Far too many 340B hospitals overlook pharmacy’s overall potential in their health systems’ revenue cycles.
Below is a graphic overview of ProxsysRx’s integrated approach to optimizing a health system’s pharmacy services, savings and revenue. In 340B support alone, we’ve generated over $500 million for the hospitals we serve — revenue those systems have used to positively impact the quality and scope of patient care they offer, in countless ways.
Why you should optimize, and not maximize, your 340B program prescription savings
An optimized 340B program should be both aggressive and conservative. Which is to say that you should aggressively pursue 340B savings for every eligible prescription that’s worth pursuing. After all, some prescriptions are simply too low-cost, at market rates, to justify the effort needed to generate nominal savings.
An ideally optimized 340B program generates a net savings for your health system on every eligible prescription claimed.
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Key Elements of an optimized 340B program
1) Proprietary 340B software with automated analytics
It’s no secret that managing a successful 340B program is a complex undertaking. Moreover, given the ever-expanding scope and severity of manufacturer restrictions, 340B savings and revenue is a constantly-moving target. Which is why virtually every update ProxsysRx has implemented in its own 340B Analytics software platform has been to automate processes that our 340B team formerly conducted manually.
That said, the ultimate objective of a 340B software system should be to enable your 340B team to make better decisions faster.
To learn more about the tasks your 340B software should perform, Click Here
2) A dedicated, full-time 340B program team
Most hospitals’ 340B teams are comprised of the Director of Pharmacy and a Pharmacy Tech — both of whom have full-time jobs, in addition to their 340B program responsibilities. In our experience, that never works, and it never will. You need at least one full-time, experienced 340B expert on your team.
340B experience and human oversight is critical because software alone can’t reliably requalify missed prescriptions for 340B savings. There has to be a reason each prescription is requalified, and that reason has to be defensible, if it’s challenged in audit. That requires 340B experience and judgment on a prescription-by-prescription basis.
To learn more about the importance of an experienced 340B team, Click Here
3) The proven ability to overcome 340B ESP / manufacturer restrictions
As we’ve noted in multiple posts on our blog, the 340B ESP website is nothing short of a blatant, lawless tactic used by scores of drug manufacturers to disallow the discounts they are legally obligated to offer eligible entities. At the same time, a number of additional manufacturers are placing — separate from 340B ESP — similarly-unlawful, and unnecessary, reporting burdens on hospitals submitting claims for 340B savings.
The good news is, you can overcome most restrictions. While the average 340B hospital’s revenues have decreased significantly since the 2020 advent of manufacturer restrictions, the 340B revenue of every hospital we serve has increased.
To learn how to overcome manufacturer restrictions, Click Here
4) Prescribers who know and follow 340B best practices
In our experience, an incomplete understanding of the 340B program’s best practices is the most common reason prescribers don’t take full advantage of available prescription discounts for their patients. Which is why clearly-defined 340B prescribing policies are critical to optimizing your program.
Very often, the solution is simply familiarizing providers with the prescribing procedures needed to ensure eligibility. The rejection of eligible prescriptions is often simply a matter of mismatched elements in prescription forms. (IE: A name entered Bob in one place and Robert in another will result in denial.)
5) TPAs aligned with your 340B program objectives
TPAs play a critical role in any covered entity’s 340B program. It’s their job to generate entity savings by matching contract pharmacies’ prescription claims with the patient data you provide. Without those matches, no prescriptions can be qualified for 340B-savings eligibility — and no savings occur.
That said, not all TPAs are created equally — and few health systems managing their own 340B programs have the in-house resources to adequately evaluate their TPAs’ comparative strengths and weaknesses.
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6) An optimized 340B contract pharmacy network
If your hospital is managing its own 340B program, we can tell you one thing — based on past experience — with 100% certainty: Your contract pharmacy network is not what it should be.
The typical number of quality 340B contract pharmacies we’ve added to the networks of health systems we serve is five to ten. In numerous instances, we’ve identified good contract pharmacies literally within walking distance of the hospitals. For the network of one health system in South Carolina, we added nearly thirty contract pharmacies in two years — and we’re still adding more.
