Case Study: Rural New England Health System Funds Critical Services Through 340B Referral Capture

Two nurses using a computer in a x-ray room


A leading healthcare provider and 340B covered entity in New England with one disproportionate share hospital (DSH), one critical access hospital (CAH) and 320 combined beds provides inpatient acute care for its county. Through its network of 28 clinics and 51 office locations, the health system offers a continuum of programs and services that help rural patients connect to the care they need. Like many small and rural health systems, it wanted to optimize pharmacy discounts through the federal 340B Drug Pricing program to help fund community health initiatives and improve patient services.

“We actually fund all our specialty clinics through the 340B savings, as well as some of our hematology, oncology, neurology and endocrinology. We have three renal dialysis centers that we fund through 340B savings as well,” says the 340B program manager.

Recruiting clinicians is a constant pain point for rural health systems; for this organization and others that means having to frequently refer patients to outside specialists. Those referral providers often write prescriptions that can be claimed by the referring organization for 340B pricing — if the referring organization remains the covered entity providing primary care to the patient. But capturing those scripts and turning them into claims and discounts proved to be a daunting task. The health system’s 340B experience had convinced them that there were additional savings opportunities in capturing prescriptions from referral providers, but they lacked the internal expertise and infrastructure to pursue them.


The health system realized that it needed a strategic partner to help capture the 340B savings they could not realize on their own. But having been through an HRSA audit with findings in 2016, they also knew that compliance was paramount in their efforts — they simply could not afford discount pricing losses or program exclusion.

“The number one thing we really look for in our partners is quality,” says the 340B program manager. “We considered the overall product compliance integrity and customer service and there were a few points along the way that stood out. The track record of 100% successful HRSA audits without findings and the ability to offer a compliant product that helps protect and grow our program at the same time really put R1 ahead of the competition.”

The health system ultimately selected R1 340B Recovery to help it achieve program goals while remaining compliant with program requirements.

“The process improvements have proven quite valuable. Helping us match the referral data with the data from the contract pharmacies accurately, letting us verify that match, and then reaching out for us to obtain consult notes and other documentation to qualify the claim — it really saves us valuable business office and IT resources that we’re able to allocate to other areas,” says the 340B program manager.


Since going live in April 2021, the covered entity has captured thousands of claims and hundreds of specialty consult notes that helped close the loop on their outgoing referrals. Daily feeds from the EHR into the R1 340B Recovery platform flag any claim without a matching referral. Those claims are routed to the health system team via the customer portal for review. In 2 years, the health system has captured savings that would have otherwise fallen through the cracks.

“Because of the outstanding growth in savings, we are adding more pharmacy liaisons to our primary care clinics to help patients with prior authorizations and adherence and refill requests. That really increases patient satisfaction because they know, no matter who the referral provider is, they have this one person here always helping them with their medications,” says the 340B program manager.

With a comprehensive referral capture program in place, the health system has been able to deploy staff more strategically and effectively.

“Having R1 reaching out to referral providers on our behalf helps us get what we need to qualify referrals compliantly and it allows us to use our internal resources to really monitor compliance, continue auditing and make sure that the integrity of our program is solid and safe. And honestly, if we didn’t have this partnership, we probably would still not be capturing referral prescriptions,” says the 340B program manager.

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