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340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.
Narration (00:04)
Welcome to 340B Insight from 340B Health.
David Glendinning (00:12)
Hello from Washington, D.C., and welcome back to 340B Insight, the premier podcast about the 340B drug pricing program. I'm your host, David Glendinning with 340B Health. Our guest for this episode is Ted Houston, manager of pharmacy financials and the 340B program at St. Francis Health System in Oklahoma. We caught up with Ted at the 340B Coalition Summer Conference.
David Glendinning (00:37)
Where he gave a presentation on how hospitals can make better use of their 340B data. Ted joins us to discuss how hospitals can turn all that data into actionable information. But first, let's do a quick recap of some of the latest news about 340B.
David Glendinning (01:01)
Illinois Governor J. B. Pritzker recently signed legislation protecting 340B contract pharmacy arrangements in the state. The new law prohibits drug companies from restricting or interfering with the delivery of 340B drugs to covered entities and their contract pharmacies in Illinois. It also prohibits drug makers from requiring covered entities to submit claims or pricing data from their in-house or contract pharmacies beyond what state or federal law requires.
David Glendinning (01:31)
The law is a significant victory for Illinois 340B hospitals and other supporters who spent about two years advocating for the protections. It already is facing federal court challenges from several drug makers seeking to block it, and 340B Health will continue monitoring those cases. We recently spoke with Thomas Yu of Sinai Chicago about the successful advocacy effort that helped get the Illinois legislation across the finish line. If you've not already listened to that episode,
David Glendinning (02:01)
Be sure to check it out to hear more about what hospitals in other states can learn from the Illinois experience.
David Glendinning (02:15)
And now for our feature interview with Ted Houston of St. Francis Health System. Hospitals have access to more 340B data than ever, but making sure they are focusing on the right information can be a challenge. Ted joins us to discuss practical ways hospitals can use their data to strengthen their programs. Here's that conversation. Today I'm with Ted Houston, who is manager of pharmacy financials and the 340B program at St. Francis.
David Glendinning (02:45)
Health system. Ted, you are joining us here at the 340B Coalition Summer Conference in advance of giving your presentation on 340B data and we're very grateful for you joining us here. Thank you for being here and welcome to 340B Insight.
Ted Houston (03:00)
Thanks for the opportunity.
David Glendinning (03:02)
We're
David Glendinning (03:02)
gonna be talking a whole bunch about data. This is something that you came to the conference, you know, not just to attend, but specifically to present on. To start, let's do what we always do. Please tell us a little bit about St. Francis Health System and the patients you serve, maybe a little bit about how 340B helps support that mission.
Ted Houston (03:22)
St. Francis is a Catholic nonprofit health system. It's based out of Tulsa, Oklahoma. It's the largest private employer in Northeast Oklahoma and its anchor hospital is located in Tulsa. we provide a variety of services. A couple of notable ones that we've achieved recently. The first would be that we've recently obtained a three-year level one trauma verification. So that's definitely a big plus.
Ted Houston (03:42)
When you think about the geography of Oklahoma, really it's Tulsa and Oklahoma City are the two big medical hubs. So by having that located in northeast Oklahoma as an additional level one service, that means that patients can get closer access to care, especially for those critical emergencies that need that level. we also have the only pediatric hospital in the region, and it's the only pediatric hospital in the region that has several specialties that are otherwise difficult to find or obtain.
Ted Houston (04:06)
Generally, when I think about 340B savings and their uses, it generally falls into two buckets. Those are gonna be providing services and also direct assistance to patients. I think a lot of time when you look at the media and places like LinkedIn, you can see that most of the story is focusing on okay, did the discount actually go to the patient? And it's important to keep in mind that that's not always what happens and the discounts are sometimes used to fund services that wouldn't otherwise exist. They may not be profitable or they may require a very large catchment area to maintain that service in the community.
Ted Houston (04:36)
The other thing that I think is really fantastic about St. Francis is that when you look at our community benefit report, when you look at the amount of charity and uncompensated care, that actually is larger than the value of the 340B savings we realize across the system. So I think that's fantastic. And that's before you even get into things like meds to beds where we send patients home with thirty days of a supply to tell them over until they can see a primary care provider for follow up.
David Glendinning (04:58)
Thank you for r running through that mission and for adding that very important perspective. I I understand you've had kind of a unique pathway into the 340B world. So how how did your experience shape the way you think about using data in this program?
