HRSA has made it clear that it is an expectation for 340B covered entities to have an annual independent audit of their contract pharmacies. Covered entities should not take the wording “expectation” lightly because in the audit process, HRSA will ask when the last independent audit of contract pharmacies was performed. HRSA set the expectation of an independent audit as a tool to ensure covered entities have adequate oversight of their contract pharmacy.
If HRSA determines an entity does not have oversight of their contract pharmacies, HRSA can REMOVE the contract pharmacies from the 340B Program and require REPAYMENT to drug manufacturers. If violations are found in the contract pharmacy, it is difficult to challenge the finding of inadequate oversight of contract pharmacy if the entity has not used the tool that is an expectation of HRSA.
Additionally, the proposed 340B Drug Pricing Program Omnibus Guidance (Mega-Guidance) did clarify the expectation of an annual independent audit and added a requirement for a minimum of quarterly reviews of each contract pharmacy. HHS states in the guidance that they are “proposing standards for audit and quarterly reviews to ensure that compliance efforts related to contract pharmacies result in the early identification of problems, implementation of corrections and the prevention of future compliance issues”.
Contract pharmacy risk continues to stand out in HRSA audit results. See our latest HRSA audit results analysis blog HERE. HRSA terminated contract pharmacies from 16 covered entities’ 340B Programs in 2015 and has already terminated contract pharmacies from 4 covered entities in 2016. Approximately 50% of the contract pharmacy terminations were due to findings that the covered entity did not have adequate oversight of their contract pharmacies.
HRSA audits continue to focus on covered entities providing appropriate oversight of their contract pharmacy arrangements. Entities must meet the “5 Requirements for 340B Compliance in Contract Pharmacy” provided by HRSA and have vigilant ongoing self-auditing of contract pharmacy prescriptions. Providing oversight of contract pharmacies can be extremely complex. Having an external independent assessment can be beneficial to ensure compliance with the many aspects of the program in addition to meeting HRSA’s annual independent contract pharmacy audit expectation.
In addition to providing annual independent audits of contract pharmacies, SCA has continued to develop its service offerings in anticipation of changes in the regulatory environment. In 2015, SCA added quarterly monitoring to our 340B services to meet the changing needs of our clients. SCA reviews 100% of contract pharmacy prescriptions for provider eligibility, encounter eligibility and duplicate discounts. This also includes monitoring prescription reversals, targeting prescriptions that are a high risk for diversion and provide self-audit guidance. This helps narrow the focus of internal self-audits to high risk areas and saves staff time.
What steps has your 340B covered entity taken to comply with the expectations of HRSA in the contract pharmacy area? If selected by HRSA for an audit, will your covered entity be able to answer when the last independent audit of your contract pharmacy(ies) was performed?
