Interpreting the HRSA 340B Drug Pricing Program

For Referral Prescriptions, Continuity of Care Documentation is Key

Although its benefits are great, the 340B Drug Pricing Program leaves a lot up to interpretation by participating health systems when it comes to compliance – especially with referral prescriptions. Referral prescriptions – or prescriptions resulting from referrals to outside specialists – have long been a point of confusion under the 340B program. Can 340B participating organizations capture these prescriptions, and if so, how?

What is the HRSA 340B Drug Pricing Program?

According to HRSA 340B FAQ 1493: 
If the covered entity can document that it retained responsibility for the health care services provided to the referred individual, then that individual may be eligible to receive 340B drugs from the covered entity. How a covered entity counts referrals under the 340B Program should be addressed in their written policies and procedures.

It sounds simple – a clinic may only capture referral prescriptions for its own patients. But how does a health center prove that it owns patient care when there are several complicating factors involved? Those complications can include:

  • Interpreting program rules – As the HRSA FAQ cited above indicates, providers are given latitude regarding how they count referrals and the program leaves it to the covered entities to determine and document. But this can create a significant degree of uncertainty around compliance and audit risk.
  • The dual discount dilemma – Many drugs included in the 340B program are also discounted through Medicaid and providers are not allowed to realize the discounts through both programs for the same patient. It is up to providers to ensure compliance and that can put an extra workload on an already overburdened staff.
  • Connecting documentation dots – Because the data required to document eligible prescriptions typically resides in multiple, disparate systems, providers need to establish workflows and procedures for collecting, compiling, and reconciling eligibility data in order to comply with 340 program requirements around audit preparedness.

Documenting Patient Eligibility & Continuity of Care

340B participants must show that they are the central entity responsible for a patient’s care, even when a patient sees a specialist at a different facility. This could include documenting referrals, providing proof of provider-entity relationships, and/or maintaining patient notes from internal and external providers. Failure to document that ownership of care can have serious repercussions. According to HRSA 340B program requirements, “Covered entities are subject to audit by manufacturers or the federal government. Any covered entity that fails to comply with 340B Program requirements may be liable to manufacturers for refunds of the discounts obtained.”

At minimum, HRSA requires the referral documented in the EHR, and proof of patient encounters with both the referring and referred-to providers. However, “audit-proof” 340B referral prescription claims go much further. According to HRSA, “Policies and procedures should include elements of program requirements, including methodologies for routine self-auditing and internal corrective action. Covered entities are strongly encouraged to review and update their policies and procedures for all facets of the 340B Program on a regular basis in order to improve program integrity within their organization.”

Our clients’ Policies & Procedures account for a variety of qualification scenarios. For example:

  • How long after a patient’s visit (as documented by the encounter in your EHR) is the patient still considered active?
  • Must a patient have visited your primary care facility in the last 6 months? 12 months? 2 years?
  • How will you handle refills prescribed by specialists?

These types of parameters should inform whether your facility truly owns (or still owns) a patient’s care, and whether a related referral prescription is considered valid. 

Managing these requirements can place a significant work burden on a Pharmacy Manager-turned-340B Program Manager, which is the case for many health centers. Because of these resource constraints, many health centers instead choose to forego 340B savings from referrals — even though the savings could add to an already vital source of income for resource-strapped federally-funded health centers. Choctaw Regional Medical Center in Mississippi, for example, realized a 7% increase in 340B program savings by identifying 1,300 additional prescription claims from referrals. Overall, Cloudmed 340B Recovery has helped more than 170 covered entities qualify more than 188,000 prescriptions to recover $55 million in added program savings.

Additional Resources:
3 Key Compliance Components for 340B Covered Entities (blog)
Maximizing 340B Savings at Contract Pharmacies (webinar)
340B Program Compliance in Regard to Referrals for Consultation (white paper)

Learn more about Cloudmed 340B Recovery, or schedule a meeting to talk to our team today.