The Health Resources and Services Administration (HRSA) audits about 200 participants in the federal 340B Drug Pricing Program each year. If you’re chosen for an audit, the quality of the software solutions your 340B third-party administrator (TPA) provides may determine how well you stand up to that scrutiny.
First, just what does a TPA provide? Typically, they work with covered entities to implement key parts of their 340B programs, matching contract pharmacies’ prescription claims with patient data provided by the hospital or health system to determine eligibility for the 340B program. Ideally, these efforts will generate cost savings for the covered entities while ensuring that they are in compliance with the program’s statutory requirements.
TPAs rely heavily on technology to deliver these services, with split-billing software being one of the key components. These programs separate inpatient and outpatient hospital charges from 340B-eligible areas to identify all outpatient charge codes for 340B pricing.
Apexus, the 340B Prime Vendor Program, offers a detailed list of key attributes for split-billing software on its 340B Tools website, under the operational/purchasing category at bit.ly/3mpNOwv. Here are five key points to remember when assessing vendors and software programs, according to Apexus:
- Split-billing software acts as a tool for helping to track 340B eligibility. All software settings should mirror the 340B patient definition as specified within the covered entity’s policies and procedures.
- The performance of the software depends on the quality and accuracy of data imported to it, the options selected to configure the software and the ongoing maintenance of the software by the software provider and entity.
- Entities have a choice for how to configure their software, but certain configurations are associated with a greater risk for noncompliance.
- The entity is ultimately responsible for program compliance, and this responsibility cannot be outsourced to a split-billing software company.
- The entity itself is subject to HRSA and manufacturer audits, so it is critical for the entity to take time to carefully select, configure, maintain and check its split-billing software.
More Variables Come Into Play
Still, split-billing software isn’t the only basis for assessing whether a TPA’s technology offerings are a good fit for your facility. Here are some additional considerations:
Data reporting. The quality of the data reports TPAs can provide will go a long way toward ensuring an effective partnership, noted Kenny Yu, PharmD, MBA, the senior director of pharmacy services for NYU Langone Health, in New York City, and a 340B Apexus-certified expert. “The ability to create reports is instrumental to 340B program compliance and optimization,” Dr. Yu said. “You don’t know what you don’t know.”
More specifically, “you have to be able to pull your reports, customize them, and slice and dice your data in different ways pretty frequently,” he explained. “You want more than just canned reports. There will be times when you need to ask for more specific angles that are pertinent to your situation. As you’re considering a TPA partnership, do your due diligence by giving them complicated situations that you are going through or have in the past and see what their response is.”
The ability to run real-time data is another important data capability to look for, said Kristin Fox-Smith, MPA, the managing director at Visante. “Some TPAs have 10 canned reports and others have more like 300. To get more than the preset reports, you often have to pay for programming time. If you are going to have to pay for additional reports, you may be better off going with a vendor that has a wider variety of standard reports.”
Systems integration. Do your TPA’s technology offerings play nice with your health system’s other software platforms? That’s a critical consideration because “the 340B program operates in the broader environment of the hospital pharmacy and electronic health record software, as well as the business practices and preference of each hospital,” said Chris Shain, PharmD, the assistant vice president for 340B solutions at McKesson Health Systems, a TPA partner.
Access. “Some vendors allow you to log in regularly and make changes to your configurations, such as when providers are coming on and off your provider lists, while others do not,” Ms. Fox-Smith said. “Some do not allow the [covered entity] to even view that information, let alone make changes to it. You have to turn in a ticket and let them know if you have added or removed a location or a provider. That can take two or three weeks in some cases, and meanwhile those transactions are qualifying in error.”
Built-in protections. It helps to have a TPA that will protect you from yourself, Ms. Fox-Smith said. “Some TPAs require that you update your provider and facilities lists every 30 days, and will force a stop until you do, while others don’t require that you ever update key files. I’ve had [covered entities] with multimillion-dollar repayments because of this. In one case, a large DSH [disproportionate share hospital] facility made a mistake and only put eight doctors on their provider list when they had thousands. It took months for them to figure out why they weren’t getting any revenue return from their contract pharmacy program. Look for a TPA that puts flags in place to prevent the [covered entity] from making mistakes.”
Pending claims. You may miss out on savings if your TPA does not have the ability to handle pending claims, Ms. Fox-Smith said. “Let’s say your system has built a new facility and added an ambulatory surgery location that is eligible for 340B, but the pharmacy and 340B program were not notified about adding this location, which is common,” she explained. Ms. Fox-Smith added that some TPA software has a feature that will “pend” the claims from that location, which means the claims will be set aside as pending, instead of either qualifying it or excluding it. By doing so, end users can review the 340B claim and try to fix it.
“They will not automatically qualify them in error, but they will not exclude them either, providing the [covered entity] the ability to update their location list and solve for this error moving forward,” Ms. Fox-Smith said.
Another pending option available from some vendors involves configuration points. “Most vendors have three, four or five configuration points that a claim has to meet in order to be considered as eligible for 340B,” Ms. Fox-Smith noted. “With some vendors, if a claim does not meet all their required configuration points, it is automatically denied with no opportunity to correct or update. But others have a pending feature for claims that appear to meet some but not all the configuration points, and you can then sort them, work the claim, determine if it does meet the requirements and recoup the revenue. That can be worth hundreds of thousands of dollars a year.”
Adequacy of Customer Service
A TPA can check every one of these 340B technology boxes and still be a bad fit if it has poor customer service. That’s why training and support after implementation are so essential to making the most of your TPA partnership and optimizing your 340B program, according to Bibi Wishart, PharmD, MBA, the 340B program director at Atrium Health.
“You need a good relationship with the customer service team,” Dr. Wishart said. “The more that you work with them and … understand the TPA’s offerings, the more you’ll get out of it.”
The sources reported no relevant financial disclosures.