Here's how we're helping 340B covered entities optimize savings and cash flow

June 19, 2020

This is the final post in a three-part blog series highlighting ways for 340B covered entities to maximize cash flow and savings opportunities during the COVID-19 public health emergency. You can read part one of the series here and part two here

When we started this initiative a few weeks ago, we were focused on a single objective: in a time of turmoil, what more could we do to help covered entities optimize their 340B savings and accelerate cash flow? Harnessing the creativity and expertise of our finance, pharmacy and client services teams, we have explored dozens of ideas to determine which would result in immediate and material impact on your finances.

While we’ve seen that the impact of each specific opportunity varies depending upon entity type, 340B program setup and population served, we are encouraged by the total results to date. We’ve assisted entities in securing early registration and eligibility for more than 70 contract pharmacies and nearly 100 child sites and locations – and we’ve helped covered entities find more than $1.1 million in additional eligible 340B savings. We hope these opportunities are generating successes for your organization, as well.

This week, we are turning our attention to new tactics we believe could amplify those current savings by as much as ten-fold. Here’s what we’re recommending:


Review high-cost specialty drugs within specific drug therapy classes

We previously discussed the 340B savings leakage that results from high-value specialty prescriptions that have unique prescribing workflows. These scripts become difficult to automatically qualify due to preauthorization requirements, additional documentation or nonstandard date-written windows. However, among our clients, these scripts represent an average potential 340B savings of $3,400 per claim.

What we’ve found is that, within a particular therapy class, there are examples where we can define an eligible encounter + eligible location for that specific therapy + a specific drug as a matching scenario for 340B eligibility. A few common examples include TNF blockers with a rheumatology, dermatology or gastrointestinal visit; oral oncology medications with an oncology visit; or MS medications with a neurology visit.

In specific situations such as these, where the likelihood of eligibility is high, we’re working with our clients to accelerate the manual qualification process through enhanced workflows that work in tandem with our ClaimsGuard tool. We suggest you discuss this strategy with your current 340B administrator to understand your options for improving the capture of eligible scripts within these specific situations.


Ensure accuracy of 340B pricing in wholesaler catalogs

We’ve found that missing 340B catalog prices can have a profound impact on 340B savings, and our pharmacy team has been working with McKesson, Amerisource Bergen and Cardinal Health to ensure our clients have access to 340B catalog pricing for all specialty medications.

In some cases, the missing price is due to a simple wholesaler catalog error. However, in many cases, we’ve discovered that an entity has never contracted for a specific specialty medication, and we’ll work with them to obtain access. Currently, we estimate that this one initiative could result in $9.8 million in savings for our entities, with individual impact ranging from a few thousand dollars to more than $2 million per entity.

We highly recommend that you investigate catalog pricing with your wholesaler(s) and work to remedy the gaps where 340B pricing is not available. Here at PSG, this practice is now a part of our standard operating procedures.


Fulfill outstanding orders for limited distribution drugs

Orders for limited distribution drugs require additional data that can present an administrative burden for covered entities and pharmacies. As a result, these drugs may age out before they can be replenished. We help our clients identify and resolve outstanding 340B savings opportunities related to unreplenished limited distribution drugs with eligible 340B accumulations, and we recommend you do the same. By providing the data needed to expedite these orders, you can ensure you capture the 340B savings you’ve earned on these limited distribution drugs.


Continue to align to best practices for telehealth

While the COVID-19 pandemic has quickly accelerated and expanded telehealth adoption, experts agree that it is here to stay as an alternative to in-person provider visits. In addition, the Health Resource and Services Administration has confirmed that telehealth visits are 340B-eligible. For this reason, we recommend a closer look at your data feeds, locations and policies and procedures to future-proof your program for telehealth realities. Here’s a quick checklist to review:

  • Do your 340B policies and procedures accurately reflect your telemedicine practices?
  • Are all eligible telehealth locations registered appropriately for 340B?
  • Is your 340B vendor receiving the correct visit types to ensure all telehealth visits are captured?
  • Do you have appropriate P&Ps to capture telehealth visits via alternative means in case you lose access to your EMR?


Expand 340B patient eligibility to include newly-registered offsite locations

While we previously addressed the topic of immediate registration and eligibility of offsite locations enabled by HRSA’s public health emergency exceptions for COVID-19, a nagging issue remained: these sites could not leverage the 340B program until the location appeared as a reimbursable outpatient cost center on the organization’s most recently-filed Medicare cost report, a process that can take up to 22 months.

Thanks to communications issued over the last two weeks, HRSA has clarified that patients seen in a newly-added child site will be 340B-eligible immediately, as long as they are patients of the covered entity.

It’s important to note that the Medicare cost report requirement is still in place to gain 340B eligibility for offsite locations, according to the Office of Pharmacy Affairs website. However, this requirement will not affect patient eligibility when patients of the covered entity have an encounter at the offsite facility. We recommend that you clarify your patient definition and revise your policies and procedures related to offsite locations accordingly.