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Mark Malahosky, VP of Trillium’s pharmacy services, sees success in 340B pharmacy revolving around real-time claims management to meet program requirements.

Trillium Health occupies a very particular point on the healthcare continuum, operating both as a 340B covered entity and a contract pharmacy. It is a Ryan White HIV/AIDS Program-grantee clinic located in Rochester, N.Y., where it has primarily served patients affected by HIV/AIDS. In 2005, Trillium opened up an on-site pharmacy. The primary reason was to offer expanded services for patients under one roof. An additional benefit was the opportunity to generate revenue from the federal 340B program, which Trillium could offer eligible patients as a covered entity. Then, Trillium was approached by a local federally qualified health center (FQHC) that was looking to provide pharmacy services through the 340B contract pharmacy model. This was a logical move for the FQHC. “We have the expertise in running pharmacies,” explains Mark Malahosky, Trillium’s VP of pharmacy services.

The move into 340B contract pharmacy created the perfect time for Trillium to reassess the technology platform running its pharmacy operations. “We realized that we needed something that was able to handle both our needs as a covered entity pharmacy and the new 340B management needs we were going to have as a contract pharmacy,” says Malahosky. Pharmacy management software often does not include all the tools pharmacies need to manage 340B contracts, leading to a need to work with an additional vendor. However, Trillium had recently installed robotics from Script- Pro and that led to a conversation with the company’s software engineers about just what the pharmacy management software could do for 340B. “The engineer I talked to basically said, ‘What do you want?’” says Malahosky. “And so I gave him my pie-in-the-sky scenario for 340B management functionality, and he said, ‘Oh yeah, we can do that.’”

Goals: Compliance and Utilization

At the highest level, 340B management can be distilled to two main objectives. First is maximizing utilization, which requires the pharmacy to correctly identify 340B eligible patients and assign their prescriptions to the right inventory center. This in turn drives operating revenue for the other areas of a health center. Second, and of equal importance, is compliance. A critical aspect here is the elimination of diversion and duplicate discounts. This goal is easy to state, but much more complicated to achieve, with different needs when you are running your own program as a covered entity and when you are operating as a contract pharmacy.

Trillium started out as a 340B covered entity, of course. Prior to implementing ScriptPro, the key steps of identifying 340B patients and therefore choosing the correct inventory center were solely based on human input, according to Malahosky. “We were relying on the people doing data entry, either pharmacists or pharmacy interns here, to get this right,” says Malahosky. “Once we moved to ScriptPro’s pharmacy management software, those steps became automated.”

Driving this automation is a 340B eligibility code in the electronic medical record, for which Trillium’s informatics team has built a query. “When our ScriptPro software sees that coding,” says Malahosky, “it will ensure that the 340B inventory center version of the drug is what’s chosen for that dispensing. The person doing data entry just selects the drug, and the system is making sure it’s from the correct inventory center.”

The system then buttresses this automation with an hourly look back to confirm that 340B inventory has been used for every eligible patient and only for those patients. “We could conceivably override the system and pick the wrong inventory center at data entry,” notes Malahosky, “but at the top of every hour our software is going to identify and correct claims that are out of compliance with 340B.” This is another important piece of process automation, which means that while Trillium still generates a daily compliance report, there’s no longer a need for Malahosky to go back and correct errors manually. “Our compliance reports basically tell us that nothing’s out of compliance,” he says.

The Contract Pharmacy

It gets more complicated when Trillium is dispensing as a contract pharmacy on behalf of the FQHC. “As a covered entity, we have two inventory centers, 340B and non- 340B,” Malahosky explains. “But as a contract pharmacy there really isn’t a 340B inventory center because we’re not technically purchasing 340B drugs. We are simply dispensing medications on behalf of the FQHC, and then getting replenished for the drugs used.” This is where another solution from ScriptPro, the Third Party Management System (TPMS), dovetails with the pharmacy management software’s ability to correctly identify 340B eligible patients based on criteria applicable to the FQHC. “For us as a covered entity, the patient is going to be eligible as someone served under our grant,” says Malahosky. “If we’re dispensing as the contract pharmacy for the FQHC, then we need to verify that it is an eligible patient and an eligible prescriber. We are able to program the system according to these specifications.” Once a prescription that Trillium is dispensing on contract is marked as 340B eligible, that information gets handed off to their TPMS. This is where Trillium tracks and reconciles these 340B eligible claims, ensuring that the claim reimbursement is being passed to the health center, and manages replenishment and the accounting for the enhanced dispensing fee from the health center. This is an area where many contract pharmacies end up looking to a separate vendor. In Trillium’s case, however, everything can be managed in-house by the partnership between ScriptPro’s pharmacy management system and TPMS.

Managing 340B in Real Time

A key element once again is that Trillium is able to manage its 340B contract obligations in real time, rather than retrospectively. “If we were looking at these prescriptions after the fact, I wouldn’t be comfortable that we’d avoid compliance issues or underutilization,” says Malahosky. This is particularly important when it comes to Medicaid managed care. “This is different in every state,” notes Malahosky, “but in our state and many others, the managed care claim has to be flagged as 340B eligible at the point of adjudication so that the PBM [pharmacy benefit manager] for the managed care plan can then share that flagging information with the state Medicaid office. This in turn ensures that the state Medicaid office knows that this is a claim that they cannot collect a rebate on because the 340B discount was already used.”

If you flag these prescriptions at the end of the day and not at the time of adjudication, then you can’t be certain that the PBM hasn’t already started the ball rolling for the state Medicaid agency to collect its rebate on the basis of it being a non-340B claim. “Managing your 340B contract obligations retrospectively really almost eliminates managed care as a potential payer for the 340B benefit for the covered entity,” says Malahosky. “That’s why recently released proposed guidance says that going forward you have to carve Medicaid managed care out of the 340B program unless the covered entity, the contract pharmacy, and the state Medicaid agency all have an agreed-upon process for managed care claims. It’s not going to work to go to the state Medicaid agency and say ‘We’ll let you know which claims are 340B after the fact.’ This is not going to be viewed as a workable solution to ensure that there are no duplicate discounts. For us, using ScriptPro is really the only way to handle these claims because it’s being done real-time and not after the fact.”

Malahosky is also able to leverage the real-time 340B capabilities Trillium has within its ScriptPro platforms to meet other needs for the FQHC facility it contracts with. For instance, notes Malahosky, the facility has a number of uninsured patients that it charges for prescriptions using sliding scale fees that are dictated by FQHC policy. This fee needs to be based on the cost of the drug, and the FQHC is therefore relying on Trillium having an accurate and up-to-date drug cost at the time of dispensing. “The FQHC is basically sharing that 340B discount with these uninsured patients,” explains Malahosky. “Because our prices are updated constantly throughout the day, we are able to ensure that the patient is receiving the right price.”

Confident the Job’s Done Right

There’s good reason why Trillium has such confidence in the process automation it has been able to bring to its 340B programs, both as a covered entity and a contract pharmacy. “We run a variety of compliance reports to double-check our process,” explains Malahosky. “For example, we’re looking to make sure that there’s no instance of an invalid patient or prescriber. We also need to run reports to make sure that the proper coding for Medicaid managed care was used. What we’re seeing is virtually 100% compliance. And this validates that we’re right in believing that the systems from ScriptPro really are managing all the complex elements that go into our two overarching goals of compliance and maximizing utilization.” CT

Will Lockwood is VP and a senior editor at ComputerTalk.