The Three Most Common Ways 340B Referral Savings Are Missed

October 1, 2020

African American male pharmacist using digital tablet during inventory in pharmacy.|

Referral prescriptions can be a critical source of 340B opportunity for covered entities (CEs) in their mission to “stretch federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Whereas only a few years ago, CEs were reluctant to engage in referral-prescription opportunities due to compliance concerns; many have since added referral-prescription capture to their 340B programs and become more confident in creating additional value for their program. 

Maintaining data integrity across all the partners that support a 340B program is a top priority for CEs, which poses a risk for both noncompliance and variances in value performance if data about patients or providers becomes inconsistent or changes structure. The following are three key considerations to look for when analyzing potential opportunities in referral-prescription capture. 

1.) The contract pharmacy: 

Contract pharmacies effectively extend 340B providers in providing prescription access and other healthcare services to eligible patients, highlighting the importance of selecting the right contract-pharmacy partner to realize higher per-claim savings. 

Understanding where patients receive pharmacy services is a great targeting exercise for CEs to determine the best fit with an external pharmacy. Using the EHR is key to performing this exercise accurately because those systems support the reporting of outbound prescription orders to provide either a destination pharmacy (if electronically prescribed) or a patient’s preferred pharmacy. Many 340B teams may not realize they can access and use this data source, and leveraging this data is a key approach to understanding potential value. 

Additionally, a contract pharmacy’s transparency in their forecasting methodology (e.g., how they calculate Medicaid-eligible populations) and ability to share and evaluate data with your referral-management solution can influence per-claim savings: 

  • Vet any promises of returns thoroughly by qualifying assumptions made in the forecasting process. 
  • Have contract-pharmacy partners describe what data they make available to CEs and their affiliates to identify missed opportunities. 
  • Ask whether they have preferred data-sharing relationships that you should consider as part of the selection process. 

 2.) Patient activity: 

Securing the documentation to support the patient’s referral episode of care is critical to meeting HRSA expectations about managing referral prescriptions. Some CEs that manage referrals on their own do not have great documentation workflows or have limited staffing resources that only focus on high-yield claims or targeted clinical-service lines. Most vendors that advertise referral-management services lack direct integration with medical-records systems and pharmacies to accurately identify referral opportunities in an automated fashion. 

In contrast, a comprehensive solution should have both interconnectivity with your electronic health records and the contract pharmacy. This would allow it to automatically pair adjudicated prescriptions to outbound referral events and populate a queue of potentially eligible referral prescriptions. This results in a list of potentially eligible claims that are targeted to avoid “carpet bombing” external providers and becoming a nuisance to their patient-care efforts. 

Another thing to consider when analyzing a patient’s referral episode of care is the range of time between the most recent encounter dates at both the CE’s and the referral provider’s offices. The frequency of how often a patient must visit a primary-care service is not mandated by HRSA, and CE may use discretion in developing a policy consistent with the needs of their population. For example, the NACHC suggests that many health centers consider a patient “active” if they have a visit within the past two years, as this practice is consistent with universal data spec requirements that patients be seen within the same timeframe. Additional factors that may be considered include the frequency for which recommended visits should occur in patients with chronic disease. 

Evaluating the inclusion and exclusion parameters within a referral-management solution can have a significant effect on the yield of eligible claims. Ensure that you are fully knowledgeable in this area and vet any programmatic changes with legal counsel and your compliance consultant. 

3.) Location and provider indexing: 

A major administrative burden for CEs is identifying their employed or contracted providers when third-party administrators are enumerating contract-pharmacy claims. This is especially the case when maintaining a list of eligible locations. 

CEs are susceptible to errors of omission when identifying all potential encounters and order types that may generate eligible prescriptions. Also, they may not be made aware of new units and departments that stand up to address emergent clinical needs such as overflow units. 

For current R1 client partners, the referral-management platform delivers multiple activities to identify and publish potentially eligible claims for which technology cannot wholly solve. The client prescriber check queue identifies potential prescriptions from employed providers that slipped through the cracks with their third-party administrator prescriptions that did not get captured electronically (e.g., written or called-in) and present those claims to the client for additional eligibility consideration. The referral-check activity provides additional insight on prescriptions written by external providers where adjudicated claims are matched against a CE’s patient, and additional referral context is needed (e.g., referral is in a visit-summary note). 

Using R1’s 340B referral-management solution and their adjunct activities, CEs can substantially expand their existing 340B program by capturing additional savings not identified using their existing 340B vendor software. And because the referral platform provides the referring provider and supporting staff with easy access to specialist-consult notes, R1 fundamentally improves patient-care coordination and continuity. 

Our 340B experts can recommend adjustments and improvements to maintain ongoing compliance with 340B program requirements and identify opportunities to optimize program participation and savings. Learn more about R1 340B Recovery or schedule a meeting to talk to our team today. 

Donald Holladay, PharmD, 340B ACE 

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