Improve Quality Outcomes with ACOs and 340B


Increasingly, participants in Accountable Care Organizations (ACOs) are discovering and benefiting from the 340B drug discount program. Unlike the historic fee-for-service healthcare models, ACOs are rewarded for outcomes that are better aligned with value-based population health, including improved patient care outcomes, an enhanced patient experience, and more efficient, streamlined provider time where physicians spend more time with patients who are most acute, all while lowering overall costs.

By participating in the 340B program, eligible hospitals and clinics are better positioned to put patient care first. When combined with ACO participation, new drug savings and revenue are generated to further efforts to enhance patient care while lowering costs at a time when the field of healthcare is experiencing unprecedented stressors – both professionally and financially.

Safety-net providers have demonstrated success in accountable care through a collaborative ACO model. In a collaborative, independent providers work together to improve operational efficiencies and quality of care while lowering costs. Larger ACOs achieve the benefits of scale that help stabilize results and earn reliable savings. With the right processes in place, safety-net providers can benefit from ACOs to garner new data, insights, and administrative workflows that would neither be cost-effective nor efficient if attempted as a sole provider or system.

Signify Health’s 340B team of experts work with clients to identify 340B opportunities, including identifying referral prescriptions that may be eligible for 340B due to the patient’s relationship with the 340B covered entity (CE). Identifying these valuable prescriptions results in the ability to improve capture rates and leads to new sustainable revenue streams. In a recent survey conducted during a ‘340B Updates from the Field’ webinar, more than half (56.5%) of the attendees responded that they were not capturing 340B referral prescriptions. This could be a costly mistake resulting in foregone revenue that could have been used to improve patient care.

For-profit drug makers are actively working to restrict access to 340B pricing because they recognize the savings from 340B equate to reductions to their bottom lines. To take advantage of 340B savings, a hospital or system must be deemed a covered entity (CE) as determined by HRSA. However, even CE’s already participating in 340B typically only claim prescriptions written by their physicians in their provider-based clinics which limits their potential and results in missing thousands of prescriptions written to their patients by other providers in the care continuum.

ACO participation can help to manage referral prescriptions and identify opportunities.

5 Ways ACOs Help Covered Entities Improve 340B Savings

  1. Provide insight into previously unrecognized pharmacies with high potential.

  2. Supply sample contracts, contacts, and warm handoffs.

  3. Work with third-party administrators to support new pharmacies and process additional claims.

  4. Provide greater visibility with data that shows all prescriptions, including the providers who write referral prescriptions.

  5. Help to manage external prescriptions and set the stage for improved patient care outcomes and ACO performance.

Despite demonstrated models of 340B success, many CEs have been hesitant to participate in the program due to perceived obstacles and/or a fear of being audited. That hesitancy, while a conservative choice, may also be a costly one. Data demonstrates that CEs miss up to one-third of eligible prescriptions. In an ACO, providers are responsible for delivering proactive, coordinated care to their attributed patients and receive claims data that provides unique insights into its patient populations. CEs can use this data to see where their patients are filling their prescriptions and can uncover significant potential 340B savings. By expanding the potential of contract pharmacies and capturing referral claims, a CE can substantially increase its 340B savings and reduce the overall impact of adverse manufacturer restrictions.

With healthcare providers, hospitals, and health systems continually being squeezed with demands to accomplish more with less, the new savings generated from the 340B referral revenue can be used to expand primary care services, fund assistance programs, and improve quality of patient care. Rather than ask whether or not to participate in the drug discount program, perhaps the more accurate question is: “Can we afford not to participate?”

For more information about Signify Health and the 340B program, visit

Anthony Esgro, Director, 340B Programs at Signify Health

Taylor Campbell, 340B Business Development Manager, Signify Health

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