Ted Houston (05:15)
My first true exposure to 340B was working as a staff pharmacist at a tribal nation in northern Wisconsin. And when I was working there, we had access to IHS pricing, which is usually very good. and there was always a push from our benefit consultants because we had a self funded plan to explore 340B and see what additional opportunities might be there as well.
Ted Houston (05:34)
So the organization had started using contract pharmacy arrangements. We had one arrangement with a single pharmacy that was pulling in about 80 to 85 prescriptions a year, very small scale, absolutely nothing happening in-house. And to be honest with you, I think part of the issue that we encountered was that the operational complexity around 340B and some of what I will call the 340B mythology, it wasn't super clear what was truly compliant if you were a new entrant into 340B.
Ted Houston (06:00)
So we did a lot of extensive research. We went through 340B University through the ACE curriculum with Apexis as well. And we realized that there were a number of opportunities available to enhance savings beyond what IHS could provide to our patients. And we developed our own in-house modeling. We tried to just scope out what is the actual opportunity, is it worth pursuing? we realized that there was a meaningful opportunity to help serve our patients.
Ted Houston (06:24)
The other thing we realized too is that when we were working with a third-party administrator to help service the contract pharmacy arrangement, that you had to get data out to the provider somehow. So that's usually the claim being picked up on a switch through adjudication. Within our particular tribal clinic, we had about 30 to 35% of the patient population was functionally cash pain. And that just meant that they were uninsured. So they would still receive medications free of charge, but unless we attached a discount card onto the prescription claims, it would not actually make it out to the switch and it wasn't visible when you're doing our analysis.
Ted Houston (06:53)
The other thing that we found interesting was that by using the pharmacy management software directly, we could build our own reporting up and there were some custom things that we weren't seeing with a particular TPA. And we said we'd like to investigate this further and we realized that having a better control over our data leads to greater compliance. and having that visibility really helped reduce the anxiety of going forward with the implementation of an in house pharmacy program.
David Glendinning (07:17)
Okay, so certainly a lot of data to wrangle and that became very clear to you once you got into that into that 340B world. So what are some of the biggest challenges you see 340B hospitals facing today in terms of getting the most value out of all of that data?
Ted Houston (07:33)
So there are couple things I see. One is I think it's important to audit your electronic health record extract. You may be sending out reports that don't capture the totality of your 34 DB program, or if you haven't recently reviewed the MCR or your Medicare cost report line by line for the eligible clinics, you may be missing opportunities to qualify claims. The second piece is after that data has arrived at your third party administrator, making sure that you have your TPA settings properly configured.
Ted Houston (07:58)
I've seen instances where I suspect there's issues with identity resolution. So a patient may look different in a chart via their name or some other configuration that leads to a claim not being qualified. in that case, you have to work fallout reports. Some of them are native to the TPA, some are ones you build out yourself, but those can be substantial savings that are missed just because of a communication or a logic issue. In terms of other things where I think there's the largest value is looking at your claims that aren't qualifying for 340B and finding out why and seeing if you can make any of those automated adjustments.
Ted Houston (08:28)
The less manual work that you can do on a repetitive basis will help to make sure that you can capture savings repeatedly and compliantly instead of requiring someone to review each individual claim.
David Glendinning (08:38)
And one of the h themes we're hearing from 340B hospitals lately in terms of w what they need to be doing with their data is reporting expectations, in terms of reporting to the government, reporting potentially to drug makers. how is that affecting the way hospitals need to manage all of this 340B data?
Ted Houston (08:56)
When the 340B rebate program first was announced, we spent a lot of time working with our enterprise and data analytics team trying to modify our exports of the data from the electronic health record to conform to what was being requested by manufacturers. So in every organization, the amount of support you're gonna get is different. And 340B is really something that's mission critical. So if you find yourself in a position where you're opening a ticket and it's not getting serviced for one or two months,
Ted Houston (09:20)
You know, those are situations where you have to pull in other stakeholders who appreciate the value of the 340B program and can champion why this is important. The other thing that we're seeing is just the artificial compression of the data cycle and reporting. So in the past, you had a little bit of a wider window where you could go back and work things like those fallout reports and submit that data. The reporting for in-house pharmacies and mixed-use settings didn't exist. So these are all new extracts that we're having to pull.
