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How Technology Plays Into Administering a 340B Drug Program


Oct 18, 2023
340B Drug Program

Thousands of healthcare entities around the country participate in the federal government’s 340B prescription drug program. The program guarantees discounts on certain outpatient drugs to program participants, known as covered entities. Covered entities rely on a combination of technology and administrative policies to maintain their programs.

How important is the technology side of things? In today’s digital world, it is critically important. Trying to administer a 340B program without the latest technology would be like a giant corporation trying to maintain its books using paper ledgers and calculators. Technology is nonnegotiable.

Program Administration Matters

It’s not unusual for covered entities to utilize the services of third-party administrators (TPAs) and 340B consultants. 340B Consulting firms, like Florida-based Ravin Consultants, offer services like mock audits, program design and implementation, and eligibility determination. Meanwhile, TPAs handle program implementation and administration entirely.

The point of this is to say that both TPAs and 340B consultants would not even dream of offering their services without the right technology. They know how important technology is to maintaining compliance. On the other hand, covered entities often rely on technology that isn’t purpose-built for 340B administration. That is not a smart move.

Accurate Records Are a Must

As with all federal programs, covered entities must abide by certain rules and requirements to participate in the program. Not only that, but they also need to document their compliance with said rules and requirements. There are two aspects to this documentation:

  1. OPAIS Reporting – Covered entities must report certain information to the federal government via the OPAIS reporting system. This includes information about off-site facilities and contract pharmacies.
  2. Program Reporting – Covered entities must also continuously maintain documentation for reporting purposes. This information must always be auditable and available for auditing at any time.

The HRSA conducts hundreds of audits every year. In addition, 340B rules allow pharmaceutical companies to conduct audits as well. This suggests that companies cannot take chances with their documentation. They cannot take chances with their technology either.

The right technology makes it easier to keep accurate records and maintain them. Properly implemented technology solutions reduce errors, identify potential compliance issues, and increase efficiency in the record-keeping process.

Technology and Split Billing

Another key role of technology within the 340B environment is accommodating split billing. Split billing is necessary because only a limited number of outpatient drugs are covered under the 340B program. Furthermore, the discounted drugs can only be offered to eligible patients.

Split billing helps covered entities track eligibility more easily. Their billing software should be set up in such a way as to easily identify eligible and ineligible patients as well as the specific drugs eligible patients can obtain through the program. And again, all this needs to be documented.

Reporting Is the Icing on the Cake

Technology fulfills the role of accurate reporting both internally and externally. In terms of internal reporting, it is as simple as the fact that covered entities don’t know what they don’t know. A well-designed technology package reports all the most critical information in an understandable way. It helps covered entities see both the big picture and program details simultaneously.

Accurate and understandable reporting on an internal basis prepares a covered entity for its external reporting. It gives covered entities the opportunity to make sure they are always prepared for an audit. Given that failed audits can lead to significant financial losses, it is in the covered entity’s best interest to make sure it is always audit ready.

Technology plays a significant role in administering a 340B program. Its importance should never be underestimated by covered entities, 340B consultants, or TPAs.

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