Navigating the Challenges of Ineligible Claims in the 340B Drug Pricing Program

Juli Cooper
May 1, 2023
Blog Articles
January 31, 2024
January 31, 2024

Understanding the 340B Program and its Presenting Issues

The 340B Drug Pricing Program is a federally-run initiative that allows eligible healthcare organizations to access outpatient prescription drugs at discounted prices. It was initially established with the aim of supporting safety-net providers like clinics and hospitals that cater to low-income and uninsured patients.

However, in recent years, there has been a significant increase in ineligible 340B claims as well as large contract pharmacies, posing a growing challenge for the program and the pharmaceutical companies involved. The problem of ineligible 340B claims arises when providers that are not eligible for the program purchase drugs at the discounted 340B price.

This can happen for a variety of reasons, including administrative errors, confusion over eligibility criteria, and intentional fraud. The cost of these ineligible claims can be staggering, amounting to billions of dollars lost to the manufacturers in the industry, with a cost increase that trickles down to patients.

Ineligible 340B claims can have serious consequences for those involved. For manufacturers, these claims can result in exorbitant revenue leakage, as players receive pricing they are not entitled to, incorrectly applied to the program.

What contributes to these difficulties?

One of the major issues with the 340B drug pricing program is the current reliance on manual maintenance work as well as the ever-changing legal landscape of the 340B program. This has resulted in a number of challenges for program administrators and healthcare providers, including difficulty in managing and identifying eligible contract pharmacies, as well as confusion around chargeback adjudication processes.

One of the key challenges is a shift in management among contract pharmacies. This can make it difficult for program administrators to keep track of which pharmacies are eligible for the program and ensure that they adhere to program requirements.

Additionally, the manual work required to maintain updates from the HRSA database can be time-consuming and error-prone, leading to inaccurate and non-exhaustive contract eligibility data. This, in turn, can lead to confusion and disputes over which contract pharmacies are eligible for the program and which are not.

Ultimately, these challenges have significant downstream impacts, including inaccurate contract eligibility determinations and confusion among healthcare providers over which contract pharmacies are eligible for the program and which are not. Chargeback disputes can arise from this discrepancy.

A Better Path Forward

To address these challenges, it is essential to shift towards more automated and streamlined processes, such as those provided by MediLedger’s blockchain-based platform. By leveraging the power of blockchain technology, healthcare providers and program administrators can securely and transparently access and verify eligibility data in real-time, reducing errors and ensuring that eligible contract pharmacies are accurately identified and included in the program.

MediLedger’s Approach to 340B

MediLedger’s blockchain-based platform provides a comprehensive solution for managing the challenges associated with the 340B drug pricing program. One of the key components of this solution is the the management and communication of contract pharmacy exceptions and exhaustive 340B contracts, as well as accurately adjudicating 340B chargeback claims.

The 340B Eligibility Add-On on the MediLedger network plays a critical role in ensuring that the program runs smoothly and efficiently for network participants:

  • Contract Pharmacy Exception Management: Identify contract pharmacy exceptions from the entire list of contract pharmacies provided by HRSA. These exceptions can be managed at a global or contract level, and at a node-specific manufacturer level. This list can then be automatically communicated in real-time to trading partners either as a supplemental roster or as part of a PHS contract.
  • 340B Contract Eligibility Determination: Configure contract eligibility rules and automate the construction of PHS contract eligibility lists. This helps to ensure that eligible contract pharmacies and covered entities are accurately identified and included in the program, reducing confusion and disputes among healthcare providers.
  • 340B Chargeback Adjudication: Enforces 340B-specific adjudication rules, helping to prevent chargeback disputes and ensure that eligible contract pharmacies receive the cost savings they are entitled to and that non-eligible contract pharmacies do not drive confusion and disputes.

While the 340B program is a vital source of cost savings for healthcare providers serving low-income and underserved populations, issues with ineligible 340B claims have become a growing problem in recent years, leading to revenue leakage for manufacturers in the industry.

MediLedger’s innovative blockchain-based platform provides a comprehensive solution to address the challenges associated with the 340B program. By leveraging the power of blockchain technology, providers and administrators can ensure that the program is being used as intended, and that cost savings are being passed on to those who need them most. Ultimately, this helps to ensure that the 340B program remains an effective tool for supporting safety-net providers and improving access to affordable medications for those who need it most.

To learn more about MediLedger, schedule a demo here.

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