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Telehealth and 340B in the COVID-19 Era and Beyond

Monday, May 18, 2020   (0 Comments)
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Written by: Ted Slafsky, Wexford Solutions and Todd Hudnall, RxStrategies


As health centers approach their second quarter of treating patients in the COVID-19 era, one thing is for certain-- telehealth is here to stay. While some of the accommodations that the government has provided may tighten in the post-COVID world, virtual medical visits are fast becoming a routine and expected mode of health care delivery. With the rapid transformation to telehealth comes an increase in the number of prescriptions prescribed through a virtual visit rather than through a traditional clinic encounter. As a result, CHCs need to be aware of and abide by both federal and state laws applicable to prescribing and dispensing pharmaceuticals including the rules related to the 340B drug pricing program.


While telehealth is not always practical in treating health center patients, its many benefits-- including improved satisfaction, cost-efficiency, care coordination, and access-- mean that it will now be an integral part of the health care toolbox. Ever since the CARES Act extended the definition of “distant site provider” to include federally qualified health centers (FQHCs) and rural health clinics (RHCs), questions have been raised about the permissibility of using 340B-discounted drugs.


Three-Prong Patient Definition Rule


According to Powers Law’s Barbara Williams, a script that is written as result of a telehealth visit may be filled with 340B drugs, provided that the three prongs of the Health Resources and Services Administration’s (HRSA) patient definition test are met:

  • the prescriber must be employed by or under contract with the covered entity, or have received a referral from the covered entity; 
  • the covered entity must have medical records of the telehealth visit; and
  • the service provided via telehealth must be within the scope of the covered entity’s grant.


HRSA’s Office of Pharmacy Affairs has also it made it clear on its COVID-19 Resources page that telehealth is an acceptable modality for providing care. The agency states, “ HRSA understands that the use of technology in health care delivery during this time is critical, and that telemedicine is merely a mode by which the health care service is delivered.” HRSA’s prime vendor Apexus has advised that a telehealth visit should be recorded in the center’s Electronic Medical Records (EMR) in the same way that in-person visits at 340B eligible locations are recorded. “HRSA recommends that covered entities outline the use of these modalities in their policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug”, the resources page says.


In addition to tracking all of the federal rules regarding the provision of pharmaceuticals, it’s very important to stay on top of the numerous state laws and regulations. “Most telemedicine restrictions are going to come from state law,” says Jason Reddish of Feldesman Tucker. “There are many rules regarding licensure, patient privacy and Medicaid billing that make this a challenge,” adds Feldesman Tucker’s Carrie Bill Riley. While many states have waived or relaxed these requirements, it is important to check on your state as well as the state where a patient is located.


Ensuring Compliance and Operationalizing 340B in Telehealth


Each year, HRSA conducts hundreds of new audits of 340B providers. Grantees are at risk of having to refund drug manufacturers and, in rare instances, lose 340B eligibility in the case of non-compliance. Over the past decade, HRSA has completed close to 1300 audits, which have included the review of nearly 1800 offsite outpatient facilities and 27,000 contract pharmacies. Introducing telehealth into the equation adds a layer of complexity.


Working with your 340B Third Party Administrator (TPA) is vital to accurately capturing all telehealth visits in accordance with government rules. It is important when evaluating a 340B TPA that you select a vendor which has software that provide transparency and tracking around a telehealth patient visit to easily bring those prescriptions back into their 340B programs. Some TPAs can identify telehealth provider visits, which are outside the FQHC’s full or part-time provider network, for immediate attention. For example, with software functionality provided by aa seasoned TPA - FQHCs can easily view all prescription claim detail, including estimated drug savings sorted by highest dollar impact, in one consolidated view. With a click in the software, FQHCs are then able attach provider notes from the telehealth EMR back to the FQHCs originating EMR and add those claims back into their 340B program within the TPA’s portal. To remain compliant, FQHCs need to track the telehealth visit back to the originating FQHC as well as ensure that the patient definition is met and patient EMR records are maintained.


As a second part of this validation procedure, it is equally important that the FQHC has a thorough vetting process for all outpatient claims which fully meet HRSA requirements. Citing the above example, RxStrategies ensures five-points of eligibility are matched on every drug claim including the patient demographic information, provider NPI and/or DEA, location of the patient encounter and date of service. This claim verification process occurs retrospectively, after the telehealth visit has occurred. It is not enough to just ensure the telehealth provider qualifies as a patient visit. And of course, all of this verification process must be stored within your TPA’s portal for easy retrieval in the event your FQHC is audited by HRSA. Looking for a 340B TPA which can back up this claim process, in writing with financial guarantees, can provide your program and leadership team the reassurance it needs.


For questions on 340B policy and developments, contact Ted Slafsky at ted.slafsky@wexfordsolutions.com or 703-517-1325.


For questions on 340B operations and implementation, contact Todd Hudnall at thudnall@rxstrategies.com or 614-648-0706







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