Scale multiplies savings. It multiplies exposure identically.
Disproportionate share hospitals account for the large majority of 340B purchasing nationally. One patient-definition error repeated across two hundred clinics is not a small finding — it is the same finding, two hundred times.
At a glance
- 01Share of 340B purchases
- ~79% (DSH)
- 02GPO prohibition
- Applies
- 03Typical CP locations
- 20–300+
- 04Decision cycle
- 3–12 months
What hospital 340B teams tell us
These are the six issues that come up most often on first calls with hospital pharmacy and compliance leaders. If several look familiar, that is normal — they tend to arrive together.
- Manufacturer contract pharmacy restrictions eroding savings faster than anyone is modeling
- No independent verification that the TPA is capturing every eligible claim
- Patient definition applied inconsistently across service lines and acquired practices
- Child site registration lagging behind clinic openings and acquisitions
- Multi-state operations facing eighteen-plus different contract pharmacy laws
- GPO prohibition compliance never independently audited since the program began
We are used to committee processes and will provide the security, insurance and credentialing documentation your procurement team needs without being chased for it.
Contract pharmacy and duplicate-discount rules diverge state by state.
A system operating across state lines is really running several different regulatory environments under one 340B program — what is compliant in one state can be a gap in another.
Where hospital engagements usually start
Hospital 340B — common questions
01Does the GPO prohibition apply to us?
It applies to disproportionate share hospitals, children's hospitals and free-standing cancer hospitals. It does not apply to critical access hospitals, rural referral centers or sole community hospitals. For health systems containing several of these, purchasing pathways must be configured differently by facility — which is exactly where errors accumulate.
02How do we handle 340B across an acquisition?
Acquired sites cannot be registered until they appear as reimbursable outpatient facilities on your most recently filed Medicare cost report. In the interim they cannot purchase at 340B pricing. Integration also means reconciling two policy sets, two patient definitions and often two TPAs. This should be planned before close, not after.
03Our contract pharmacy savings are falling. What can we actually do?
First, quantify the decline by manufacturer, drug and location — most entities have a general sense rather than a number. Then assess designated-pharmacy elections where a manufacturer permits one, check state law protections for each state you operate in, and evaluate whether entity-owned dispensing is viable for the affected drugs.
04We have an internal audit function. Why use an external firm?
Internal audit brings method; external review brings 340B-specific criteria and independence. HRSA looks for evidence of regular self-auditing regardless of who performs it, and many hospitals use us annually to test the same areas their internal team monitors continuously.
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Next step
Start with the question your CFO will ask.
"What is our 340B program worth, and what is our exposure on it?" Most hospitals can answer the first half with confidence and the second half not at all.