• Immediately, TPA Pharmacy A must exclude Medicaid FFS from the program, dropping the maximum Capture Rate to 80%

For this example, we'll use $8,000 as net savings for Happy Days FQHC when they achieve their maximum Capture Rate, 80%.

80% Capture Rate = $8000 net savings*
*Based on "Standard 340B TPA Capture Rate" equation, as described above

In a September 29, 2020 article published in Pharmacy Times, authors K. Maxik, C. Kimble, and A. Coustasse caution hospitals to consider the real costs before implementing a 340B program within their organizations. 

Wait, what? Of course safety net hospitals should utilize 340B drug pricing to offset the costs of providing uncompensated care, right? Isn't the intent of the program to offer more quality, comprehensive services to improve health outcomes for the underserved? Why would an eligible safety net provider choose not to participate?

The Centers for Medicare and Medicaid Services (CMS) and 340B program detractors don't necessarily agree, citing the lack of "clear evidence" that drug discounts translate to improved patient outcomes or direct patient savings.  The answer regarding 340B non-participation is convoluted, but essentially starts here: 

The US Court of Appeals recently upheld HHS' decision to reduce Medicare Part B outpatient drug payments to 340B hospitals by nearly 30%.

In addition to the dramatic reduction in reimbursement, this article urges eligible entities to take the following expenses into account before deciding if their organization should institute a 340B program:

• Split billing software
• New employees to monitor compliance and revenue
• Administrative burden to existing staff
• Cost of third-party consultant(s)
• GPO prohibition
• Contract pharmacy fees 

340B program-wide criticism continues from all sides, and unfortunately, CMS isn't the only organization cutting reimbursement for 340B drugs... but that's a journal for another day.

Today, I lament that safety net providers utilizing 340B drugs are becoming so disincentivized by external threats, both governmental and private, that instituting or continuing a 340B program may no longer provide meaningful savings to provide care for those whom the program is intended to help. 

The good news? You can fight back. I urge everyone to vote and contact your local, state, and federal legislators! Join together with other covered entities to form stronger advocacy networks. What better time to do it than while we're all stuck at home?

Advocate by raising awareness of the benefits that 340B safety net organizations provide to the communities they serve, as well as the multitude of threats which could render the 340B program untenable. Your stories are every bit as powerful as the "data" collected by 340B program detractors.

Finally, make sure your organization's 340B program is a shining example of compliance with both program rules and intent. Program detractors most frequently cite the lack of pass-through savings to patients, lack of oversight, and unmanageably large contract pharmacy networks. Proving them wrong will bolster the strength of the 340B community and its' voice in guiding future legislation.

Not sure where to start? Reach out and let us help.

This year the 340B Coalition Summer Conference will be held virtually for the first time ever, July 20-29.

Don't miss Dingwall Pharmacy Consulting's session, Hepatitis C, 340B and COVID-19, live on 7/29, 1:00 - 2:00 p.m., or on demand. 

Not registered for the Summer  Conference this year? Stay tuned for an exclusive, extended recording of this presentation. 
​
​*10/16/2020 update: the extended recording is on hold for the foreseeable future.

I would like to begin by thanking our healthcare workers on the front lines in combating the unprecedented COVID-19 pandemic. Much has changed for all of us in the past six weeks! 

Mass layoffs and business closures due to COVID-19 have already left many members of our communities unemployed and without health insurance. Safety net providers may find themselves overwhelmed with caring for an influx of new patients in the coming weeks and months.  Access to affordable healthcare and medications is especially critical during times of health and economic uncertainty. 

Understandably, your organization may not be thinking much about the 340B program right now. However, key changes in healthcare delivery models and the evolution of the current pandemic will likely continue to alter the 340B landscape in unpredictable ways during the months to come. HRSA has already responded to COVID-19 by providing some additional flexibility for 340B program participants. Staying up to date on these changes will allow your organization to maximize the program's benefit and minimize compliance risks during this challenging time.

