The 340B Drug Pricing Program helps healthcare organizations provide affordable outpatient medications to low-income patients. While it supports safety-net providers, adherence to federal regulations is important for maintaining the program’s effectiveness. At the core of compliance is the need for accurate tracking of 11-digit National Drug Codes (NDCs). This article discusses the significance of proper NDC tracking for those participating in the 340B program, particularly medical practice administrators, owners, and IT managers.
Established in 1992, the 340B Drug Pricing Program allows eligible healthcare organizations—known as covered entities (CEs)—to purchase outpatient drugs at reduced prices. This program supports entities that serve many vulnerable patients by providing discounts, helping to stretch limited federal resources. To participate, drug manufacturers must offer these discounts as a condition for utilizing Medicaid and Medicare.
Compliance with the 340B program requires following several federal regulations that dictate how eligible organizations manage and receive drug discounts. The key compliance factors are:
The NDC consists of eleven digits and is important for medication management. It has three segments: the labeler code, the product code, and the package code. Each segment identifies different details of the medication, from the manufacturer to the specific formulation. In the 340B program context, accurate NDC tracking is crucial to ensure that only eligible drugs receive discounts and are billed correctly.
Healthcare organizations may face issues maintaining accurate NDC tracking. Some common challenges include:
Integrating advanced technology is essential to improve NDC tracking and compliance with the 340B program. Implementing specialized software can streamline processes and increase accuracy.
Industry leaders, such as Lisa Scholz, PharmD, MBA, FACHE of Sentry Data Systems, emphasize the need for 340B software solutions that comply with NDC tracking rules and document pharmacy activities properly. She notes that running a 340B program effectively requires dedicated product solutions built to address its unique challenges.
Organizations can apply several best practices to ensure accurate NDC tracking and enhance compliance. These include:
Advancements in technology allow for significant improvements in NDC tracking and compliance for 340B program participants through automation and artificial intelligence (AI).
By using AI and automation, healthcare administrators can greatly improve their compliance processes, ensuring their organizations meet 340B regulations.
As healthcare organizations work to assist vulnerable populations through the 340B drug pricing program, compliance with federal regulations becomes increasingly important. Effective 11-digit NDC tracking forms the basis of this compliance. By adopting advanced technologies, implementing best practices, and ensuring comprehensive staff training, healthcare providers can reduce compliance risks and improve operational efficiency.
The intersection of healthcare and technology offers a route for organizations to succeed in compliance efforts and better serve the communities that depend on them. In a situation where much is at stake, maintaining strict adherence to compliance protocols is a regulatory obligation and a responsibility to enhance healthcare access for all. Organizations navigating this complex area must recognize that managing NDC tracking effectively can significantly enhance their standing in healthcare delivery.
The 340B Drug Pricing Program offers discounts on outpatient drugs to eligible healthcare organizations, known as covered entities (CEs), to alleviate financial burdens on safety-net providers serving a disproportionate number of indigent patients.
Key compliance factors include 11-digit National Drug Code (NDC) compliance and tracking, policies and procedures, and effective reporting.
11-digit NDC tracking is essential to ensure that the correct drug is replenished for eligible patients, avoiding issues with manufacturers and ensuring compliance with HRSA guidelines.
Challenges include ongoing drug shortages and the need to align multiple NDCs under the same charge code, complicating compliance tracking.
Best practices include checking wholesaler invoices, reviewing alias NDCs in systems, and ensuring accurate tracking in 340B software to avoid compliance issues.
P&Ps are federally mandated and should reflect the operational and compliance processes for CEs; they must be presented during audits alongside purchasing and dispensing data.
Operational challenges include ensuring that all personnel involved understand and consistently enforce P&Ps, particularly in small organizations where roles may overlap.
Reporting is essential as it consolidates data from various IT systems to track performance, demonstrate compliance, identify areas for improvement, and prepare for audits.
A CE should have reports on GPO, 340B and WAC purchases, inpatient and outpatient utilization, distinct NDC savings, potential savings, and ready-to-be-replenished items, among others.
Technology solutions can ensure accurate tracking of NDC compliance, automate adherence to P&Ps, and facilitate comprehensive reporting, ultimately enhancing compliance and financial performance.
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