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Optimize Your 340B Program Value to Enhance Your Community Benefit

This article describes efforts by healthcare systems to partner with GE Healthcare Partners to proactively tackle pharmaceutical supply costs through the optimization of the 340B Program opportunities and realize revenue through enhanced capture of retail/specialty pharmacy prescriptions. (For a PDF download of this article, please click here.)

Background

Financial challenges again ranked Number 1 on the list of hospital CEOs’ top concerns in 2018, according to the American College of Healthcare Executives’ annual survey of top issues confronting hospitals.  Survey respondents identified increasing supply costs, high prices, and insufficient reimbursement for medications as top concerns*. New specialty drugs account for a large and growing portion of the drug development pipeline—up to 50% by some estimates—and have helped to make pharmaceutical costs the fastest-growing driver of healthcare spending. These drugs are impacting both the operational and self-insured health plan costs. As healthcare systems continue to face increasing pressure to control these costs while maintaining quality care delivery, hospitals that meet the qualifications for participation have an opportunity to optimize their participation in the 340B Program to reduce this escalating cost.

Currently, hospitals that are eligible for participation include Disproportionate Share Hospitals, Rural Referral Centers, Sole Community Hospitals, Critical Access Hospitals, Free-Standing Children’s Hospitals and Free-Standing Cancer Hospitals. This program provides an approximate 30-40% reduction in cost for qualified  outpatient drugs for eligible patients of the participating hospital (covered entity). With the high cost of outpatient pharmaceutical care and the substantial discounts available within the 340B Program, it is becoming increasingly rare to find situations where the savings are not worthy of the efforts to fully optimize the participation in the program.

Challenge

While most qualified hospitals participate in the 340B Program, the program compliance requirements, concerns of a Health Resources and Services Administration (HRSA) audit, the changing 340B Program landscape, and the perceived resource investment to manage the program limits a hospital’s pursuit to optimize the value of the program. Consequently, many covered entities that implement the 340B Program derive a sense of satisfaction from the initial program savings and fail to exhaustively assess how to maximize the program’s potential to the hospital and health system. 

Consulting Solutions: A Collaborative Approach

The 340B Program consulting solutions delivered by GE Healthcare Partners start with deep subject matter expertise and exhaustive knowledge of the 340B Program environment. This expertise extends to both optimization and compliance—inclusive of publicly available proposed potential program changes.  Our team of experts works collaboratively with client teams to assess opportunities and challenges for savings and identify revenue optimization opportunities that may be available at each individual hospital or health system. We know that each identified, planned, and implemented optimization strategy must be the right solution for each client’s environment and culture. 

In addition to working with the key client stakeholders, our team works closely with the client’s selected 340B Program Administrator, retail/specialty pharmacies, and commercial payers to develop the best solution that is unique to the specific organization. Our experts are well-versed in the regulatory requirements and processes necessary to safeguard compliance, and we coordinate our work with existing client-selected consultants who provide regulatory compliance services.

Our comprehensive assessments consider many innovative approaches to optimize the hospital’s 340B Program and what other considerations should be evaluated if that hospital is part of health system. These opportunities include (but are not limited to) the following:

  • Improve the efficiency of the program to reduce the volume of drugs purchased at wholesaler acquisition cost (e.g., enhanced charge captures and waste accountability/billing).
  • Capture qualified retail and specialty prescriptions in hospital/health system-owned and operated pharmacies or through the development of a 340B contract pharmacy network.
  • Expand covered entity-qualified outpatient departments (e.g., through the conversion of physician based to hospital provider-based practices and/or infusion center expansion or realignment).
  • Utilize the 340B Program with self-insured health plans through the encouragement of care provided to employees and dependents at the covered entity qualified outpatient services.

Upon the approval of the best optimization strategies for the covered entity, GE Healthcare Partners collaborate to develop the plan, manage the implementation process, and validate the financial success.

340B_Results

*https://www.ache.org/learning-center/research/about-the-field/top-issues-confronting-hospitals/top-issues-confronting-hospitals-in-2018

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