Ted Houston (09:46)
It's usually multiple reports that were submitting manually unless you're having your TPA perform some of those automatically for you, which is a tremendous benefit. And so when we think about things like the MFP and the rebates, that's an additional process where we have to go back and claim additional savings. it's a little challenging because you have to pull in invoice data and associate that, usually using something like a first in, first up methodology against claims to say which particular claims were serviced by a particular 340B invoice.
Ted Houston (10:12)
So these are just extra burdens that we have falling onto our plate to make sure that we're made whole. I've come across numerous instances where the 340B rebates were being withheld, be just because we were categorically 340B or it was inferred that the provider was a 340B and that didn't actually match what we saw within our third party administrator systems. So by working those reports, we actually brought back additional savings that we were really entitled to within the program.
David Glendinning (10:34)
Interesting to hear you speak about what you call the artificial compression of the data cycle. That's a very, very evocative term. as these reporting windows do continue to shrink over time because of all of these various pressures, what can 340B hospitals be doing to respond? How can they adapt without creating new compliance risk for themselves?
Ted Houston (10:58)
When it comes to reducing compliance risk, it's important to work with your third-party administrator. in many cases, they are building out reporting that can be submitted directly to ESP or Beacon or other platforms in the future as we see the program continue to evolve. I think it's important to validate your extracts as well. If you really go down the road of manual reporting, that's where you start to encounter risk. So if you are doing inappropriate filter selections on the reports that you're trying to pick up and export, you may have claims that get missed and don't get added to your submission totals.
Ted Houston (11:26)
Right now, the only clarity that we have is we have organizations that are not currently submitting data at a categorical level. We really don't know how it's going to be handled for organizations where there might be just a handful of claims missing. Say it's one or two percent. Does that mean that we lose access to the manufacturer's entire portfolio or their catalog? Or is it going to be just restricted to a one-off basis that you resolve the manufacturer? That's really up in the air. But if it's that former scenario where you lose access to the catalog, that could be quite severe to three 40b entities and the patients they serve.
David Glendinning (11:55)
So I understand from our earlier conversation that you kind of have two hats. You work both inside a health system and also work with covered entities. So you talk a little bit about that experience. What have you learned from seeing so many different approaches to to crunching data?
Ted Houston (12:12)
Important to recognize that for every covered entity, the thing that's most important to them is going to be different at an individual level. So for example, if I look at some of the tribal clients I serve outside, if I look at their in-house pharmacy operations, one of them uses a carving arrangement with the state Medicaid agency. That particular state Medicaid agency requires a submission clarification code in one scenario where a claim is 340B, in another where it's not 340B. And of course, for them, duplicate discount prevention is huge for compliance purposes.
Ted Houston (12:40)
So when I build out a TPA model for them and customize it, we include logic that if the claim would otherwise be eligible for 340B and it's a Medicaid payer, however, that submission clarification code is missing, we will withhold that from the accumulation and put that into a work queue where someone from that pharmacy will go back and readjudicate the claim with the proper submission clarification code and resolve that. That's just an example of how you can work with your own data to avoid compliance issues. And by having access to your own data.
Ted Houston (13:08)
You may have access to additional fields that maybe aren't incorporated into a standardized data model with a another third-party administrator. So that's just a cool example of how we can build custom things that help improve compliance. I think that if you look at other organizations, like referrals may be the number one thing for them. And there could be a lot of activity where patients are experiencing primary care and they're going out and they need additional specialist care. And if you're not closing those gaps, you're missing out on significant opportunities.
Ted Houston (13:33)
And the savings that you bring in from things like referrals and other programs like that, that can lead to things like formulary expansion depending upon the pharmacy site. So access to care is also intimately related to using your data appropriately.
David Glendinning (13:47)
As you well know from wearing both of these hats, hospitals often have data coming in from all different systems. So w what do you see as the best way to bring all of that information, all of that data together in a meaningful way?
Ted Houston (14:00)
One thing that I sometimes see, like if I go and look at like a hospital or health system, is there will be a veritable cornucopia of Excel spreadsheets distributed all across a file location or storage. And so the more that you can take your individual data sources and consolidate them into perhaps not a single pane of glass, but a fewer things to look at in a consolidated manner, that really helps provide actionable visibility into your program and what data is most important.
Ted Houston (14:25)
so for example, if I have some of my analysts at St. Francis and we're working through auditing, it may be very helpful to have a standardized data extract from our third party administrator and just have some built-in logic using tools like either Excel or Power BI that just scan for every single fee for service or MCO Medicaid. So that's not something that we have to worry about as intensely and that can be flagged within the data set. So they can spend more time reviewing the chart for clinical appropriateness or other things that can actually move the lever in terms of financial performance.
