Industry Insights

The 340B program is designed to allow eligible Covered Entities to stretch scarce health care dollars to provide services to the communities they serve and support the uninsured and underinsured patients with options that help them afford their prescription medications.

Review Prescriptions and Capture Rate

Most participating Covered Entities might not be taking full advantage of the 340B program. A quick review of the total annual prescriptions written by providers compared to the total prescriptions captured in your 340B program can give you an idea of how well your program is optimized. This can be done by routinely reviewing key reports from your e-prescribe program and should always be done in collaboration with your 340B TPA to ensure that capture logic is taken into consideration. 

Close attention to the pharmacies in your network and the capture model used can provide valuable insight when evaluating your program. Certain chain pharmacies subscribe to the “all claims” capture model, which may increase your overall capture rate but can harm the profitability of your program. It may be beneficial to review the chain pharmacies in your network that subscribe to the “all claims” capture model separately as this can determine their value vs. chain pharmacies using other models, like “brand only” and “profit only.” When reviewing your annual capture rate, pay attention to all pharmacies where prescriptions are being filled by reviewing e-prescribe data and contract pharmacy performance. Patients can change the pharmacies where they go to fill their prescriptions over time. This review can identify additional pharmacies that should be contracted and added to your network.

Tap into Specialty Pharmacy

It's common to overlook capturing prescriptions written by specialists where your providers have referred patients for specialized attention. These referral providers are usually endocrinologists, dermatologists, rheumatologists, gastroenterologists, and others who treat specific disease states.

Since the prescriptions written by these referral providers can typically be higher-cost specialty medications, capturing these in your 340B program can add significant additional savings. Your policies and procedures should indicate that your providers are to document all referrals in the patient’s EMR record and ideally, all specialists should be sending a follow-up letter back to the referring provider. From this data and via detailed reports, you can identify which specialty pharmacies your patients are using to fill these prescriptions. Once identified, you can contract with each specialty pharmacy to be included in your 340B network.

A key part of capturing these referral prescriptions is to understand how your TPA’s technology works. Additional logic and functionality are required to bring these referral prescriptions into the technology. Most specialty pharmacies don’t use switch data but rather have a direct data feed to TPAs. Thus, more than a data pull from the specialty pharmacies needs to be done to effectively capture all the appropriate specialty claims. TPAs that capture specialty claims effectively have sophisticated referral claims technology, plus additional services that monitor capture logic, as these may need to be adjusted from time to time. It may be beneficial to allocate resources, additional TPA services, or an experienced 340B consultant to monitor referral capture — it can pay dividends for growing your 340B program.

Leverage 340B to Service the Uninsured and Underinsured

There is significant potential in building 340B programs to support uninsured and underinsured patients. Covered Entities have patients who may impact their charity care and can strain services and resources and adding an effective uninsured program can help lower the impact.

While the mission of each Covered Entity is to care for all these patients, there are specific strategies that can provide a positive impact for both the Covered Entity and its patients. Your 340B program should be fully leveraged to provide affordable medications for your uninsured and underinsured patients and to help effectively manage your charity care budget.

An effective uninsured program should have a customized sliding scale designed to meet the needs of your uninsured patients, maximize your charity care budget and have policies and procedures written and updated regularly to help your underinsured patients in times of need. A good sliding scale program will allow the Covered Entity to design a prescription plan supporting their uninsured patient population based on their ability to pay using federal poverty levels as guidelines, ability to add co-pay amounts, and more. Any uninsured patient program should include access to the lowest price prescriptions in the market (which may not always be 340B pricing). This allows each Covered Entity to stretch any subsidy amount as far as possible.

Education is also an essential part of your uninsured program to help train the medical and ancillary staff, patients, and local pharmacies on how to effectively utilize this program to improve access to more affordable medications and patient care. This education not only ensures patients receive their medications but can also improve overall patient care. Partnering with local pharmacies to assist in helping the uninsured may improve patient care and can strengthen the community.

While the 340B program can help Covered Entities stretch scarce healthcare dollars to provide services to the communities they serve, it also provides the resources to help the most vulnerable to relieve some of the burdens to the healthcare system. Optimizing your 340B program to deliver the savings to the Covered Entity is where most see value — taking care of their most vulnerable, uninsured, and underinsured patients is equally important.

 

The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

By Cary Green

Industry Insights

What is a referral prescription or claim?

