The big thing right now in the 340B program is contract pharmacies, this article will discuss what we have been doing with 340B contract pharmacies.
First things first, an update: we have been looking for a regional pharmacy director for my region (my 400 bed hospital, and two additional smaller hospitals) for about 12 months. We did not find a match and they settled on me. Haha, I hope it was not settling and that I have proven my self over the last 10 months helping manage the pharmacy without a director. Of course, I had lots of help, but that is one of my reasons why we have been less active on this website. Rich and I talk regularly, and we almost always say stuff like, “that would be a great article” or “we have to talk about that.” Well, I am pretty close to back-filling my manager position and decided to get back to 340B. Another reason is that we have residents at my site, and I project pitched a 340B project and one of them accepted. I am very excited about the opportunity to mentor and work with a pharmacy resident with motivation and time to complete a thorough project. I will share the fruits of this labor here.
The project: To identify community/outpatient pharmacies near our hospital for 340B pharmacy contracting opportunity. Create a contract template to be used with each community pharmacy. Evaluate and choose a software vendor that will meet our needs for efficiently and effectively working with community pharmacies to provide split billing opportunity, data collection, and reporting. Enter into contract pharmacy agreements and measure net output as offset to expense (we are not for profit, so we do not call this profit). Once we have some dollars coming back to us from these contract pharmacy agreements, create a model for taking a percentage of the dollars and providing increased and expanded charity care through a voucher program. Finally, measure the net impact of charity care provided to the community and potential increased health (potentially resulting in overall lower healthcare cost).
Rich and I have also been talking about using some of the knowledge gained through this experience and creating a turnkey operation for our rural facilities (critical-access hospitals). We are in our contract negotiation phase with a retail pharmacy. Until it is over, I will withhold comment. I will share what I can, when we are through contracting and we turn it on for our facility. I am excited about increasing the charity care to our community, because we need it really bad. I know we are not the only ones. I brought this up with our Community Outreach Director and she was thoroughly excited over the prospect of having more dollars she can provide to those in need.
Stay tuned for updates on our first contract pharmacy (technically our second, since my hospital outpatient pharmacy has been doing this for a couple of years now). If we can share some of our experience through this process and it makes your implementation easier, then I will consider this a win. As a side note, I will be at ASHP Midyear (mostly recruiting for our residency program), but if you have some experience to share or want to learn more about what we are doing, use the “contact us” page to send me your email and let’s set something up. As always, thanks for visiting. -Rob
Click here to see the Federal Register update in May 2010 on multiple contract pharmacies
Next to “What is 340B?” the question I frequently receive is, “Who qualifies for 340B?”
Here is the quick answer for the more common options (a more detailed list can be found at the OPA website):
- Disproportionate share hospitals (DSH)
- Children’s hospitals
- Critical access hospitals
- Free standing cancer hospitals
- Sole Community Hospitals
- Ryan White Clinics
- State-operated AIDS Drug Assistance Programs (ADAP)
- Black lung clinics
- Comprehensive hemophilia diagnostic treatment centers
- Native Hawaiian Health Centers
- Urban Indian organizations
For DSH hospitals, you do need to meet the minimum level of 11.75% DSH percent. I’ll need to create a separate article to thoroughly cover what goes into this number (hmm, I might have to do that next), but it is roughly a combination of Medicare with supplemental social security over total medicare days and Medicaid (non Medicare) over total patient days. If this sounds confusing, well . . .
If you are one of the entities above, you can find the forms you need to register at the OPA 340B forms site.
The Government Resources for the 340B Program
If you are a 340B entity, then you know resources are scarce for the 340B program. The primary government resource for the 340B program is the Office of Pharmacy Affairs (OPA). The OPA is part of the Health Resources and Services Administration (HRSA), which is an agency of the US Department of Health and Human Services (HHS). The OPA is responsible for managing the 340B program implementation with covered entities according to section 340B of the Public Health Service Act. They also have some good information on their site regarding the 340B program. When I need to know specifics about the program, I start with the OPA since they are they manage the program. As a side note, the OPA used to be purely funded through HRSA’s budget (which means it didn’t get too much since their budget for 2011 was decreased from 2010), but in 2011 there was some legislation (starts in 2012) that requires a 340B program user fee of 0.1% of drug cost to be paid by covered entities (the hospital or clinic) to HRSA. To be honest, I think this is a good thing for the program and helping to ensure it will stay around.
The next 340B program resource that is provided by our government is the Pharmacy Services Support Center (PSSC). The PSSC is a joint venture of HRSA/OPA and the American Pharmacist’s Association (APhA). I find this fascinating (a professional organization working with a government organization), but am very proud of APhA for partnering this way. The PSSC serves as the primary access resource for the 340B program. This is probably the third place I go to for 340B information, and the website does provide a lot of good information.
There is another resource that I consider my number two place to go for 340B information (and often number one). It isn’t part of the government, and they do provide some free information; however, the more detailed information is for members. I will provide a separate more detailed post soon on the benefits of Safety Net Hospitals for Pharmaceutical Access (SNHPA). I will say now, that SNHPA is a non-profit organization that plays a critical role in helping the 340B program stay around to benefit the covered entities who rely on the 340B program’s benefits for staying afloat in these difficult times.
My 340B hospital has a young demographic and therefore a lot of babies (we are a not for profit 340B DSH hospital). For instance, our average census in our newborn ICU is 42 (and we have seen our census peak at over 60 infants in the last few months). This correlates with a lot of need for Synagis®. Although we usually provide the first dose in the hospital (which does not qualify for 340B pricing), many infants are discharged and need to receive future doses as an outpatient. Many pediatricians do not want to or will not buy and administer Synagis due to high drug cost, marginal reimbursement from Medicaid, and a time consuming prior authorization process. I know, so why in the world would a hospital do it, NOT because we love to create challenging situations where the chance of successful reimbursement requires a lot of staff time. We do it for the babies. These babies could have added protection from a life threatening RSV infection, and so it goes without saying that it is the right thing to do (which is the reason we do a lot of things in healthcare, and the right reason).
What does the 340B program have to do with a Synagis clinic? A lot really. It is difficult to obtain buy-off from administration on a new service if it will lose money (trust me, I have tried). Sure, the insurance companies will cover the cost of the medicine (well, most if the time), but what about physician time, nurse administration, staff time for prior authorization, and everything else that involves getting a medication from the pharmacy to the patient. Not to mention opportunity cost, could we have seen patients that would have had better reimbursement for cost? This is where 340B comes in. With 340B pricing, we can create a win-win for everyone, which ultimately results in better RSV protection for a vulnerable, high-risk group of babies.
Please remember, this is what 340B is supposed to do. . . Help Our Patients! Yes, it helps offset costs for hospitals and clinics who take on a disproportionate share of CMS and indigent patients, but we ultimately need to help our patients.
We endeavor to share our 340B program experience, including our current trials and tribulations with implementation of the 340B program within our DSH and critical access hospitals.
Our hope is that you will learn with us as we maneuver this will intentioned, but difficult to implement cost savings 340B legislation.
If you are new to 340B and want to learn the basics, then go to our 340B Basics page for more information.