Contract Pharmacy Compliance

The 340B program experienced substantial changes since HRSA early Contract Pharmacy Guidance. It was this guidance that has paved the way for expansion of retail contract pharmacy networks to be part of the 340B Program.

This significant expansion for Covered Entities provides a vast opportunity to increase participation in the program when establishing  contract with one or more pharmacies. Understandably, many Covered Entities experience compliance fears when anticipating contracting with a chain or independent pharmacy, it can bring with it increased program complexity, cost, and regulatory risk.

340B Contract Pharmacy Definition

Per 340B Program regulations, for an eligible entity to have the ability to purchase a drug at 340B discount, it must dispense that drug to an eligible patient. A large number of eligible patients fill their prescriptions at independent and chain pharmacies that may be unaffiliated with the eligible entity. 

Contract Pharmacies Guidance allows a CE to contract with an outside pharmacy to distribute the prescriptions on the CE’s behalf. This allows the eligible entity to increase drug availability to patients by increasing the locations patients are able to obtain their prescriptions, while also increasing the percentage of eligible claim capture, thus increasing the CE’s 340B savings.

Areas to Focus

Contract Pharmacy Strategy 

Analyze the Data – Conduct claim level analysis.

Escribe analysis – It is important to determine where prescriptions are going.

Meet Needs to Patient

 – Ensure the pharmacy is in good proximity to your patients.

 – Understand their uninsured program design.

Execute a Pharmacy Services Agreement (PSA)

 – Ensure that all OPA sites are listed on the PSA.

-Conduct a Fair Market Analysis and include Dispensing Fees.

Ensure that the Pharmacy is correctly registered on OPAIS and all data is accurate.

 – Pharmacies can only register 4 ties a year and must recertify annually. 

Eligibility Determination

Review Provider file and determine exclusive/non-exclusive providers

 – The prescription has to be based on documented care that originated from registered facilities by physicians employed or contracted with the CE.

 – Eligible Claim Determination – This can be conducted during build with your TPA.

 – All sites must be registered on the OPAIS database.

 – Uninsured Patient – Ensure that a program is set-up and in place for Uninsured Patients.

Fee-For-Service (FFS) Medicaid Capture

State Specific – Ensure you are aware and follow your state requirements


 – Many states are allowing Contract Pharmacies to Carve-in, but work with your Medicaid office and HRSA for approval.

– If Carving-Out, ensure BINS are being properly monitored and set-up appropriately.

Managed Medicaid Capture

The 340B statute does not currently define the regulations surrounding Managed Medicaid claim capture.

ACA allows eligible entities to capture claims as long as there is no intention to collect rebates.

Prevent Duplicate Discounts – Work closely with payors or conduct claim level identification to avoid.

Although it seems like maintaining Contract Pharmacy Compliance may be overwhelming, it really is not. When implementing and maintaining key compliance factors, your Covered Entity could drastically increase savings while providing your community with added location options for patients to fill their prescriptions. It’s a win/win!

Ensuring these factors are all set and are in motion is where having the support and strength of a highly experienced TPA with an equally qualified expert staff can be invaluable. If you have questions or need solutions, please contact us.


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