Prescription Drug Discounts are Key to Rural Value-Based Payment Success 

Last week, Caravan Health sent a letter urging Congress to strengthen the 340B drug pricing program. For more than 25 years, the 340B program has enabled safety net hospitals and other providers serving vulnerable communities to stretch scarce federal resources by offering significantly reduced prices for prescription drugs. By participating in 340B, safety net providers can reach more eligible patients and provide more comprehensive population health services. Caravan Health is urging Congress to protect 340B for the benefit of rural providers and patients.    

Read our letter here

Many of our safety net and critical access hospital partners rely on these discounted prescription drug prices as an essential pillar of support. 340B can be a financial lifeline for safety net providers in rural areas, making the difference between staying open and shuttering. These drug discounts can be especially important for financial stability as providers move traditional fee-for-service to value-based payment.  

How Can Caravan Health Help? 

Caravan Health got its start helping rural providers receive the benefits of value-based payment and we continue to be the largest partner to rural providers in accountable care nationwide. We played a central role in the ACO Investment Model (AIM), a program that provided start-up funds to small, rural providers starting out in the Medicare Shared Savings Program. Over three years, AIM ACOs saved nearly $400 million for Medicare, proving that rural providers can succeed in value-based care with the right support.  

CMS is preparing to launch a second round of AIM funding through the Community Health Access and Rural Transformation (CHART) model. Through the CHART ACO Transformation Track, up to 20 rural ACOs will receive seed funding to participate in the Pathways to Success program in January 2022. This is a great opportunity for rural ACOs to get established in value-based payment, and they need every available tool to succeed.  

90% of Caravan’s clients are eligible to participate in the 340B program. Caravan Health can help providers to optimize 340B participation. Our review of Medicare claims shows that more than 80% of prescriptions are not captured for 340B. Safety net providers simply cannot afford to leave these discounts on the table.   

Many of our safety net and critical access hospital clients in ACOs rely on 340B savings to make investments in their population health program. Importantly, the 340B program allows eligible patients access to prescription drugs through community-based pharmacies, including many retail pharmacies that are convenient to patients, families, and caregivers. In recent months, this critical link between rural patients and life-saving medications has been at risk due to certain manufacturers refusing to provide discounts to eligible community-based pharmacies.  

340B is an important part of any value-based payment journey for safety net facilities. Caravan helps our clients maximize their 340B participation. These prescription drug savings can support critical population health efforts, including support for chronically ill patients, value-based programs, and the underserved.   

Caravan Health helps clients:  

  • Contract with community pharmacies to expand prescription drug access for patients and stretch the 340B program’s potential  

  • Optimize generic/brand name mix for 340B reimbursement 

  • Capture more pharmacy claims for employed and independent physicians 

  • Validate more pharmacy claims to receive full credit - and 340B prices - for more patient prescriptions 

To learn more about 340B opportunities and how Caravan can help, register for a free, upcoming webinar about the importance of 340B in rural value-based care here

Register here for Caravan’s 5th annual Accountable Care Symposium, which will feature virtual sessions on making the most of 340B.  


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