20201015 Demystifying Referrals RVS Blog Series - De-mystifying referrals: Why covered entities should incorporate referral verification services into their 340B program

De-mystifying referrals: Why covered entities should incorporate referral verification services into their 340B program

Referrals to specialists are common in healthcare, generated by an average of one out of every three doctor’s visits each year. But when prescriptions are made by an outside physician, many safety net providers overlook them for 340B eligibility — either because they believe the prescriptions are ineligible and non-compliant, or the covered entities (CE) lack the necessary provider data and don’t have the time or resources to track it down.

It’s important to understand that capturing referrals for eligible patients is 100% compliant with 340B regulations. So don’t let the complexities of managing referral provider relationships prevent you from realizing additional 340B benefit.

From a medical perspective, there are legitimate referrals-out and referrals-in. However, 340B prescriptions only qualify on referrals out. Take-home prescriptions written by a non-credentialed physician outside the CE do not qualify unless there is a referral documentation trail from the CE, both to the outside physician and a report back to the CE.

Why referrals are 340B compliant

While the 340B program certainly includes its share of gray areas, the statute is clear about the compliance of referrals. In fact, it’s literally written in as one of three points defining patient eligibility in the Health Resources and Services Administration’s (HRSA) 340B statute, which are summarized as follows:

  • An outpatient of the covered entity who has received healthcare services from an outpatient department, clinic or service facility that has reimbursable costs and charges on the most recently filed Medicare Cost Report.
  • That the provider must be on the eligible prescriber list as employed by the entity, or under contractual or other arrangements with the entity.
  • That the responsibility of care remains with the covered entity.

In this case, a referral has been well documented under the guidance to qualify as “other arrangements,” so long as the covered entity can demonstrate that it is responsible for the patient’s ongoing care.

And that’s key: Take-home prescriptions written by an outside physician will not qualify unless there is a trail of referral documentation from the covered entity to the prescribing physician, along with a report back to the CE.

Covered entities that plan to start capturing referrals should also make sure that they address how they are managed in their 340B policies and procedures. A simple paragraph can be used to explain that the CE refers eligible patients out and that, so long as the notes from the provider can be obtained, the CE maintains oversight of the patient and the prescription is 340B eligible.

In next week’s installment, we’ll run some numbers on referral savings and discuss how the uncertainty swirling around the 340B drug program make it imperative for covered entities to act now.