Strong 340B operations are a set of small, repeatable habits: running the reports that show where prescriptions actually go, reviewing what failed to capture, checking wholesaler invoices against the 340B price, and owning the program rather than delegating it to software. Programs that build these habits absorb pricing and regulatory pressure. Programs that skip them find out too late.
Most covered entities are exhausted. Every quarter brings another pricing impact, another piece of state legislation, another manufacturer restriction. The instinct is to brace for the next hit.
Kaitlyn Weckhorst Wood thinks that instinct is the problem. She is a 340B Pharmacy Account Executive at SunRx, and before that she ran a 340B program at an academic health center and worked as a pharmacy analyst at Oklahoma Medicaid. On the latest episode of 340B Pulse, she made a case that has less to do with policy and more to do with discipline.
“Instead of always feeling like you have to play defense, why can’t we play offense? Why can’t we strategize up front to reduce that harm on the back end?”
None of what follows requires a bigger team or a new platform. All of it is available to a covered entity today.
What Is the Most Underused Report in 340B Operations?
The eRx report from your EMR is the most underused report in 340B, and it shows where patients actually fill prescriptions after they leave your building. Kaitlyn asks covered entities whether they can run one, and roughly half cannot answer. Without it, a contract pharmacy network is built on assumption rather than evidence.
She calls it her “number one lethal weapon,” and the reason is what it exposes.
Covered entities build contract pharmacy networks, then complain that savings and volume are not materialising. When Kaitlyn asks where their prescriptions are actually going, the room goes quiet.
“You know, we see it all the time with rural providers and rural covered entities, where they’re actually filling somewhere significant, a significant portion away, but they wouldn’t know that because they’re not running that eRx report. They’re just making guesstimations.”
The assumption is that patients use the pharmacy nearest the clinic. Frequently they do not. If your patients are driving thirty miles to fill prescriptions and your contracted pharmacy sits next door, your network does not match your patient behaviour, and the leakage is invisible until someone runs the report.
Why Does the Fallout Report Matter More Than the Capture Report?
The fallout report lists prescriptions that should have captured for 340B but did not, which makes it more actionable than the capture report. Capture reports confirm what already worked. Fallout reports point at recoverable savings and the specific configuration errors causing the loss.
“Your fallout report of what is not capturing is just as important, or more important, than what is capturing.”
When Kaitlyn reviews a fallout report with a covered entity, the causes are rarely mysterious:
- A value is not ingesting from the EMR into the third-party system
- The provider panel needs updating
- A configuration change was never made
- Configurations no longer match the stated patient definition eligibility timeframe
Each of these is fixable in an afternoon. None of them announce themselves. They only appear if somebody opens the report and asks what happened.
Her rapid-fire answer, when asked to name the one report every 340B team should review regularly, was immediate: the fallout report.
Should You Still Check Wholesaler Invoices If Ordering Is Automated?
Yes. Automated ordering through a TPA does not verify that the price paid was correct. Pricing file errors occur, and because replenishment runs without human review, overpayments can continue for months before anyone notices the effect on program savings.
Most covered entities treat ordering as a solved problem. The TPA orders automatically once accumulations are met, and the process disappears from view.
“A lot of covered entities set it and forget it, and let it happen as a function of the TPA. Well, pricing mistakes happen, or pricing file mistakes can happen. That is just the nature of having a program.”
Kaitlyn has this conversation with covered entities roughly weekly. The check is simple: confirm what you paid for a product matches the correct 340B price. Every dollar of overpayment is a dollar of program savings that quietly disappeared.
Who Actually Owns a 340B Program?
The covered entity owns the 340B program. Third-party administrators, split-billing platforms, and contract pharmacy systems process data and provide reporting, but they do not carry regulatory responsibility, do not receive the program benefit, and cannot substitute for internal oversight.
This is worth pausing on, because it came from someone who works for a TPA.
“That is not your TPA’s 340B program. We are not receiving your program benefits at the end of the day. Your covered entity is receiving those program benefits, and your patients rely on that. We’re a small piece of that puzzle.”
Her framing is that 340B is what you make it. A covered entity can run limited oversight, or it can check everything and ask questions, and the outcomes differ accordingly.
The failure mode she described is quiet and expensive:
“What if you changed your EMR, but you didn’t make that notification, you didn’t have that conversation, and six months later you don’t have any program savings, you don’t have any program benefits? And that could have all been avoided.”
Nothing broke loudly. A system changed, nobody told the vendor, and half a year of benefit evaporated.
What Should You Ask a TPA Before Signing?
Ask what the partnership looks like after the contract is signed. Feature comparisons dominate TPA evaluations, but the operational difference between vendors shows up in whether you get monthly reviews, performance monitoring, and a named account contact, or a ticketing queue.
Kaitlyn’s practical evaluation sequence starts with what you already have:
- Identify the functionality you rely on today and confirm any new vendor can match it
- Name your programme’s unique requirements, such as a cash or uninsured programme, and ask directly whether the system handles them
- Examine the reporting suite, and ask whether custom reports are available and what the turnaround time is
- Then ask the question most evaluations skip
“It’s not just about functionality for a TPA. A TPA is the base of your whole program. What kind of partnership is that TPA going to provide you? Will you meet with them every month? Will they provide performance reviews? Are they monitoring your program? Do you have a dedicated account executive that’s going to answer your emails or your phone calls, or do you go to a ticketing queue?”
