Scoping 340B Referral Capture Opportunity: It’s Bigger Than You Think


Imagine the services you could offer to the community your facility serves if you had additional funding. If you’re a 340B covered entity (CE), referral capture might just pave the way to securing those much-needed funds.

The 340B program provides essential funding for eligible healthcare providers that serve vulnerable populations, which can lead to measurable enhancements in patient health outcomes. Yet despite the immense benefits of full 340B participation, some providers focus exclusively on prescription claims from their own prescribers, deliberately forgoing referral capture due to compliance concerns or internal resource constraints.

If this sounds like your organization, it’s time to reconsider referral capture to generate additional savings for your healthcare organization.

Continuity of care documentation is key to compliant referral capture

HRSA guidelines state that if a covered entity (CE) can clearly document its responsibility for a patient’s care, it can claim prescriptions for 340B savings, even when written by an outside referred-to provider.

Continuity of care documentation is key; HRSA requires referral evidence to be documented in the EHR, including proof of patient encounters with both the referring and referred-to providers. CEs are also required to clearly define ownership of patient care in their written policies and procedures, especially concerning referrals.

Considerations for scoping referral capture opportunity

If you’re a 340B CE that refers patients to ineligible 340B locations for care, there may be an opportunity for you to increase 340B savings through referral capture. How significant that opportunity might be depends on a few factors. For example, if you are a federal grantee or health center, consider how often you refer patients out for specialty care. A high volume of prescriptions from these specialists for shared patients may suggest a valuable opportunity to implement and utilize referral capture.

Hospitals and health systems should also review service locations and lines within their organizations that are not 340B eligible. Patients cared for by a 340B location may qualify for referral capture when referred to an ineligible location.

Gauge potential results to determine opportunity size

There are four things to consider when determining referral capture opportunity:

  1. Number of in-house and system-owned pharmacies
  2. Number and size of contract pharmacies
  3. Referring provider volume
  4. Amount of ineligible provider leakage

Once you have completed your review of owned pharmacies, contract pharmacies, referring providers and ineligible referral provider leakage, you can compile the results and assess the relative size of opportunity referral capture holds for your organization.

R1 340B Recovery clients that capture referral claims see relatively consistent savings.  On average, contract pharmacy savings grow by 25% or more monthly for Federally Qualified Health Centers; hospitals often experience growth of 10% or more each month.

Access to claims data is essential

The first step to developing a 340B referral program is to determine which ineligible claims you can access. CEs that depend on third-party administrators (TPAs) for data may have limited access to ineligible claims. TPAs may grant access to all ineligible claims, or only release data if the patient had a recent encounter. Some TPAs may withhold ineligible claims data altogether. This is an important consideration when choosing a referral vendor partner.

Your 340B partner should have access to ineligible claims either via direct feed with the pharmacies or TPAs or should be able to ingest any reports of ineligible claims you can provide. The success of your referral capture program will be proportional to the number of ineligible claims you can access and analyze for referral opportunities.

Working with a trusted 340B expert helps you magnify referral capture savings

There are complexities involved with compliantly managing the referral capture process. Meeting 340B compliance standards is critical when capturing referral claims, which is why many CEs choose to work with an experienced 340B expert partner with sophisticated technology and proven HRSA audit experience. 

Here are a few questions you might want to ask prospective partners:

  • How many referenceable clients do you have that use the service today?
  • Is your solution exclusively service-based, technology-based or a mix of both? Is your technology owned and/or developed in-house?
  • What security certifications do you hold?
  • Do you have HRSA audit experience or support? If so, what’s your audit pass-rate record?
  • Will I have access to a dedicated client team and senior leaders for help with complex topics?
  • How much configuration flexibility is there to make program setting changes as my 340B program evolves?

Every healthcare provider has its own top priorities for their 340B program, and so you want to be confident that the 340B solution provider you choose understands your mission and specific goals.

R1 client HealthNet, based in Indianapolis, serves over 60,000 active patients annually — most of which are underserved or underinsured. HealthNet has expanded its services to make a real impact on its community thanks in part to the added funding referral capture provides. For example, in 2021 they delivered almost a thousand babies, provided prenatal care for 2,300 women and delivered health services for more than 1,300 city residents through its Homeless Initiative Project.

Another R1 client, a New England Health System, reports that it funds critical services though 340B referral capture. “We actually fund all our specialty clinics through the 340B savings, as well as some of our hematology, oncology, neurology and endocrinology. We have three renal dialysis centers that we fund through 340B savings as well,” the 340B program manager said.

If you want to learn more about referral capture and R1’s compliance-first approach across their 450+ clients, reach out to Steph Caiazzo.

Steph Caiazzo is the VP of 340B Operations at R1 and can be reached at

Join us at our June 25th webinar to learn practical strategies for optimizing 340B savings. Click below to learn more and register.

*This event is for covered entities only.

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