This video is the second in a series on how to leverage the 340B program. See Part 1 here.
Why Would a Hospital Want to Participate in the 340B Program?
Administering a 340B program comes down to one word: discounts. The 340B discounts are generally much deeper compared to what hospitals typically procure. The savings easily range from 20% to 45% below their GPO prices. A study of 340B reported that hospital savings are around $11.8 million per year. When the 340B program is applied to the employee benefits program, the hospital’s savings and rewards are even greater, as the hospital is able to leverage its cost of goods and keep valuable healthcare dollars in-house.
Which Prescriptions Qualify for 340B Pricing?
Even though the hospital is registered as a 340B covered entity, not all prescriptions that come out of the hospital are 340B-eligible. The covered entity must have an established relationship that meets the HRSA patient definition with the individual filling the prescription to be eligible. This means that the hospital must maintain medical records of the individual’s care. The prescriber also must either be employed by the covered entity or have some type of contractual arrangement, such as a referral relationship. Therefore, employee prescriptions only qualify when they meet the patient definition and are written by an eligible prescriber. Additionally, 340B pricing only applies to outpatient prescriptions. Lastly, Medicaid and managed care prescriptions are ineligible and are blocked to prevent duplicate discounts.
With the opportunity to achieve significant savings through the 340B program, it always makes sense for a hospital to explore its options as a covered entity and consider how it can maximize savings for eligible prescriptions and patients – including the hospital employees.