The Origin and Evolution of Specialty Pharmacy
Commencing in the early 1970s, specialty pharmacy was originally intended for patients requiring unique therapies for various conditions. Initially this included mainly infusions for hemophilia, cancer, or malnutrition[i]. Most of these offerings came with high costs (many of which can now be offset by copay assistance programs), and special storage and/or shipping requirements[ii].
Specialty pharmacy has since expanded rapidly, and Merck’s launch of indinavir (Crixivan®) in 1996 marked a significant milestone. As the third approved protease inhibitor for HIV treatment, the launch followed a record setting fast-track FDA approval. The decision to dispense Crixivan® exclusively through Stadtlanders specialty pharmacy[iii] set the tone for the limited distribution networks that we see today.
Between 1970 and 2000, most specialty medications were covered as a medical expense. However, a shift occurred in the early 2000s, with specialty transitioning to the pharmacy benefit. Today, specialty pharmacy encompasses many disease states including, but not limited to[iv]:
• Cystic fibrosis
• Hemophilia/other bleeding disorders
• Human growth hormone deficiencies
• Multiple sclerosis
• Organ transplantation
• Rheumatoid arthritis
To date, 21 pharmaceutical manufacturers have made the unconscionable decision to restrict 340B contract pharmacy access, with concerted efforts to focus on the higher-priced specialty products. A glaring example of this intent is Novartis and their restrictions for hospital 340B contract pharmacies greater than 40 miles from the 340B covered entity parent(s).
The repercussions of these decisions are felt deeply by covered entities, particularly those that were already grappling with the task of providing essential services. The negative impact on the lives of those they serve is undeniable. In the face of this financial squeeze, covered entities (CE) are becoming laser focused on capturing as many viable specialty claims as possible. The pressure intensifies as internal stakeholders demand tangible results, challenging their teams to demonstrate the financial benefits and savings coming from 340B.
Tips for Maximizing Specialty Claims Capture
When it comes to maximizing specialty claims capture, there are several key considerations to keep in mind.
1. Accurate NPI Files & Provider Data
While some specialty pharmacies still send claims via switch data, most of them are now sending flat files that rely on the CE and/or TPA to send accurate NPI files. This makes it incredibly important to maintain an accurate list and ensure that there are procedures in place for adding and removing providers on a periodic basis and/or as changes occur. If you have part-time providers that practice at other sites, it would also be wise to provide accurate encounter data (ERX and EMR, if possible).
Another thing to consider is regarding how termed providers are handled. For this example, Dr. Mary Smith terminated her employment with a date of May 1, but had written many specialty prescriptions with refills prior to that date. Ceasing to send Dr. Smith’s NPI beginning on May 2 would lose out on these valid refilled scripts. One recommended solution would be to consider discontinuing the transmission of NPIs for termed providers 364 days after their termination. Your accurate encounter data should preclude the capture of any new prescription written by Dr. Smith after her term date at your facility. By implementing this approach, CEs can ensure that these refill prescriptions are captured appropriately, safeguarding revenue, and preventing potential losses.
2. Establishing Encounter Windows
Encounter windows play a critical role in the successful capture of specialty claims within the 340B program. While many covered entities opt for a very conservative approach and set a zero-day encounter window, this can be problematic for specialty medications. The very nature of how specialty medications are prescribed does not bode well for capture when working within this narrow window.
Consider again the scenario of Dr. Smith, a specialist who prescribed a specialty drug for an eligible patient before she termed. She is a well-seasoned specialty provider and knows exactly how to get this drug approved as quickly as possible. Does Dr. Smith document in the EMR and send an ERX as per the CE’s policies and procedures? Many times, this is not the case. Dr. Smith may circumvent the system, opting instead to fill out the required prior authorization/prescription form and faxing it directly to the specialty pharmacy. From there, the pharmacy often takes a few days to process the P.A., fill the Rx, and send it out to the patient. With these inevitable delays, even if Dr. Smith documented in the EMR, many times the dates don’t match. In this instance, with an encounter window set to zero days, this claim will not be captured.
Considering your unique specialty program, and aligning with your institution’s level of comfort, it may be beneficial to set an encounter window that extends beyond zero days. Implementing a seven-day window can significantly improve the capture rate, and a longer encounter window could yield even more effective results.
3. Beware of Over-blocking Claims
If the CE decides to not report to 340B ESP, then it is extremely important to block all NDCs subject to the ever-growing list of manufacturer restrictions. However, it is also essential that you are not over-blocking. Currently, 16 of the 21 manufacturers provide an exact list of NDCs via the ESP website, but if you rely on another source such as Medispan, there is a chance that you are blocking more NDCs than necessary. In this scenario, your TPA will be able to help you identify the appropriate NDCs to block.
The other important consideration is the rapidly changing state policies on FFS Medicaid vs. MCO Medicaid. It is imperative that you are blocking only the appropriate Medicaid BIN/PCN combination(s). When states eliminate the Medicaid managed care pharmacy benefit, like California or most recently New York, you will want to re-evaluate your MCO BIN/PCN combinations.
4. Close the Loop with Replenishment
Achieving success in capturing claims is an important milestone, but it is equally essential to close the loop on replenishing the products in order to realize the savings. Without the appropriate contracts set up to replenish inventory, the effort put into claim capture could be rendered ineffective.
Many specialty pharmacy items are more labor-intensive to order. Let’s look at the complexity when ordering from Bristol Myers Squibb’s book of business. Effective 3/1/2022, BMS withdrew 340B pricing for hospitals’ contract pharmacies. However, BMS will recognize up to two designated 340B contract pharmacy locations per 340B hospital that lack an entity-owned pharmacy. One designation is for IMiDs (formerly Celgene products – REMS required), while the other is for non-IMiD products (Non-REMS BMS products).
The covered entity must designate these pharmacies on the 340B ESP platform. Additionally, it’s worth noting that Amerisource Bergen is the sole wholesaler stocking the IMiD products and providing 340B pricing. These nuances across different manufacturers require careful navigation on the part of the covered entity, which can be time-consuming and challenging. This is where a trusted third-party administrator (TPA) can provide invaluable assistance from start to finish.
From navigating manufacturer-specific requirements to coordinating with designated contract pharmacies and wholesalers, your TPA’s expertise can streamline and optimize the process. With their support, covered entities can ensure a seamless workflow, and rest assured that they are maximizing the benefits of the 340B program and optimizing savings.
Unlock the full potential of your program with RxStrategies, your trusted partner in 340B. Contact us today to learn more about our comprehensive suite of solutions and discover how we can help you maximize savings, streamline operations, and ensure compliance.
Dave Hanson is VP of Specialty Pharmacy at RxStrategies. He can be reached at firstname.lastname@example.org.
[i] Schachte J. Reflecting on the History of Specialty Pharmacy. https://www.pharmacytimes.com/news/reflecting-on-the-history-of-specialty-pharmacy. Published July 21, 2016. Accessed May 13, 2023.
[ii] Fosemckay. What is a specialty drug? PCMA. https://www.pcmanet.org/pcma-cardstack/what-is-a-specialty-drug/. Published 2020. Accessed May 13, 2023.
[iii] Letter TP. Merck’s Crixivan Is Third Protease Inhibitor Cleared. TPL. https://www.thepharmaletter.com/article/merck-s-crixivan-is-third-protease-inhibitor-cleared. Published March 25, 1996. Accessed May 13, 2023.
[iv] National Association of Specialty Pharmacy. What is specialty pharmacy? https://naspnet.org/wp-content/uploads/2019/08/What-Is-Specialty-Pharmacy-090718.pdf. Accessed May 14, 2023