To some people, the very mention of ‘340B’ can be met with confusion and misunderstanding. The fine print underneath of federal laws and changing circumstances can leave those who aren’t up-to-date on the industry in the dark about their 340B eligibility.
First, let’s look at the definition of 340B.
The 340B Drug Discount Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.
In short, the program gives savings back to the covered entity to be able to provide more services to those who are, in many cases, less fortunate.
So, how do you know if your facility is in fact eligible for 340B reimbursements?
There are six categories of providers eligible to participate in the 340B program.
- disproportionate share hospitals (DSHs)
- children’s hospitals and cancer hospitals exempt from the Medicare prospective payment system
- sole community hospitals
- rural referral centers
- critical access hospitals (CAH)
We can then break down 340B eligibility into four categories:
(Each category must be met for a 340B claim to be eligible for reimbursement.)
- The Provider. They must be a federal grantee or non-profit organization contracted to provide services on behalf of the government. And must be registered on the OPA database.
- The Prescriber. The prescription must be written by an employed or contracted prescriber. This must also be written from within an eligible provider location (that meets 340B eligibility) that is registered on the OPA database.
- The Pill. The drug itself must also meet a several criteria before being eligible to meet 340B eligibility. The medication must be prescribed for OUTPATIENT use only. The drug must be on the 340B formulary. The prescription must be filled at one of the covered entities registered 340B pharmacies. There must also be no dual discounts, i.e. it cannot be paid for by Medicaid.
- The Patient. Must have an established relationship with health records maintained by the covered entity.
340B program requirements can be difficult to wrap your head around. Luckily, CaptureRx’s 340B management software takes the hassles out of managing your 340B administration requirements. For more information, please contact our sales team to sign up for a free demo.
If 340b eligbility is still confusing, see https://www.340bhealth.org/members/340b-program/overview/ for further information.