Often, primary care providers will refer a patient to another provider for a second opinion or treatment diagnosis or condition that requires advanced or specialized care. Most patient referrals are to specialty providers such as endocrinology, infectious diseases, rheumatology, dermatology, etc. – and which are not directly employed by the 340B covered entity but the covered entity has established an arrangement with. These patients continue to remain under the care of their primary care provider at the covered entity. The referring provider usually makes the arrangements for their patient to be seen by the specialty provider (e.g., make the appointment) but the specialty provider may or may not always provide any notes back to the referring provider. It is best practice for these referral specialty providers to send a note or letter back to the patient’s primary care provider, summarizing their diagnosis and treatment plan and any medications they have prescribed. Any prescription medication prescribed by the specialty provider is called a referral claim.

Why can a Covered Entity capture referral prescriptions?

Patients served by a 340B covered entity where their health records are maintained and where the referral originated and the 340B covered entity maintains the responsibility for the patient’s care can be considered for 340B drug savings. The covered entity’s providers must document the patient referral in their electronic medical records (EMR) and their 340B policies and procedures must include the process where these referral prescriptions are eligible and can be captured. The 340B covered entity is obligated to show that they are responsible for the patient’s ongoing care. Each 340B covered entity should consider having official policies around provider documentation around patient referrals.

Why should a Covered Entity consider capturing referral prescriptions?

Given the current 340B environment, it is critical for 340B covered entities to identify every potential 340B prescription to render savings back to their organization. Many smaller covered entity types are foregoing savings from referral providers because they may not be aware of how to capture these claims, have the proper 340B policies & procedures in place, they do not have a way to operationalize, or they do not have the resources to execute the process. The organizations that would be ideal to implement a referral process would be Federally Qualified Health Centers and rural, safety-net hospitals. Whether building an in-house process, partnering with your TPA or engaging a consultant, it is critical for each covered entity to compliantly capture prescriptions that render savings to help them to expand services for their communities they serve.

What does the Covered Entity need to do to be able to capture referral claims?

The covered entity needs to demonstrate that they maintain the care of the patient even when the patient is referred out of the covered entity’s four walls. The covered entity’s electronic medical record (EMR) system contains much of the needed data to document care. Common elements that support responsibility of care in a referral situation are:

• Eligible encounter at the 340B covered entity
  • Patient seen by a qualified provider at an eligible location of the 340B covered entity
• Documentation of the outgoing referral
  • Copy of referral form including reason for the referral to an outside provider
• Referral summary maintained by the covered entity
  • When a patient has a referral visit to an outside provider, the referral visit summary should be sent back to the 340B covered entity and logged in the patient’s medical record
• Policies and procedures to identify 340B eligibility
  • Definition of a referral prescription
  • Process for identifying and capturing referral claims either manually or through an automated service

What is the process to capture referral claims?

The process of identifying and capturing referral claims can be tedious. Each 340B covered entity might use a unique process in terms of how they operationalize referral relationships, documentation and validate claims. Some 340B covered entities have a very manual process that utilizes their staff to review the claims per their policies and procedures and compare documentation in the EMR. Other covered entities rely on the settings that they have put in force in their 340B Third-Party Administrator logic and others employ a consultant or additional software platform to process referral claims. Ideally, the process to identify the referral claims and validate for 340B patient eligibility should be easy to review, reject, or approve with documentation for these claims within the 340B covered entity’s capture system. Just like other 340B eligible claims, referral claims must have eligibility verified using an approved provider, and an eligible patient. Once the 340B covered entity validates and approves the referral claim from a patient definition perspective, the 340B TPA will validate that other claim criteria has been met, captures the claim and returns the savings to the covered entity. No matter which process the 340B covered entity uses - manual, their TPA's system or a consultant - the capture of referral claims needs to be clearly stated in the 340B covered entity’s policies and procedures.

Referral Claims can be complex and that is why it is important to set up your program correctly and compliantly to capture 340B referral claims that may render much-needed savings back to your organization.

Have questions or need help? Contact us or learn more about Referral Capture.

 

The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

By Cary Green and Donna Petty

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Industry Insights

A Possible Solution for Preventing Duplicate Discounts under 340B Program

There are not that many core requirements within the 340B Statute¹. For being on its face, what appears a fairly "simple" program, it is instead turning into a mighty complicated program. One of two main requirements is "no duplicate discounts."

