Southwest Consulting Associates will be participating in the 33rd Annual Conference of the Texas Association of Community Health Centers (TACHC) this month and we have been looking back over 340B compliance audits that we have performed for CHCs this year to be able to provide some insight on common findings. In 2015, HRSA added some basic 340B compliance questions to the regular grant operational site visit to potentially identify covered entities that need further investigation of their 340B compliance. These questions revolve around 340B policies and procedures, self-auditing and 340B monitoring. Basically, if you don’t have 340B policies and procedures and you have not set up a self-auditing program for 340B compliance monitoring, it is very likely that your entity will move up the list for a HRSA 340B Compliance Audit.
HRSA does recognize the diversity of covered entities and the need for flexibility in program implementation. They recommend that each covered entity establish and document criterion that demonstrates compliance. HRSA does provide site visit preparation guidance and at the top of the list is “Be prepared to share your organization’s 340B policies, procedures, and other related documents in order to address compliance.” During HRSA’s 340B compliance audit, they request and thoroughly review a covered entity’s policies and procedures. Below are the specific areas that HRSA suggest be addressed in CHC 340B related policies and procedures.
Registration and recertification processes should be documented in the entity’s policies and procedures. Documentation outlining how the covered entity ensures the 340B database is up-to-date and accurate should be included. This should also include the frequency of reviews, how it is documented, and timely updates of 340B database records covering the 340B parent site, child sites and contract pharmacies.
How it is determined what sites are eligible, such as sites that are approved under the grant scope of service as indicated in the Electronic Handbook.
Procurement which includes the identification of all accounts used for purchasing medications.
Identify covered outpatient drug exclusions (non-covered outpatient drug list).
Oversight of contract pharmacies documenting methodology of internal audits and frequency of internal as well as external independent audits.
Tracking and accounting for 340B drugs in a physical inventory including inventory counts and reconciliation with inventory systems.
Tracking and accounting for drugs via accumulation in a virtual replenishment model.
Documentation of situations where an 11-digit to 11-digit NDC match is not possible and how auditable records are maintained to show proper accumulation and replenishment.
Prevention of diversion at the covered entity and contract pharmacies outlining how the service is within the scope of the grant, eligible location, provider eligibility and responsibility of care is confirmed and documented. Documentation of how the entity communicates changes in provider eligibility. Process and documentation needed for referrals. Monitoring process for split-billing software and frequency of monitoring.
Prevention of duplicate discounts at the covered entity and contract pharmacies covering billing processes for patients with State Medicaid, Out-of-State Medicaid and Medicaid Managed Care. Document how the covered entity billing process is communicated to HRSA and State Medicaid (e.g., carve-in or carve-out process). Process for monitoring compliance and the frequency of monitoring.
When and how a covered entity would self-disclose including the covered entity’s definition of a non-compliance material breach.
As always, it is critical that your processes follow what is established in your 340B policy and procedures. It is important for all covered entities, including Community Health Centers (CHCs), to have 340B policies and procedures that document the requirements and methodology for standardized practices throughout the covered entity. Policies and procedures should provide clarity to ensure compliance with all applicable 340B regulations, federal and state laws. They need to be continually evaluated and modified to reflect the covered entity’s actual practice.
As part of SCA’s annual independent 340B compliance audit we validate that the covered entity’s current processes are within the expectations and requirements of HRSA and edit the entity’s policies and procedures to appropriately reflect their practice, if needed. To find out more about SCA’s 340B external audit and compliance program, please visit our website or request a proposal at 340B@southwestconsulting.net.
