TPA Fees: Before You Sign on the Dotted Line

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As the 340B program continues to grow in complexity, given the drug manufacturer restrictions, it is more important than ever for covered entities to have a firm grasp and understanding of the fees charged by their Third Party Adminisrators (TPAs) for their contract pharmacies. Whether it is adding a new pharmacy with a new TPA, or a TPA transition, clarity on the fee structure is important in establishing a positive relationship.

Ways to Catch & Understand Fees

One mechanism to ensure there are no surprises in TPA fees is to have your organization’s legal team or a 340B-familiar outside counsel review any potential agreement and highlight any language that may be related to a fee or cost. This can bring to light anything that you may decide to seek clarity on with the potential TPA that might have not been discussed originally.

The 340B environment is also rich with knowledgeable consultants who are familiar with the different TPAs in the space. Enlisting them as a resource could be beneficial in determining what fee structure would best fit your organization, as well as in providing context to fees listed in agreements.

What Fee Structure Is Best for My Contract Pharmacies?

Every covered entity is different. A fee model that works for one entity may not work for yours. Below are a few questions you should consider surrounding the fees associated with your TPA.

  1. Have I analyzed what a TPA switch would look like, based on my current 340B savings and 340B script volume through the pharmacies?
  2. What type of partnership/resource am I getting with the TPA? Have I spoken to references who currently work with said TPA?
  3. Is the TPA willing to negotiate and or have conversations about fees to ensure a fair deal for both parties? Do you get pushback when you ask questions or seek clarity on certain fees?

We hope these tips will help you to have a better understanding of and control over your TPA fees.

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Alex Homkey is Business Development Manager at Hudson Headwaters 340B. He can be reached at ahomkey@hudson340b.com or visit us at Hudson340B.com.

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