340B and Value-Based Payment Keep Safety Net Doors Open


In recent years, the federal 340B drug discount program has grown in importance for safety net facilities. Covered entities are continuing to battle the effects of the COVID-19 pandemic which lead to uncertainties including provider and staffing shortages, impacts on 340B eligibility, and revenue shortfalls. The financial stability of the 340B program is paramount to the care of these hard-hit communities.

Value-based payment programs, such as Medicare accountable care organizations, can be a critical pillar supporting your 340B program. Value-based payment programs provide data on patients and prescribers that create new opportunities to capture 340B discounts. Caravan Health has been able to help clients gain an average of $200,000 per ACO participant in additional 340B revenue by optimizing their programs with accountable care data.

Covered Entities can maximize discounts in value-based payment programs

Even covered entities that are experienced with 340B are often capturing less than half of available 340B discounts. That leaves the majority of these valuable discounts on the table. The key to capturing more discounts is having information about which doctors are prescribing medications for your patients, even if those prescriptions are written outside of the covered entity. In a value-based payment arrangement, your facility has the data to connect these dots because a value-based payment participant is responsible for the total cost of care for its patients. The information that includes where patients are being seen is central to understanding and containing overall costs.

In an ACO, the covered entity receives full patient prescribing information as part of participating in the program. Full prescriber information is only part of the way to reach full 340B success. Covered entities have to maintain meticulous records, including physician notes delineating a clear patient-provider relationship for specific conditions. A covered entity must have systems and software that capture full information and make sure that each claim is accurately matched with audit criteria.

340B in value-based payment improves patient care and patient safety 

A well-managed 340B program coupled with population health services can improve patient outcomes and assure patient safety. For example, value-based payment participants are more informed about prescribing and filling patterns, giving providers a clear window into which patients are complying with their prescription medications and where they are filling the prescriptions. 

Since the COVID-19 pandemic began more than two years ago, providers have been concerned about how to safely deliver care in a public health emergency. 340B discounts allow covered entities to stretch their resources and provide essential services in the community. Safety net facilities see patients with higher-than-average rates of heart disease, diabetes, and other serious conditions. Covered entities (CEs) 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.  

Value-based payment, and the data behind it, helps your facility survive a HRSA audit 

Most covered entities are concerned about undergoing an HRSA audit of their 340B program activity. All CEs must be able to withstand the scrutiny from these random audits and their 340B programs. The stakes are high, any insufficient claims documentation can require returning funds already received, as well as other penalties. Covered entities cannot risk having to return funds to manufacturers and threaten critical resources and programs vital to their communities. 

With the recent national focus on the 340B program, participants are increasingly concerned about HRSA audits. As a member of an ACO, compliance is integral to the documentation being captured and assures ALL documentation parameters are met for referral claims.

The Bottom Line

The challenges in 340B continue to manifest. Recent court setbacks in the contract pharmacy dispute between pharmaceutical manufacturers and the government continue to negatively impact covered entities and the patients they serve. No one knows when the legal matters will be resolved or when Congress will take action.

We do know that data from value-based care programs, such as ACOs, can provide continuing support and enhancement to protect the valuable 340B programs in our communities.

Patti Schneider is Vice President of Caravan Health. She can be reached at pschnieder@caravanhealth.com.

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