A "duplicate discount" is when a prescription (or administration) of a 340B priced outpatient drug is also subject to a pharmaceutical manufacturer's rebate under a Medicaid program. Purchasing a drug at a discount under 340B and the claim also being subject to a rebate under a state Medicaid program would subject the manufacturer to "two" (duplicate) discounts. Filling a prescription and billing a managed Medicaid plan is allowed so long as the state is aware, so they withhold that prescription from their rebate submission to the manufacturer. The opinion of manufacturers these days is that there are "rampant" duplicate discounts being paid out².

Most 340B claims going through a contracted pharmacy are identified as "340B eligible" in a retrospective manner. This usually prevents addressing, at the time of dispensing, any designation as a "340B claim." Because of this, most 340B Covered Entities choose to block the "capture" of these claims and not replenish with 340B priced drugs. The main way to do this is by using the billing information on the claim, known as the "BIN Block" method. A BIN Block consists of a BIN (bank identification number), and a PCN (processor control number) and/or GRP (group designation). These values are attached and are transmitted on each claim record. Most BIN Block systems require a correct and accurate ("exact") match between the data in the BIN block system and the claims records to prevent the capture.

For how important the duplicate discount issue is within the 340B program, one would think more would be done to establish an efficient and accurate methodology?

The following are potential changes that could address the currently known challenges:

Access to the BIN Information

Currently, there is no central database known to the 340B Covered Entities or their administrators that contain all the Medicaid Plans' BIN combinations (as they currently exist or are modified over time.) CMS now requires Medicare Part D Plans to have "unique" BINS – why can't there be a mandate that all Medicaid Plans (FFS and MMCO) have – AND publish (e.g. make available on their websites on the landing page) – up-to-date BIN information? And require that the BIN’s be unique and dedicated solely to Medicaid plans? This would allow BIN Block systems to maintain the most up-to-date combinations which would efficiently and accurately block the capture and replenishment of unwanted Medicaid claims.

Contract Pharmacies

Contract Pharmacies do not always input the correct information in the available "BIN" "PCN" and "GRP" fields in conformance with the NCPDP standards for electronic claims transactions (transmissions.) Medicaid Plans should make it a contractual requirement that they will not get paid if they do not comply with this requirement – the right data in the right place each time. And if an error is identified that corrections must be made immediately, thus preventing any refills from being captured going forward.

Pharmacy Benefit Managers (PBMs)

Pharmacy Benefit Managers do not always reject a claim if it comes in with "incorrect" BIN information. No one wants a patient waiting at the pharmacy window for their prescriptions – but the Medicaid patient should also be required to present their card (which should have printed on it the complete BIN information) each time they have a prescription filled. Instead, if "enough" info is transmitted that leaves little to no doubt as to the identity of the patient, the claim is approved and paid by the PBM. The problem is further exacerbated when the incorrect info is transmitted and that is what the 340B Covered Entity (or its administrator) needs/uses to block the capture of Medicaid claims. This can be a classic case of, "garbage in, garbage out." Make it a contractual performance guarantee/accuracy requirement between the PBM and the Medicaid Plan, requiring the PBM to reject claims from pharmacies that do not come across with the correct information in the correct fields and thereby forcing the pharmacy to resubmit to get paid. It shouldn't take long to drive home the importance of complete and accurate information.

Today, there is no "one" solution that all vested parties have agreed to and/or can operationalize, despite a collective strong desire to prevent duplicate discounts. It is important for 340B Covered Entities to partner with a 340B Third-Party Administrator to assist with the blocking of capturing unwanted Medicaid claims. In addition, it is very important for 340B Covered Entities to leverage their relationships with their respective Medicaid agencies to ensure there is a flow of communication to regularly obtain the most up-to-date BIN information and then share that information with their 340B Administrators.

Hopefully with these changes, behaviors can be changed, duplicate discounts will be prevented and the 340B program can fulfill its intended purpose for the 340B safety net providers and support the prohibition against duplicate discounts. Who knew it could come down to 3 simple letters: B-I-N? If everyone does what is needed, then we can all get back and focus on providing healthcare to those that need it.

