The Evolution of 340B and the Challenges it Faces; is Technology the Answer?
Recently, research has brought to light the evolving focus of 340B in some hospital systems. What started out as a way to provide affordable healthcare to underserved populations has turned into an integral part of our healthcare system and drug purchasing decisions.
Before we dive into that, let’s take a step back, what is 340B? 340B is a drug pricing program enacted by Congress in 1992. This program gave underserved healthcare providers relief from high drug prices similar to the one provided through the Medicaid rebate law.
Due to participation in 340B being dependent on the amount of Medicaid patients treated, the increased expansion of Medicaid under the ACA allowed even more hospitals to become eligible.
Fast forward 30 years, 340B has grown to cover over 11% of the pharmaceutical sales, topping out at 80.1 billion dollars in 2020.
340B is an essential cornerstone of the healthcare industry; covered entities can achieve an average savings of 25% to 50% in pharmaceutical purchases off of generally available market prices. 340B is vital to hospitals being able to provide care to underserved populations, and often, 340B hospitals are the only source of care for a community.
On average, it was found 340B participants are operating on a margin almost a third lower compared to the hospital industry as a whole, making 340B vital for these safety net hospitals.
However, 340B also comes with its own set of challenges. Manufacturers have as little as 30 days to dispute Medicare and commercial claims ;though, there is no programmatic requirement that savings realized in 340B have to be tracked down to the patients level. Though larger health systems are more likely to have staff dedicated to 340B auditing, it’s smaller, more rural hospitals that are the most vulnerable.
So what is the solution? Simplify continuous compliance as your program grows and regulations become increasingly complex. By streamlining your 340B compliance into one place, 340BCheck gives hospitals and grantees complete oversight and 100% auditing capabilities. Unite disparate data sources, monitor compliance, and validate every transaction to remain HRSA audit-ready – all to scale your program and minimize financial risks.