Indigent care programs were designed to alleviate financial burden on hospitals and health systems for patient-assistance, but they require a high degree of organizational alignment and communication to coordinate. A 340B program requires strong pharmacy leadership and implementation of several key operating procedures for health systems to realize the benefits of this important safety-net program.

Most conversations we have with business leaders about their participation in the 340B drug discount program fall into one of three buckets of concern.

In the first bucket are providers worried about being audited because they aren't fully compliant with the program's rules. In the second bucket are providers worried about keeping up with changes to the program's rules. And in the third bucket are providers following the eligibility rules but worried their programs are not as fiscally effective as they can be.

No matter what the concern, there are several operational strategies that can help to better manage your program.

Institute Routine Checks of 340B Tracking Systems

How to Manage Indigent Care ReimbursementPharmacy leaders often participate during the program set up and provide input on the settings they think will capture all the data they need. But, they never go back and check the results of what they've set up for compliance purposes. Often times, the tracking systems aren't capturing the right data or are capturing data incorrectly.

This is borne out by the public results of the 340B compliance audits done by the Health Resources and Services Administration, which oversees the 340B program for HHS. The most frequent audit finding is "Incorrect 340B Database Record."

To mitigate this compliance gap, you should conduct audits to see what captured data is telling you and what is ultimately getting reimbursed. Is the software set up properly to produce the results your health system wants? Pharmacy leaders should initiate these audits on a regular basis and ask their vendors to fine tune their tracking software accordingly.

Align Supply Chain and 340B Functions

The second operational strategy involves aligning your hospital or health system's supply chain system and its 340B program. The supply chain and 340B functions must support each other and work in an integrated manner. That's challenging for hospitals and health systems with multiple sites that purchase and dispense drugs to a diverse patient base. The situation can be exacerbated by drug shortages, product changes, dispensing changes and new prices for brand name and generic drugs.

At a minimum, all purchasers at every provider site must enter their drug purchases into the supply chain system and must be cognizant of the impact of each purchase on their health care organization's 340B program. Ideally, purchasers at each site will recognize opportunities to make drug purchases through the supply chain system that will support – not undercut – the 340B program and vice versa.

You should be running monthly or weekly performance reports to verify that opportunities aren't being missed and that the opportunities being taken benefit the organization and its patients.

Better Communication, Better Compliance

The third strategy is to dedicate time to communication and program advocacy. Hospitals and health systems not engaging in regular dialogue about their 340B program are not able to relay important program modifications to staff charged with compliance. Pharmacy leaders may be aware of important 340B program changes, but fall short when relaying the significance of those changes up in their organizations and then don't obtain the resources they need to deal with changes effectively.

Hospitals and health systems might consider participating with national and local associations and their peer organizations to stay up to date on 340B matters.

Inside the organization, pharmacy leaders must be in alignment on 340B with their chief compliance officer and chief financial officer. Regular communication and meetings among pharmacy, compliance and finance are essential.

The 340B drug discount program is complex and ever-changing. Technology is critical, but beyond technology, a successful 340B program requires organizational alignment, monitoring, and communication.

To learn more, read "Strategies to Manage Your 340B Program," also by Wilson.

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About the author

Dr. Andrew Wilson is one of the nation’s foremost experts on the federal 340B program. He leads a team of consultants and pharmacists dedicated to providing pharmacy management, operations and financial advisory services to 340B program customers. With more than 25 years of health care operations experience Dr. Wilson has provided leadership in big four accounting firms, academic medical centers and integrated health centers, including a role as pharmacy director for Saint Louis University Hospital.

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