Her rapid-fire answer to the single question every covered entity should ask a vendor was exactly this: what does our partnership look like once the contract is signed?
How Should Covered Entities Handle Documentation?
Treat documentation as a continuous habit rather than an audit response. Maintain policies and procedures, wholesaler invoices, self-audit reports, financial records, and every executed contract pharmacy amendment, and know where records live inside the organisation even when another department holds them.
The documentation that causes trouble is rarely the documentation people expect. Kaitlyn noted that covered entities have struggled specifically with financial documentation.
Two habits reduce the pain. First, know where records live even if you do not hold them yourself, so an audit does not trigger a scramble across departments. Second, ask your TPA directly:
“If I do have an HRSA audit, what records are you maintaining for me? Where can I find this information? How are you going to support me with this audit, and what documentation are you going to provide me?”
Ask before the audit, not during it.
She was candid that this work is unglamorous. “Even though it might feel like a mundane task.” That is precisely why it gets skipped, and precisely why it matters.
What About Small Covered Entities Without a Dedicated Team?
Small covered entities should be explicit with vendors about capacity and consider add-on services that handle day-to-day operations. When one person is simultaneously the CFO, the clinical pharmacist, and the 340B lead, the constraint is attention rather than knowledge.
“A lot of times they’re the CFO, and then they’re the clinical pharmacist, and they’re also this, and they’re also that. And so 340B doesn’t have 100% of their time.”
Her advice is practical rather than aspirational: engage additional products or an additional vendor for program operations where it makes sense, and tell your partners plainly how much availability you have and how many hats you are wearing. Vendors cannot accommodate a constraint they do not know about.
Where AI Fits, and Where It Does Not
Kaitlyn is not worried about AI replacing 340B staff, and she is not sceptical about its usefulness either.
“AI can help you drive decision making, and can help you get to an outcome quicker. It can look for trends in your data and say, hey, look, red flag warning right here, now you need to go fix it.”
She also sees an application in tracking rebates and helping resolve rebate disputes. Her qualifier is consistent with everything else she argues: it does not remove the human. “There still will be manual intervention and manual conversations that have to happen.”
Her View on the Rebate Model
This episode was recorded on 16 July 2026, before the D.C. Circuit ruling in Novartis v. Kennedy and before HRSA published its reproposed rebate model notice on 3 August 2026. Kaitlyn’s comments reflect the picture at the time of recording.
Her assessment was measured. She acknowledged the rebate model addresses a genuine problem, and was direct about the cost:
“I do think it is going to be an additional administrative burden. It’s one more thing that covered entities have to do, and then they have to track that. How do I ensure that I received that rebate that I submitted for, or am I going to be out this higher cost forever?”
Her conclusion was that the administrative burden may outweigh the benefit as currently designed. That view is now testable against a published notice with real dates.
Frequently Asked Questions
What is an eRx report and why does it matter for 340B operations? An eRx report is pulled from the EMR and shows where prescriptions are sent after a patient leaves the covered entity. It matters because it reveals whether the contract pharmacy network matches actual patient behaviour, and roughly half of covered entities cannot say how to run one.
What is a 340B fallout report? A fallout report, sometimes called a non-captured report, lists prescriptions that should have captured for 340B but did not. It is where recoverable savings and configuration errors surface, which is why it is more actionable than a capture report.
How often should a covered entity review 340B reports? Monthly for core reports, with self-audits monthly or quarterly depending on programme size. The specific cadence matters less than choosing one and holding to it.
What is the biggest warning sign a 340B program is losing control? Decreasing program savings. If the benefit coming in is falling, something upstream has broken, and it is worth investigating before the cause compounds.
What should a covered entity ask before selecting a TPA? Ask what the partnership looks like once the contract is signed, including whether monthly reviews and a dedicated account executive are included, and whether custom reports are available and how quickly.
Does a TPA take responsibility for 340B compliance? No. The covered entity retains ownership and regulatory responsibility. Third-party administrators process data and provide reporting, but they do not receive the program benefit and cannot replace internal oversight.
The Habit Underneath All the Others
Asked for one practical takeaway, Kaitlyn did not name a report or a tool. She named communication, internal and external, extending past the C-suite to every person who touches 340B, down to the providers.
“You never know what you might find out, just by asking questions.”
That is the through-line. The eRx report is a question about where patients go. The fallout report is a question about what failed. The invoice check is a question about what you paid. The TPA conversation is a question about what happens after signature. None of them require new technology. All of them require someone deciding to ask.
At NorthArc Health, we build the technology and Agentic AI infrastructure that makes 340B operations defensible: claims validation, schema mapping, and pre-submission checks that surface problems before they reach a manufacturer platform or an auditor. If the habits in this article are ones your team wants to run consistently rather than occasionally, that is the layer we build.