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340B Compliance: Making It Pay

340B Compliance: Making It Pay

by: Bob Steller | May 6, 2024

A compliant approach to 340B pharma processes for higher profits

Do you know a surefire way to eat away at your razor-thin margins? Manual processes involving government compliance. As a pharmaceutical manufacturer, you’re already in a challenging position managing numerous contracts with your wholesalers. While our new eBook, IRA Compliance: Getting Quality Right The First Time, focuses on IRA compliance and best practices, we would be remiss in not giving attention to 340B exposure and the crucial steps needed to remain compliant so you can benefit from continued revenue growth. 

340b Compliance

Are you underexposed or overexposed to risk?

The 340B program was created to help underinsured and under-served patient populations access outpatient drugs at significantly lower costs. For you, as a pharma manufacturer, it is a complex process to manage. Its rapid expansion and substantial modifications have created the possibility that not all transactions and purchases are valid under the program. There’s also been a significant expansion in 340B pharmacies, particularly contract pharmacies used to dispense the program. Both factors make it crucial to remain error-free in managing your 340B program, from calculating pricing to generating an audit trail from your perspective, as well as addressing channel providers and third-party operations. 

Eliminating errors starts with effective risk management by fixing what you can control, such as moving from manual to automated processes. Only then will you be able to use advanced analytics and machine learning to improve risk management further and strategically plan to avoid revenue leakage. Other risks you face, such as heavily regulated compliance, chargebacks and 340B double-dipping, are important and profoundly impact your margins. When you automate, you can accurately track essential elements important to compliance. 

Mindfully managing your 340B program

For complex pricing models such as 340B, the ability to focus on execution and analysis rather than managing manual processes provides you with comprehensive visibility, transparency and accuracy. An end-to-end solution for monitoring compliance, pricing, contracts and data collection makes managing the 340B process more viable. However, if your company doesn’t have the technology to support data sharing and operational methodologies, challenges and hurdles will prevent the viability of compliance. It’s crucial for your audit trail to always be impeccably accurate and up to date for Health Resources and Services Administration (HRSA) compliance efforts. 

The increasing need for internal and external data sets will require capturing multiple data sources and rationalizing what data is needed in real-time. Additionally, compliance and pricing nuances add complexity to your Gross-to-Net process. With the right end-to-end solution, you gain a synchronized, enterprise-wide pricing and contract management system that can handle complex productivity.  

Managing the various report outputs is cumbersome because each state defines what to disclose, how to disclose and to whom you should disclose differently. You need a solution that can streamline the process by enabling you to create and reference templates that address unique reporting needs, including data and rules.

340b Compliance

Is double-dipping costing you money?

Chargebacks are one of your most significant expenditures and processing them accurately should be a top priority. Even the most detail-oriented finance team doesn’t have the capacity to validate every line against the contract. This opens you up to revenue leakage. And in the world of 340B duplicate discounts or double-dipping, you will feel the impact of lost revenue. 

You are likely familiar with the chargeback process for 340B and know that receiving both a Medicaid rebate and 340B pricing is prohibited. Another scenario exists when 340B savings are paid out on a commercial claim that also received a PBM manufacturer rebate. 

You are at great risk for errors when receiving data from different sources in different formats. If you need the data for reporting, compliance and analytics, you must manually format and combine the data into your own processes and master spreadsheet. What is worse than organizing spreadsheets and PDF data into your own master? Losing some of the data along with your profits. 

340b Compliance

Our POV for making 340B pay

8 steps you can take to confidently conclude that 340B claims are legitimate and accurate to reduce the risk of compliance and revenue leakage:

  1. Gain real-time transparency into the eligibility of covered entities (CEs) and covered contract pharmacies (CPs) entering and leaving the program on an ongoing basis by creating dynamic memberships to test against
  2. Validate the chargeback claims by ensuring that the entity that purchased the 340B ID or is associated with the 340B ID is in the HRSA database before payment based on the PHS contract and membership
  3. Incorporate analytics and reporting dashboards to track wholesaler sales to PHS entities
  4. Examine both the PHS price and non-PHS price plus the units sold to determine if that is what is coming back on the chargebacks
  5. Use analytics dispensing data to determine if purchases are tracking correctly with sales out
  6. Achieve real-time reporting and complete visibility into tracking qualified CEs to accurately know whether to process the rebate through a third-party entity or directly to the CE, avoiding Civil Monetary Penalties
  7. Review real-time claim data for purchasing patterns and accurately determine if a claim is for a 340B patient, avoiding duplicate discounts
  8. Use analytics to identify if the 340B product may have been used for commercial or managed Medicare/Medicaid claims

An end-to-end solution provides a single source of truth that allows you to gain a compliant, strategic advantage in managing your 340B programs. By capturing data utilizing predictive capabilities, your teams hold an implicit trust that they are getting accurate answers and can make informed decisions. In the end, accurate data will lead to informed decisions, and better decision-making will lead to higher profits. 

Pharma government compliance you need to know

Reference complex components of the Inflation Reduction Act

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Prevent the risk of compliance penalties

Download Our IRA Compliance Ebook