Across the country, hospitals and health systems are struggling to deal with the immense cost and corresponding loss of revenue caused by the COVID-19 pandemic. Many healthcare providers are expending additional resources to effectively treat COVID-19 patients while limiting elective procedures that typically reap significant profit margins. As such, providers are looking for innovative strategies to unearth additional revenue and/or cost savings to improve the bottom line.

One common avenue for realizing additional savings is through the 340B Drug Pricing Program. At this stage, most entities have maximized the potential of traditional avenues to 340B benefits and are searching for creative, non-traditional ways to expand 340B savings.

In Advis’s experience, one of the most effective non-traditional methods for realizing significantly greater 340B savings is through a 340B Medication Management Clinic (MMC). If an MMC is established as a 340B-eligible hospital-based department, the MMC provides an opportunity to capture high value prescriptions that would not otherwise be eligible for the 340B Program. If set up appropriately, many entities significantly improve patient health outcomes while simultaneously realizing hundreds of thousands to millions of dollars in additional annual 340B savings.

What Is an MMC?

Generally speaking, MMCs are physical locations where healthcare professionals (e.g. physicians, pharmacists, mid-level providers, etc.) consult with patients with the goal of reviewing and optimizing the patient’s medication regimens. During the MMC visit, the pharmacist or provider can provide education on the disease state and specific medications used to treat it, ensure adherence to currently prescribed medications, and make modifications to the treatment schedule based on information learned during the MMC visit. The MMC is almost always established as a hospital outpatient department for 340B eligibility purposes and can be conducted in-person or via telemedicine. Disease states that are typically targeted include, but are not limited to:

  • Diabetes;
  • Chronic obstructive pulmonary disease (COPD);
  • Infectious diseases (e.g., HIV, hepatitis, etc.);
  • Cancers treated through oral oncolytics; and
  • Osteoarthritis/Rheumatoid arthritis/Osteoporosis.

MMC Benefits

The benefits of establishing an MMC are two pronged: MMCs can significantly improve patient outcomes, while also serving as a substantial additional source of 340B savings.

Improved Patient Outcomes

MMC clinics can lead to measurably higher levels of care for at-risk patients. They serve as an important tool to improve patient outcomes for costly disease states. MMCs create a “high touch” environment where issues with the current treatment plan can be more easily identified and more quickly modified. An MMC visit also creates an opportunity to confirm or improve patient adherence to the medication schedule and treatment plan. Moreover, the MMC visit can serve as a venue for the entity’s staff to provide additional education on the disease state and medications associated with treatment. This can be especially useful for drugs that are difficult to administer (e.g., injectables). Finally, improved patient outcomes realized through MMC visits can reduce readmission rates and otherwise lead to additional cost savings for the entity.

340B Savings Opportunity

From a financial perspective, MMCs create an opportunity to realize substantial 340B savings that wouldn’t be possible without an established MMC. Assuming the MMC is established as a provider-based department of a 340B-eligible entity, patients treated at those locations can be considered 340B-eligible patients, assuming all other 340B requirements are met. MMCs typically target prescriptions that are initially written from non-340B eligible, freestanding physician clinics. These prescriptions are usually ineligible for the 340B Program and lead to no financial benefit for the entity. However, if those same prescriptions are funneled through an MMC and are co-signed or rewritten during the MMC visit, those prescriptions can qualify as 340B-eligble.

Based on the high differential between 340B and non-340B pricing for most of the medications used to treat complex disease states, substantial 340B savings may be realized even with a relatively low volume of 340B-eligible prescription fills. Additionally, for entities that are self-insured, MMCs can also be used to significantly reduce expenditures for employee medications.

Next Steps

While the potential benefits of establishing a 340B-eligible MMC are significant, many important factors come into play when setting up the clinic. Establishing appropriate staffing models, optimal workflows, and compliant billing protocol are all crucial to ensure the MMC runs as compliantly and optimally as possible. Advis has extensive experience in helping our clients design MMC models tailored to the hospital or health system to provide maximum benefit. If you’d like to explore MMC opportunities for your organization, please reach out to one of our experts.

Published: September 18, 2020