 

The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

¹Sec. 340B of the Public Health Service Act (Pub. L. 102-585), as amended by the Patient Protection and Affordable Care Act (Pub. L. 111-148), Health Care and Education Reconciliation Act (Pub. L. 111-152) and Medicare and Medicaid Extenders Act of 2010 (Pub.L. 111-309)

²Maneuvers on the 340B Drug Pricing Program Battlefield: Duplicate Discounts and Contract Pharmacies (https://www.jdsupra.com/legalnews/maneuvers-on-the-340b-drug-pricing-32988/ ) November 12, 2021

Jackie Artinger

Industry Insights

Over the past five years, gateways (aka HUBs) have become more common and more intrinsic in the workflows and processes of 340B Contract Pharmacy programs. As the number of contracted pharmacies continue to increase as 340B Covered Entities (CEs) try to maximize their 340B savings, this has created a more complex scenario for pharmacies with multiple stores, working with several CEs and many 340B TPAs. These contracted pharmacies wanting to be good partners with their CEs and TPAs, need help to manage all the various 340B relationships. Often, CEs are confused and frustrated by the existence and additional fees related to these gateways, and why they exist. Our hope is that this blog will answer most frequently asked questions about gateways.

What is a gateway?

A gateway is a solution for the Chain Pharmacy to manage all 340B transactions on one centralized platform. Gateways (also known as HUBs) represent the Pharmacies’ interests, not the interests of the Covered Entities (CEs).

What are the benefits?

A gateway provides a benefit to Pharmacy Chains, not Covered Entities. Gateways provide the Pharmacy Chain a single platform to access all their 340B data. With the complexity that 340B brings, and ever-changing rules and regulations, gateways provide an avenue to manage a lot of those related 340B day-to-day tasks more efficiently.

How does it work?

A gateway works in traditional 340B fashion, working with the 340B Third-Party Administrators, Contract Pharmacies, Covered Entities, and Wholesalers. The gateway is set-up to receive claims related data on a daily data file from multiple sources; these are files that contain Pharmacy prescription data, Covered Entity claims data, and supply chain / replenishment data. After these files are ingested, some gates  scrub the files against preset Pharmacy parameters. To confirm eligibility, these parameters consist of Pharmacy NPI files, NDC exclusions, BIN blocks, duplicate claims, etc. After eligibility validation is successful, and a full package size has been met, a file is sent to the appropriate wholesaler to begin  the replenishment process as NDCs are purchased and shipped to the contracted pharmacy location. After a successful replenishment, 340B eligible NDC’s are prepared for invoicing to the CE.  

Why should Pharmacies consider using a gateway? 

When Pharmacies work with multiple 340B Third Party Administrators, with it comes multiple system logins, understanding the operations of each system, how each system operates differently, and limitations that come with each. No two 340B TPA systems are the same, each vary with availability of data, TPA workflows, reporting, etc. With a gateway solution, those operational processes, account logins, and other complications are limited, and the work related to 340B relationships become more efficient and manageable for the Pharmacy Chain. The Pharmacy Chain logs into one system, with a clear understanding of the unified reports and data analysis. Many of these gateway relationships also include an additional support resource to assist the Pharmacy Chain to more effectively management their 340B business.

How can Covered Entities effectively negotiate with a Pharmacy using a gateway?

First, CEs need to understand that not all gateways are the same or have the same philosophy. While in most cases, it is usually best that Covered Entities work with their TPA’s, which maintain relationships with all gateways, there may be exceptions. Most TPA’s are in the best position to represent their Covered Entity client’s position  in negotiating with gateways, which represent the Pharmacy Chains. There are exceptions as some TPAs don’t provide pharmacy support when contracting with pharmacies. As with any business, there is a cost to doing business. As pharmacies attempt to improve the efficiencies associated with their 340B book of business, their operating cost increase. In almost every scenario, this results in increased costs. If a CE’s 340B program represents a significant percentage of the contracted pharmacies 340B prescription claims, this may present an opportunity for negotiation. Any CE always has the right to reach out to the pharmacy directly to engage in a dialogue around their fees. This may be needed in some cases, but in any situation, the relationship between a CE and their contracted pharmacy is critical to the success of all parties, including their patients and community.

For any 340B program to deliver the appropriate value for which it was intended, all parties should work together and build a strong partnership. Understand that the pharmacy is trying to keep up with the demand on their business and derive value by utilizing a gateway. In many cases, the additional gateway fees are transparent, but some may not be. Some pharmacy chains simply increase their dispensing fees to account for the increased operational costs of the gateway. These gateways do improve the operational efficiencies of the 340B workflow and overall value to all parties and should be accepted as part of doing business.

Contact us for more information on 340B pharmacy gateways.for more information on 340B pharmacy gateways.

 

The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

By Matt Gage