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340B Pricing: How Your Disproportionate Patient Percentage Affects Pharmacy Costs

We have spoken a bit about Disproportionate Share Payments in a prior post. We established in that post that your disproportionate patient percentage may increase your Disproportionate Share payments. What we didn’t mention is that the DPP can also benefit you on pharmacy costing.

There are many great articles about 340B pricing, so I will only mention a few key requirements of 340B pricing. Because the law is riddled with complexities, we suggest obtaining additional assistance from a qualified professional.

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    • You must be a covered entity, for example: A FQHC, a comprehensive hemophilia diagnostic treatment center, or a Section D hospital operated by a unit of the State or local government.
    • You must prescribe the drugs on an outpatient basis (i.e. through your pharmacY0 for patients of the facility. This generally means that the facility must be somewhat responsible for the medical care of the patient.

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Source: http://www.hrsa.gov/opa/programrequirements/phsactsection340b.pdf

We also find in the statute a requirements that the hospital

for the most recent cost reporting period that ended before the calendar quarter involved, had a disproportionate share adjustment percentage (as determined under section 1886(d )(5)(F) of the Social Security Act) greater than 11.75 percent or was described in section 1886(d)(5)(F)(i)(II) of such Act.

So, if your DPP exceeds 11.75%, or the so-called Pickle Amendment, which applies if at least 30% of your inpatient revenue is attributed to State and local subsidies.

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