Here are some tips:

• Contact HRSA to discuss registration of any new sites or contract pharmacy arrangements immediately! In response to the COVID-19 pandemic, HRSA is allowing emergency registrations for certain covered entities outside the traditional time frame of April 1-15. New 340B IDs, Medicaid Exclusion File changes, and contract pharmacy requests are being submitted, evaluated, and approved on a rolling basis at this time. If approved, the waiting period (until July 1) is also waived.
• Telehealth patient encounters, volunteer healthcare providers, and alternate delivery sites: HRSA recommends promptly documenting any healthcare delivery changes (temporary or permanent) in your 340B Policies and Procedures. For purposes of 340B compliance, all patient encounters should be documented in writing and maintained by the covered entity. Best practice is to document the encounter in the EHR (even with limited patient information).
• Safety net healthcare providers are urgently needed on the front lines to combat the COVID-19 illness itself as well as the arrival of new patients presenting due to rapid and widespread economic fallout. Writing prescriptions isn't going to be enough if patients can't afford their medications. Ensure that your 340B program is providing accessible and affordable medication to help vulnerable populations stay healthier.

We must remain vigilant not only in the fight against COVID-19, but to ensure the realization of the 340B program: enabling "covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and offering more comprehensive services".  Achieving the intent of the 340B program is more important now than ever before. Federal resources are indeed scarce; there will be many, many new individuals looking to safety net providers for care in the near future.

Ensuring the health of your patients, staff, 340B program, and pharmacies is our top priority. DPC remains committed to providing flexible, customized pharmacy services to support you during this challenging and rapidly evolving global crisis. Thank you for the good work you do every day! We're here to help when you need us.

For official guidance from HRSA, please visit: www.hrsa.gov/opa/COVID-19-resources

I haven't come up with a Covered Entity v. HRSA Audit bracket yet; sorry to disappoint. The second quarter of 2020 (and the next HRSA 340B registration period) is only weeks away!  The 340B Coalition Winter Conference is behind us, and your post-conference fervor may be dying down due to the myriad of competing priorities all covered entities must balance.  

As of 2/25/2020, HRSA has completed 170 Program Integrity Audits for 340B Covered Entities in Fiscal Year 2019.  Here are some interesting statistics:

• Of the twenty-four (24) Community Health Centers* audited, 18 (75%) had adverse findings by OPA.
  • 17 of the 18 CHCs with findings cited Duplicate Discounts among the deficiencies noted (94%).
• Of the four (4) Ryan White** grantees audited, 1 had adverse findings.
• Of the three (3) STD grantees audited, 1 had adverse findings.

It may be tempting to wait until the July conference to get your next round of 340B education. If you do one thing for your 340B program between now and July, check on your organization's Medicaid Exclusion File status, your policy to avoid Duplicate Discounts, and your state's guidance for billing both Managed Care and Fee for Service Medicaid.

Medicaid rules change frequently and Medicaid's communication of those changes, in my experience, may leave you with more questions than answers.

Email communication with state Medicaid is best; save those correspondence documents!  You may need them in the event of a real HRSA audit.

Check with your in-house pharmacy (and medical stock), plus contract pharmacies to ensure compliance with your organization's carve in/out policy, including Managed Care Medicaid.

Check out your state's current requirements from Apexus: 

www.340bpvp.com/resource-center/medicaid

​*Covered entities with the prefix "CH" or "CHC"
​**Covered entities with the prefix "RWII" or "HV"

I am so proud to announce the launch of Dingwall Pharmacy Consulting, LLC!  Helping other covered entities achieve success has been a dream of mine for several years.  The best piece of free advice I can offer is this: Successful 340B programs don't run themselves.

My associates and I are eager to share our combined knowledge of contract pharmacy operations, in-house pharmacy start ups, and 340B compliance and optimization. We are experts in our fields and bring experience from a range of covered entity types.

We come from a variety of organizations such as Ryan White grantees, STD grantees, Federally Qualified Health Centers and FQHC lookalikes, to name a few.  We know covered entities; let us get to  know yours.