Streamlining 340B Public Health Service Safety Net and Rebate Programs

Millions of patients have been touched nationwide by our client’s services that unite patients and community pharmacies. Their innovative and industry-standard setting technology supports the safety net mission by engaging its contracted pharmacy network-based delivery of Public Health Service 340B, GPO and PAP drugs.

Our client manages one of the best 340B programs in the country; operates the nation’s best 340B contracted pharmacy network to bring savings to patients per the 340B Drug Program mission, and is a pioneer and technology leader in 340B processing and automation through its proprietary system leveraging web-based technologies.

Our client wanted to enter the Medicaid market for the reclassification of 340B claims.  They enlisted Y&L to create an application that helped them achieve the following goals.

Application Goals:

  • Create and support a simple process for MCOs, pharmacies and 340B administrators to submit data files for the identification of 340B claims.
  • Create and support a scalable, comprehensive and robust solution for MCOs to demonstrate to the State an effective 340B compliance and performance program across both retail and specialty pharmacy patients.
  • Identify and report to the State all Medicaid claims in which the ingredient cost was purchased with 340B discounted prices.
  • Create a solution to share 340B data, savings, performance and refunds with ease using agreed upon standards.
  • Prepare shared savings invoices and reports and settle funds collection and payments.

Solution Overview:

At a high level, Y&L created a solution that contained multiple integrations/interfaces, a flexible and scalable audit rules engine and multiple web-based portals.

Following are the three core development activities that took place:

  • Develop an audit/matching engine to support the solution for Managed Care Providers (MCO) to identify and report 340B claims:
  • Where savings can be achieved and state rebate position maintained, produce and transmit the 340B state file reversing managed Medicaid claims and reclassifying them as 340B.
  • Determine shared savings between the state, MCO, and entities and settle funds.
  • Develop specifications and approach for receiving claims from the entities; provide feedback to entities of approvals “passing” or “failing”.
  • Develop three web-based portals:
  • MCO portal to view claims and invoices and produce reports
  • Entity portal to view claims and invoices and produce reports
  • Client 340B administrative tool to establish state specific and MCO specific rules; set up to also allow for multiple client 340B reimbursement models.


Critical Success Factors:

Following are the success factors that guided our development activities:

  • Scalable Solution – Expected monthly claim volume of 100+ million
  • HIPPA Compliance – Safeguards needed in handling and data transmission
  • Claims Management – Solution needed to be able to handle single and multi-payer claims and identify claims uniquely between the MCO and Entity to calculate savings.  It also required a robust claims reversal process.
  • Governance – Needed the ability to track claims from source data to invoicing rejection.  In addition, it required the ability for the MCO/Entity to track the status of data submission and individual claims without engaging internal client resources. 

End Result 

  • Client successfully entered/created a new market space through programmatic innovation which will deliver significant revenue to themselves, MCOs and other entities.
  • Project was scoped and performed entirely by Y&L.  Y&L was responsible for the overall software development lifecycle.
  • Y&L engaged 15 onsite/offshore resources to deliver this solution.
  • Our scalable solution met the client’s expected demand. The flexible application design allows for further scaling by adding hardware.
  • Y&L will be performing application maintenance services (AMS) to support/ enhance the solution over the next 6 to 12 months.