David Glendinning (14:53)
I know you plan on highlighting some practical examples of all of this during your session here at the conference. can you share a few areas with us where you see how better data management can make an actual difference for a 340B hospital?
Ted Houston (15:07)
One of the things I would point to is oncology workflows. At St. Francis, we have two dish facilities that participate in 340B. Both of them have their own unique oncology practice. St. Francis has an entity-owned oncology pharmacy tied to the main or primary entity. So one of the things that we sometimes see is as the data flows into the third-party administrator from both sites, the data will first look at the primary relationship. And then if it doesn't qualify after a certain number of days, it will start to retest against that secondary relationship.
Ted Houston (15:36)
So I think if we look at the value of those missed claims, that can easily be tens of thousands of dollars on certain oncology medications, which has direct benefit to patient. The other issue is that as if you don't work those claims manually or take care of them with like a white glove approach, sometimes that delay of moving from one test to the second test, that's gonna start to eat a part of that forty five day window if that manufacturer has in-house or entity owned pharmacy restrictions. so that would be just one example of working through those types of issues.
David Glendinning (16:04)
And of course, not every hospital has a huge 340B team or significant technology resources that go along with that team. So how should organizations think about the concept of scaling these strategies to the size of the hospital that they are in?
Ted Houston (16:21)
There's a couple steps involved in that. number one is definitely self-education. So taking opportunities to educate yourself as well as your team on how to use different analytical resources, identify which of those use cases is going to have the largest actual financial or compliance impact. That's going to be important. When it comes to actually requesting enhanced resources, evaluating what's out there in the market, are there things that are already pre-available for different vendors that you could certainly tap into on a much shorter basis as opposed to building them up yourself?
Ted Houston (16:49)
In either case, you're usually gonna have some type of capital outlay or request expenditure that's tied to it. So it's important to make sure that you communicate in a concise manner what the value proposition is in terms of compliance or savings. And sometimes when you have to transcend multiple levels of an organization to have those asks fulfilled, it's important to pull on your other 340B stakeholders who may be at the higher level of the organization and have those better relationships to can Okay, well, this is really critical to our mission or our bottom line or our uncompensated care. So we need to make this happen on a faster time span.
David Glendinning (17:20)
So much to think about. So let's talk bottom line at the end here. Looking ahead, w what kind of advice would you give to hospitals as all this data becomes an even bigger part of their 340B operations, as you mentioned?
Ted Houston (17:33)
It's important to have your staff spend time reviewing things that are actually actionable as opposed to spending time reviewing things that are noise. And I think that really gets to the idea of investing in the quality of the data that you have instead of just the volume or just adding on an analytic service. Because whenever you have a data set, there are an immeasurable number of metrics you come up with that are really cool, fancy, but they don't move the needle on anything for 340B or for a compliance purpose. And so those are the things you need to kind of stay away from and just prioritize what actually produces a meaningful impact.
Ted Houston (18:02)
As we see compressions in the data cycle and we don't know necessarily how that's going to look, forty-five days could become 30. We we don't really know where the enforcement boundary is. So if you can get automation going and reduce the amount of time that you have people manually reviewing claims, that's very important. if you just think about extraneous things, that can happen too. So what if you have a staff member who goes out on a leave of absence or something else happens? If you're really a manually intensive program.
Ted Houston (18:27)
That can really hurt you when you're missing staff. So it's important to cross train and it's important to really lean into automation that has been proven and demonstrated.
David Glendinning (18:35)
Well, Ted, I am so thankful there are people like you out there in the 340B world helping all of us English majors through navigate through all this data. So you keep crunching those numbers and coming up with those solutions and we'll keep telling those stories about it. So thank you so much for being here. I learned a lot. It's a fascinating subject.
Ted Houston (18:56)
Thank you, David.
David Glendinning (18:58)
Our thanks again to Ted Houston for sharing his expertise on how 340B hospitals can get more value from their data.
David Glendinning (19:05)
As Ted discussed, hospitals need to focus on the information that can help them improve compliance, identify savings opportunities, and respond to increasingly complex reporting expectations. We will be back in a few weeks with our next episode. In the meantime, as always, thanks for listening and be well.
Narration (19:28)
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter at 340B Health and submit a question or idea to the show by emailing us at podcast at 340bhealth.org.