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340B MODELS

Range of Options

Model

How it Works

Benefits

Considerations

Health Center (HC) Contracting with Local Pharmacy

HC contracts with a local pharmacy

HC and pharmacy negotiate a dispensing fee

Use a Replenishing Model rather than maintain large inventory of medications

HC sends patient to contracted pharmacy

Pharmacist fills prescription and enters it as a 340B script in the system

Pharmacist calls wholesaler to replenish medications that were dispensed

Pharmacist charges the 340B price (~AWP- 40%) plus pre-negotiated dispensing fee (and administrative fee depending on arrangement)

Pharmacy keeps the dispensing fee and passes the 340B payment to HC

HC is “kept whole” – takes 340B payment and pays wholesaler

Everybody benefits:

Pharmacy gets paid pre-negotiated dispensing fee

No risk/liability to HC

Patient gets discount

HC can generate revenue on commercial insurance prescriptions:

HC can refer patient with commercial insurance to contracted pharmacy:

Pharmacy completes and submits claim for commercial insurance payment (usual customary price plus dispensing fee)

Commercial insurance pays pharmacy

Pharmacy only keeps pre-negotiated dispensing fee

Revenue goes back into HC; subsidizes care given to uninsured

Most effective if HC’s % of commercially insured patients is high (need to look at payor mix)

Sending patients to contracted pharmacy

HC cannot force patients to go to contracted pharmacy

Find “creative” ways to encourage them to use pharmacy

Requires thoughtful negotiation with pharmacist to ensure costs are covered

In-House Pharmacy

HC refers patient to in-house

HC keeps entire dispensing fee

More complex than contracting with

Based on internet research, materials from the Eighth Annual 340B Conference Coalition, and a conversation with Anita Lee, R.P.h., MPH, who currently develops and manages 340B Programs in New York State.

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