The 340B drug discount program is a critically important program for safety net facilities. The financial stability from a strong 340B program becomes even more important as providers continue to battle the COVID-19 pandemic and related uncertainties.  

Caravan Health has a depth of expertise about 340B, and we have announced a new line of 340B support for both Medicare and commercial prescription drug claims. Below are five essential things to keep in mind as your facility considers the future of your 340B program.  

  1. Most covered entities are not capturing all eligible claims 

Covered entities are missing out on approximately 80% of available 340B discounts. Capturing all eligible 340B claims means knowing which doctors are prescribing medications for your patients, even if they are outside of the covered entity. Covered entities have to maintain meticulous records, including physician notes delineating a clear patient-provider relationship for specific conditions.  

The key to capturing is having the software designed specifically by experts for 340B functionalities. This includes records management and population health. Professionals who use Caravan’s software have the guarantee that each claim is accurately matched with audit criteria, otherwise they are identified and prevented from progressing through the system. To assure that claims make it through correctly, the system must be user-friendly.  

Caravan Health, the same organization that designed Coach and Wellpepper award-winning technology, has also designed 340B software that can validate referral claims for Medicare, MA, and Commercial claims  

  1. 340B improves patient care and patient safety 

340B discounts allow covered entities to stretch their resources and provide important services in the community. Rural populations, like those served by the majority of Caravan Health clients, have higher rates of heart disease, diabetes, and other serious conditions. Covered entities can use 340B funding for free or discounted medical services, transportation services to medical appointments, financial assistance programs, medical education, and more. 340B expands the reach of community-based health providers and directly improves patient care.  

A well-managed 340B program also improves patient safety. Knowing more about prescribing and filling patterns gives providers a clear window into which drugs your patients are taking (or not taking), and where they are filling prescriptions. A comprehensive system, like Caravan Coach, includes all this important information that can prevent dangerous drug interactions or over-prescribing.  

  1. Contract pharmacy management extends your reach 

Many patients are choosing to fill prescriptions at a pharmacy convenient to their home, which may or may not be the pharmacy at the covered entity. In rural communities where patients often have to travel a long distance to the nearest clinic, this is especially important and can make a significant difference in medication compliance.  

Because Caravan Health can help a covered entity identify where patients are filling prescriptions, we help to make sure those pharmacies are under contract. We conducted a thorough analysis of a leading national pharmacy chain which showed that covered entities were missing 60% of 340B eligible discounts and 90% of qualified contract pharmacies in that one chain. That loss equals to a minimum of $35 million in missed 340B discounts. No covered entity can afford to let those discounts go unclaimed.  

  1. HHS supports 340B and contract pharmacies 

The 340B statute is clear – drug manufacturers have to provide 340B when drugs are dispensed from a covered entities’ contracted pharmacies. Some manufacturers have resisted providing these essential discounts which led the Health Resources and Services Administration (HRSA), a division of HHS, to publicly support discounts for contract pharmacy arrangements. In May, HRSA sent letters to six manufacturers making it clear that 340B discounts are “not qualified, restricted, or dependent on how the covered entity chooses to distribute the covered outpatient drugs.” 

The work is not done, there are already lawsuits challenging this position. Some drug manufacturers are concerned about program integrity and duplicate discounts, but HRSA and HHS are firmly in support of 340B and contract pharmacies.  

  1. Your facility must be able to survive a HRSA audit 

Your plan for 340B must be able to withstand scrutiny from federal auditors. HRSA conducts random audits of covered entities and their 340B programs. The stakes are high, any insufficient claims documentation can require returning funds already received, as well as other penalties. No safety net facility wants to risk the position of having to return funds to drug manufacturers and take critical resources from the community. HRSA appears to have stepped up the pace of audits in recent months. Do not get caught without a solid plan in place that accurately documents the necessary data elements.  

Learn more about Caravan’s 340B services and how to gain confidence in your 340B program at our recent webinar featuring Founder and Executive Chair, Lynn Barr, and Chief Pharmacy Officer, Dr. LeeAnn Scheer. Watch the webinar on-demand.

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