Register HERE for our upcoming 340B webinar with 340B Report’s Ted Slafsky and Visante’s Kristin Fox-Smith. Ted will provide a timely update on 340B policy and litigation, and Kristin will offer practical strategies on how to manage and optimize your 340B program in these tumultuous times. Registration is free, but space is limited!
Health systems should prepare for a high degree of volatility and change associated with the 340B drug pricing program for 2024. With continuing manufacturer pressure to restrict contract pharmacy programs, escalating data requirements, enhanced audit oversight, multiple 340B-related litigations, and increasing congressional investigations, pressure on the program will continue to mount.
New restrictions, 340B ESP, increase complexity
In 2023 alone,10 pharmaceutical manufacturers implemented new restriction policies, with 10 manufacturers enhancing the previously placed restrictions. These restrictions are causing significant financial challenges for Covered Entities (CEs) with contract pharmacy relationships.
The varied requirements and processes for reinstating 340B pricing have become more complex and challenging for CEs to navigate. Most enhanced restrictions have implemented a location rule, where any designated pharmacy must be within 40 miles. Or will only allow a designation if the entity does not have an in-house pharmacy. Previously allowed exemptions for wholly owned pharmacies have also been removed or restricted by several manufacturers. This situation greatly strains CEs’ already limited resources with less revenue.
The ESP platform was intended to provide a secure way for CEs and manufacturers to work together to resolve duplicate discounts and restore contract pharmacy pricing. However, the ESP process has become more challenging to manage. With each change in a manufacturer’s restriction, the submission balance is reset for each entity, meaning any accumulations in place are removed, and the entity must restart the accrual process to retain 340B pricing. This has resulted in manufacturers requesting the submission of more claims while invalidating previously submitted claims. When the entity cannot produce more claims, the manufacturer removes the 340B pricing. As a result, submitting claims and monitoring pricing restoration is an administrative burden, and many CEs struggle to keep up with the volume of associated work.
Patient eligibility still a gray area
One result of ongoing litigation about patient eligibility is that some CEs have broadened their interpretations of the patient definition. Interpretations vary in scope and are accompanied by a degree of risk. Visante recommends that in the absence of a court decision, CEs considering patient definition expansion involve their 340B Oversight Committees – particularly Legal and Compliance teams – when evaluating the organization’s alternatives and risk tolerance.
Pandemic-initiated waiver removed
HRSA recently announced a rollback of the 2020 pandemic-initiated waiver for off-site, outpatient hospital facilities to be listed as reimbursable on the hospital’s Medicare Cost Report before participating in the 340B program. Implemented to recognize the need for hospitals to quickly respond to the rapidly evolving conditions of the COVID-19 pandemic, HRSA indicated that “pandemic conditions are no longer rapidly evolving in a manner that requires significant unplanned activities or changes by hospital-covered entities to accommodate these exigencies.” The final format and implementation of the waiver removal should be carefully considered for 2024 340B program operations.
How to protect and optimize your 340B program
The changing 340B landscape makes 340B program optimization more important than ever for health systems. Visante helps clients find and resource opportunities for improvement, which drives value back into the health system, enabling the organization to continue caring for vulnerable patient populations.
Below are some common strategies to use when looking to optimize your 340B program:
- Drive prescriptions to in-house or wholly-owned pharmacies.
- Revisit 340B policies and procedures to identify opportunities.
- Explore innovative clinic strategies to enhance patient eligibility.
- Manage and maintain 340B software systems to maximize 340B capture.
- Resource and implement referral processes to capture eligible prescriptions.
- Partner with providers to implement Medication Management Programs.
The 340B program remains critical for hospitals’ ability to offer continued support for the care of vulnerable patient populations. With multiple efforts underway to curtail the 340B program, there will again be a high degree of volatility associated with the program in 2024. CEs should prepare for enhanced scrutiny and escalating documentation and oversight requirements. In addition to 340B program optimization, we recommend that hospitals proactively evaluate other opportunities to replace potential 340B program financial reductions. This could include pharmacy revenue cycle management, expanded internal specialty pharmacy services, and building or expanding internal infusion services.
For more information, read our full summary of the top 10 issues facing health system pharmacy in 2024.
Learn more about our 340B program expertise at Visante. Our team’s deep expertise and innovative approach can help you optimize your fully integrated health system pharmacy program. Contact us to learn more about how we can meet your unique needs.