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That said, quantity is far from the only key element of an optimized contract pharmacy network. Like TPAs, not all contract pharmacies are created equal. Far from it, in fact!
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7) An onsite retail pharmacy active in your health system’s 340B program
A well-managed retail / outpatient pharmacy can, and should, generate significant revenue and profits for your health system. ProxsysRx currently owns or manages 22 in-house retail / outpatient pharmacies, and — on average — those pharmacies generate $750 to $1000 in net profit per bed, per month.
Which means, for instance, that a 200-bed hospital can expect to generate $150,000 to $200,000 in monthly net profit from its in-house retail pharmacy. Moreover, those numbers can increase significantly, depending on how active your pharmacy is in filling 340B prescriptions.
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8) An onsite 340B specialty pharmacy
From a quality-care perspective, onsite specialty pharmacies offer 340B hospitals a significant advantage in caring for the “sickest of the sick” patients they serve.
From a financial perspective, the number one reason a 340B hospital should consider an onsite specialty pharmacy is the significantly increased potential for generating 340B savings — and for passing-along those savings to patients in need. Some covered entities generate as much as 600% in revenue from 340B specialty drugs as they do in traditional retail / outpatient pharmacy 340B prescriptions.
The benefit of a URAC-accredited 340B specialty pharmacy partner
ProxsysRx’s specialty pharmacy team has been contracted to build and manage on-campus 340B specialty pharmacies for five health systems, and has earned accreditation status from URAC (Utilization Review Accreditation Commission) — the medical profession’s gold standard for third-party validation of high-quality health care. ProxsysRx is just the fourth company awarded the highly coveted status, and the only company offering health systems a comprehensive range of consultative and hands-on pharmacy-related support services.
The single greatest benefit a URAC-accredited partner offers hospitals is a significant reduction in the calendar time, and in the personnel time-investment, required to earn the accreditation they need to own a successful specialty pharmacy. For all practical purposes, our accreditation cuts your hospital’s specialty pharmacy accreditation time frame in half.
FOR FURTHER READING
The Case for Onsite Specialty Pharmacies in 340B Hospitals
Starting A 340B Specialty Pharmacy: What Does The Process Look Like?
How A 340B Hospital Can Pay For Its Own Specialty Pharmacy
Best Practices For A Successful 340B Specialty Pharmacy
9) A robust Meds To Beds program
On a purely practical level, a well-managed bedside prescription delivery program can improve your 340B health system’s revenue — in large part, by reducing costly readmissions.
Any number of studies indivcate that two of the primary reasons behind patient non-compliance with medication protocols — the leading cause of unnecessary readmissions — are lack of education & understanding, and lack of access (both financial and “locational”) to pharmacies. That’s why 340B-eligible entities often offer financially-challenged patients home delivery and prescription discounts, in addition to their Meds To Beds services. Again, they’ve determined that the costs of offering those additional services to 340B patients are far outweighed by the benefits of superior post-discharge care and the savings that come with dramatic reductions in readmissions.
On the human level, Meds To Beds is more than a tangible sign of your 340B hospital’s care of, and for, the individuals & families you treat. It’s your first line of offense in ensuring all of your patients (340B or otherwise) follow prescription protocols after they’ve left your care.
Meds To Beds is a transitional care program which many health systems fail to implement because of the costs of staffing and administrations. In our experience, those costs are more than offset by increased overall pharmacy revenues. In one Mississippi-based 340B health system, ProxsysRx’s Meds To Beds team filled over 18,000 discharge prescriptions in just the first 12 months — during which time, pharmacy revenues increased 125% and readmissions decreased 79%.
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ProxsysRx is here to help, if you have questions.
There are so many ways to optimize your 340B drug program savings and benefits. For more information on any aspect of developing and managing a successful 340B program, contact: Howard Hall — C: 214.808.2700 | howard.hall@proxsysrx.com
