Episode Summary
In this episode of 340B Pulse, NorthArc dives deep into the operational friction points that strain relationships between covered entities and contract pharmacies. Lyssa Limbrecht-Mosh brings her 11 years of hands-on 340B experience to unpack the realities of inventory swell, misaligned expectations, and the disconnect between hospital reimbursement models and pharmacy compensation.
Key Themes & Insights:
The Disconnect: Covered entities often misunderstand that contract pharmacies have zero control over the reimbursement rates they receive. This fundamental lack of control creates major friction, especially when hospitals project AR based on fixed pricing models.
Inventory Swell & Auto-Ordering: Many covered entities set up auto-ordering systems where the pharmacy has no visibility or control over what is being replenished. This leads to severe inventory swell, where pharmacies pay twice for different products and deal with expiring specialty medications.
Financial Leakage & Audits: Lyssa shares a powerful real-world example of uncovering $1.3 million (negotiated down from an estimated $3.4 million) owed back to a covered entity over a 21-month period due to improper retail-cost charging by a pharmacy.
Dispensing Fee Realities: Pharmacies need fair dispensing fees that protect their margins, especially given the extra operational burden of managing two separate inventories.
Future Threats: The impending Maximum Fair Price (MFP) regulations and the potential shift to a rebate model threaten to create even deeper operational challenges for both covered entities and pharmacies.
Show Notes
- Lyssa Limbrecht Mosh from Optimal340B shares eleven years of expertise on program optimization and compliance.
- Discover the fundamental disconnect between hospital pricing models and pharmacy reimbursement realities.
- The true definition of a healthy contract pharmacy partnership relies on transparent communication and proactive data sharing.
- Why most operators falsely assume auto ordering systems are a benefit rather than a catalyst for severe inventory swell.
- The critical difference between retail cost and acquisition cost that led to a massive million dollar recovery for one health center.
- How unmanaged TPA connections and missing encounter data create massive blind spots in 340B capture rates.
- Why regular internal and external audits are non negotiable for program defensibility and financial health.
- The hidden danger of dispensing fee conflicts and how to protect pharmacy margins without sacrificing covered entity revenue.
- Why reactive decision making is the most expensive mistake a 340B leader can make today.
- The impending threat of Maximum Fair Price regulations and what the shift to a rebate model means for your operations.
- Engage directly with your TPA to demand full visibility into uncaptured claims and missing data points.
- Establish mandatory quarterly meetings with your contract pharmacies to address workflow friction before it escalates.
- Conduct rigorous internal audits on claims that were not captured to uncover hidden financial opportunities.
- Negotiate dispensing fees that fairly compensate pharmacies for the dual inventory management burden.
- Monitor manufacturer restrictions closely to protect your program from compliance vulnerabilities.