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340-B Split Billing

The Federal Drug Pricing Program began in 1992 when section 340B of the Public Health Service Act came into effect. It was enacted as a way to provide financial relief to those entities who  care for the under-served. The program requires drug manufacturers to price certain outpatient drugs to eligible health care centers, hospitals, and clinics (covered entities) at a reduced, or ceiling, amount. The 340B ceiling prices, also defined in the statute, are the maximum prices a covered entity would have to pay for a given drug - in addition, covered entities are free to negotiate discounts that are lower than the ceiling price (sub-340 prices). As a result, the 340B Pricing Program has been found to offer covered entities prices that are, on average, around 50% lower than average wholesale prices.

Once a hospital or clinic has determined that they are covered under the 340B program, they must then determine how they will order and receive their 340B drugs. This can be done in two ways: they can either contract directly with the drug manufacturer or work through a wholesaler capable of administering 340b contract pricing. In this case, a wholesaler that specializes in serving covered entities in the 340B program can then assist the covered entity with loading 340B contracts and managing their 340B replenishment procedures.

Most entities find that working with a wholesaler, like Morris and Dickson, not only simplifies the process, but also saves time and allows their personnel to allocate time to other projects.

As part of our goal to offer the best prime vendor service plan available, and to provide our customers with both easy access to the best possible 340B opportunities and an efficient, easy-to-use, stock replenishment method, we created the 340B Split Bill software program. The software both simplifies the ordering and tracking of 340B drugs, and (because the software is designed for stock replenishment purposes only) eliminates the need for dual inventories.

A simple information file is pulled from the pharmacy’s own dispensing software and is uploaded via a secure connection to the Morris and Dickson WebPortal website. Because of the simplicity of the information file, virtually any software will be compatible.

Once the information file is uploaded into the Split Bill web-site, the customer becomes privy to all of the software’s specialized features:

  • The pharmacy’s information file is used to automatically generate a recommended replenishment order based off the accrual of their 340B drug usage. This order can then be edited, according to the pharmacy’s needs, before being finalized.
  • Detailed item information allows the customer to edit their 340B replenishment order in an informed manner, and management controls such as priority settings and reorder points streamline the ordering process.
  • An upload summary allows the customer to view how many lines were uploaded and alerts them as to how many of those lines were exception items (items that do match a valid M&D 340B item).
  • An exception report allows the pharmacy to quickly link exception items to valid M&D items. Easy access to the Morris and Dickson 340B catalog simplifies the process of a direct NDC to NDC link. Drugs showing an invoice history are always shown first, followed by additional items that have no invoice history. And once an item is "linked", the link is stored and, on subsequent orders, will not need to be repeated.
  • An invoice summary tracks and displays the amount of money saved on the 340B program.
  • Audit reports track utilization and purchase histories. Reports may be run off of a date range.