Case Study: Mid-Atlantic Hospital Adds Over 4,000 340B Claims

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Learn how partnering with R1 helped one DSH hospital capture referral prescriptions from Walgreens pharmacies, qualifying an additional 4,000 claims for 340B pricing.


A medium-sized Disproportionate Share Hospital (DSH) in the Mid-Atlantic region serving a large number of low-income patients qualifies for HRSA’s 340B Drug Pricing Program, which helps fund healthcare to the uninsured and underinsured. Almost 15% of people in the city live in poverty compared with the national poverty rate of 11.8%. The 340B Program, which the DSH has participated in since 2014, lets healthcare organizations purchase medications at a discounted price. The difference between the normal retail price and the discounted price helps 340B covered entities such as DSH hospitals to fund operations and continue providing care to a vulnerable patient population. One of its member hospitals was interested in building its 340B program by capturing referral prescriptions.

Business challenges

While the DSH has many different types of specialists on staff, it refers patients out for cardiology and rheumatology care. Resulting prescriptions are sometimes filled at local Walgreens and CVS pharmacies instead of by the in-house pharmacy. Because the prescribing physician is an outside specialist and the resulting medications are filled at contract pharmacies, resulting scripts are not easily included in a 340B program, despite the fact that the DSH manages care for these patients.

If a 340B covered entity (CE) such as a DSH can prove that it owns a patient’s care, prescriptions written by referred-to specialists can be included in a 340B program. However, the organization is responsible for obtaining and maintaining supporting documentation, such as encounter records, outgoing referral documentation and encounter notes from the referred-to specialist provider to qualify the referred-to provider as an eligible prescriber. The DSH was aware of the 340B funding available through referral prescriptions, but had not yet decided how to include these prescriptions in its program when it was made aware of a solution.


A Walgreens representative mentioned R1 340B Recovery to the DSH during one of its scheduled meetings. Upon learning that R1 partners with Walgreens for 340B referral prescriptions, the hospital decided to adopt R1’s 340B program (previously known as par8o 340B Referral Capture) in 2019.

During initial meetings, the DSH learned that 340B Recovery technology identifies prescriptions written by specialists and documents the relationship between the referring organization and the resulting prescriber. When a patient fills a prescription at Walgreens, R1 receives the prescription data from the pharmacy or third-party administrator (TPA). R1 compliance specialists then solicit encounter notes from referred-to specialists and review them for six different compliance checkpoints. Prescriptions meeting these compliance checks are qualified for 340B pricing, and specialist consult notes are made available through an online portal that can then be exported and placed into the DSH’s EHR.

Because R1 partners with Walgreens and can support HRSA compliance, the DSH opted to add R1 340B Recovery.

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