSA 340B database.
- Double-check your provider files — and National Drug Code crosswalks & location maps for all of the pharmacies in your network — for accuracy.
- Review & Update your 340B policies and procedures on a regular schedule.
- Utilize custom-developed 340B software, to ensure that your billing-unit (and other mapping-function) information is always up-to-date.
- Give your providers and support staffers complete information on 340B program regulations, and how those regulations work with your hospital’s existing policies & procedures.
- Conduct regular inventory-management and tracking-procedure checks, to ensure compliance.
- Make all necessary efforts to prevent duplicate discounts, or double-dipping. (More on that topic shortly).
- Establish a Governance Committee to meet regularly and review your 340B program.
- Conduct regularly-scheduled internal audits of your health system’s 340B program.
Avoiding 340B Double-Dipping
Under 340B drug pricing regulations, eligible providers may not apply for 340B discounts and Medicaid drug rebates for the same drugs — which is commonly called Double Dipping. Needless to say, it’s important that you have compliance mechanisms to prevent the practice.
Understanding patient eligibility, and who qualifies for 340B
Patients prescribed 340B eligible medications must have already received health care services (other than medications) from your health system. What’s more, those patients must have received health care services from one or more health care professionals who A) are employed by your health system, or B) provide health care services to patients under your responsibility (for example: A provider serving your health system’s patients by referral).
Knowing which drugs are eligible AND worth claiming for 340B discounts
To qualify for 340B program discounts, a drug / prescription must:
- Be on the 340B formulary.
- Be filled at one of a covered entity’s registered 340B pharmacies.
For information on which drugs are 340B eligible, Click Here.
Optimizing (but not maximizing) your 340B program
For the 340B-eligible health systems ProxsysRx serves, we maintain a policy of optimizing 340B savings that’s aggressive and conservative. In other words, we believe in aggressively pursuing 340B savings for every prescription that’s worth pursuing. However, the simple truth is that the market-price of many prescriptions is too low to justify the time-and-energy investment needed to generate what amount to only nominal savings.
A fully-optimized program results in net savings on every 340B-eligible prescription claimed.
Dispensing 340B prescriptions through your in-house retail pharmacy
Any retail pharmacy located on your health system’s primary campus (which is also reimbursable on your Medicare cost report) is eligible to purchase and dispense 340B-discounted drugs for its outpatients.
You can also extend 340B eligibility to offsite, contract pharmacies if they meet HRSA’s requirements. (More on contract pharmacies later).
Managing a well-run bedside prescription delivery program
A well-managed bedside prescription delivery program is more than a tangible sign of your system’s mission of caring for the individuals you serve. It’s the first step in ensuring that your patients follow their medication protocols after they’ve left your care.
In general, health systems lack effective Meds To Beds programs because of the costs to staff and administer them. Which is unfortunate, since (in our experience) those costs are always more than offset by the additional revenue a good program generates. Just one example: In just 12 months at a single Mississippi health system, ProxsysRx filled over 18,000 discharge prescriptions. During that time, the health system’s pharmacy revenues increased 125%, and its readmissions were reduced by 79%.
Here’s how a good Meds To Beds Program works: First, it’s critical that your retail pharmacy staff is willing to partner with your case management teams and providers in developing and implementing a medication treatment plan for patients who transitioning from your health system back to their homes. It’s also important that the program places no additional time-and-effort burdens on your hospital’s providers, nurses and staff.
Next, when prescription medications are delivered bedside to discharging patients, there should be pharmacists available to discuss, with patients, their medication protocols — as well as any issues that could compromise their willingness (or ability) to maintain compliance with those protocols, after they are discharged.
After patients are discharged, your Meds To Beds program should turn-over the job of continued patient contact, for at least 30 days in most instances, to your health system’s Readmission Risk Reduction program.
Creating an optimal 340B contract pharmacy network
Contract pharmacies play a critical role in optimizing your health system’s 340B savings and revenue. As a general rule, the more independent pharmacies you have serving as contract pharmacies, the more choices and convenience you offer your outpatients in filing their prescriptions.
Unfortunately, many contract pharmacies cost hospitals more in fees than they generate in 340B savings and revenue. At the same time, when pharmacies are located too far from patients, there is no real convenience offered to them when refilling their prescriptions.
At ProxsysRx, we’ve helped many health systems replace pharmacies generating low 340B match rates, with nearby pharmacies that have much higher match rates. In the process, we’ve helped those health systems generate significantly better 340B savings from their contract pharmacy relationships.
Contracting with specialty pharmacies for 340B prescriptions
Specialty pharmacies offer 340B-eligible entities the potential for generating significantly increased savings. Which, in turn, significantly increases the entities’ ability to pass-along those savings to patients in need. 340B-covered entities can acquire many specialty drugs for as little as 1¢. That happens when an eligible drug has reached its 100% Medicaid rebate cap.
For instance, Humira, the top-selling drug in the U.S., hit the rebate cap in 2016. Since that time, 340B hospitals have been able to buy Humira, and many other specialty drugs — including Epclusa, Harvoni, Imbruvica, Iressa, Gilenya, Revlimid and Stelara — at significantly-reduced prices.
That said, insurance companies determine which specialty pharmacies can dispense 340B-eligible specialty drugs, so you need to know a specialty pharmacy’s insurance relationships before contracting with it for your own 340B program.
Avoiding common 340B contract pitfalls
In our experience, there are three key pharmacy-contract pitfalls you should avoid:
- Processors who charge on a per-claim basis, working in tandem with high-volume pharmacies. Situations like that can generate prohibitively-high transaction fees for your 340B program.
- Contract pharmacies with highly restrictive replenishment policies. Many pharmacies unilaterally pick and choose which medications in your program that they’ll approve for 340B discounts.
- Poorly-located pharmacies offering very few of your patients convenient access.
Being aware of common TPA 340B data mismatches
One of the most frequent causes of TPA 340B data mismatches is inconsistency in Date Of Birth from one entry to the next. Another routine cause for misqualifications is mismatching of patients’ names. For example, a patient registered as “Jim” in a hospital’s pharmacy system may be registered as “James” at the hospital.
Not surprisingly, the likelihood of flawed data submissions increases with the complexity of an entity’s 340B Program (particularly if the health system’s program includes multiple EHRs, child sites, clinics, TPAs and Pharmacies). All of which can lead to missed 340B savings opportunities — sometimes substantial savings opportunities.
The more TPA relationships a covered entity has, the higher the likelihood for human error from the entity’s staff. Every TPA’s software system has a different interface, and when 340B administrators have to work in multiple systems, with multiple interfaces, that can easily lead to data entry mistakes.
For even more 340B best practices, tips and guidance —
— contact Howard Hall. C: 214.808.2700 | howard.hall@proxsysrx.com
