It’s a new year, and as we’ve been saying, 2023 promises to be an eventful one for the 340B program. Between stepped-up scrutiny from Congress and the media, the likelihood of more contract pharmacy restrictions from manufacturers, the pending appeals court rulings, and a decision about how to remedy years of Medicare Part B underpayments to hospitals, covered entities should prepare themselves for the glare of the spotlight. It’s time to put a strong defense on the field.
Here, I’ll offer a list of 10 things covered entities should do now to put themselves in a good position to stay on the front foot.
1) Meet with your government affairs team. Whether you’ve never met them, or it’s been a while, connect with your organization’s government affairs team. They likely have relationships and can relay information on your behalf or provide you the opportunity to talk to your legislators directly. You’ll want to have your voice heard when the inevitable legislation emerges, or a House committee announces a hearing on 340B.
Transparency and reporting are likely to emerge as hot topics in Washington, as the first 340B bill in 2023 (H.R. 198) demonstrates. Traditionally, it’s been hard to report drug spending or revenue by service line, much less pinpoint exactly where 340B savings go. What information would you be able or willing to report? What couldn’t you report? Like it or not, covered entities need to start thinking about how transparency inquiries may impact them. Start working with your 340B steering committee on transparency requests. Could you report benefit by service line? By payors? Uninsured versus commercial? Community benefit?
2) Meet your legislators — especially the new freshmen. As we’ve previously written, 340B is likely looking at a rougher road in 2023, with Republicans in control of the House (some members in key leadership positions are already talking about holding hearings about transparency). There are 82 freshmen House and Senate lawmakers. Many will need to learn about 340B and its importance to vulnerable patients and the healthcare safety net. Don’t wait and let the pharmaceutical industry give them its own spin on 340B. You can find your congressional representative here.
3) Lobby your state lawmakers and associations to protect 340B. State legislatures have shown encouraging success passing anti-discrimination laws that prohibit insurers and pharmacy benefit managers (PBMs) from lowering reimbursement or enacting onerous rules for covered entities. Arkansas’ state law goes a step further by prohibiting manufacturers from restricting 340B pricing at contracted pharmacy locations (the drug industry is suing to have the law thrown out).
These laws are especially important now that many entities are choosing to submit claims data using third-party platforms to regain access to 340B pricing. That’s valuable information that may be used to lower reimbursement for contract pharmacies and siphon more of the savings from the covered entity. Your state associations can also help navigate and advocate for a larger collective voice within your state.
4) Create and share your impact report. Distilling your 340B program into an impact profile is a great way to tell the story of how the program benefits your organization’s safety net mission. With 340B under growing scrutiny, you never know when an enterprising reporter will call wanting to know what your organization is doing with the savings.
Don’t let someone else tell that story. Ask yourself the kind of questions a reporter would ask. Describe the effect the contract pharmacy restrictions — and having to submit contract pharmacy data, if applicable — are having on your operations and ability to serve your community. If your patients are losing access to key drugs, or your organization is losing out on significant savings, make sure that is reflected. Hopefully, you feel confident your answers show you’re doing all the right things.
You can find an impact report template at 340B Health.
5) Keep an eagle eye on your reimbursement. Every 340B program leader needs to understand where the money is going: What are your expenses, and how much are you getting reimbursed for dispensing these drugs? Knowing your top five payor sources will help you know what to expect from a revenue perspective each month.
Carefully monitor your commercial insurance sources. If payment levels go down, but volumes haven’t changed, something needs investigating. Again, it could be that insurers or PBMs are helping themselves to a cut of your savings, thanks to all that claims data you’ve been submitting. Monitoring reimbursements is more work, but the new reality demands that we watch the numbers like never before.
6) Monitor manufacturers for price changes. We’re about to embark on a new drug-pricing law that will be slowly implemented starting this year. It will be important for covered entities to know their top drug manufacturers so you can evaluate how any price changes will affect your organization — and the direct effect on 340B.
We also can expect more drug makers to join in on data collection models and restrict access. Once a manufacturer announces such a policy, you should be able to know immediately how it will affect your hospital so you can keep your steering committee apprised. Manufacturer policies will be the 2023 problem for everybody.
7) Perform a mock audit. It’s always a good idea to ensure your program is compliant and running optimally, and it’s an especially good idea now. Hospitals are facing major staffing shortages, so some covered entities consider hiring an outside auditor. If you’re a Craneware Group customer, you can use our Sentrex audit tool — or enlist help from our Senturion services team to audit claims.
8) Review your organization’s policies and procedures for updates and changes. Like your software configurations, you should review your policy & procedures each year to ensure that either everything is the same, with no changes needed, or something has changed and needs to be reflected in your documentation. This is a major component of a HRSA audit.
9) Review your software configurations with your account management team. Even if your software is running like a well-oiled machine, take a step back and review your configurations as part of what I like to refer to as 340B housekeeping. Maybe the business side of your pharmacy has changed, or your 340B policies and procedures are being updated. With HRSA audits in mind, check that your policies and procedures match your software configurations.
As part of your business review at The Craneware Group, your account management team can help you take a deeper dive to ensure your configurations are optimized to maximize program benefits in changing conditions.
10) Schedule time for your 340B Steering Committee. I always recommend that covered entities invite someone from their software vendor to one of these meetings. That way they can help answer questions, learn about organizational changes, and make recommendations. It also gives hospital staff insight into what the software is doing and how it’s supporting the covered entity and the program.
Best wishes for success in 2023!
If you’d like to continue the conversation with me, schedule a time that works for you and I’ll be in touch!