Fiscal year 2016 marks HRSA’s fifth year auditing the 340B program. They are on track to conduct 200 audits of 340B covered entities this year as well as five manufacturer audits. The selection process for entities to be audited continues to be the same:
Risk-based audits which factor in the complexity of the covered entity’s 340B Program such as the number of outpatient facilities, number of contract pharmacies and volume of purchases. The more complex the 340B Program, the greater the chances of being selected for a risk-based audit.
Targeted audits triggered by reported violations; Or
Allegations of the 340B Program from manufacturers or the public. OPA takes all allegations seriously although not all will result in an audit. If concerns cannot be resolved by other means, they may result in an audit. HRSA may also do a targeted audit to follow-up on previously audited entities to ensure necessary payments have been made to manufacturers and corrective action plans have been fully implemented.
Captain Krista Pedley, Director of Office of Pharmacy Affairs, discussed audit findings during her presentation last month at the 340B Coalition. She told participants that since 2012, there has been a downward trend in database issues and findings related to duplicate discounts. HRSA believes the trend is likely due to increased efforts related to education and focus on compliance.
Since 2012, HRSA has conducted 585 audits that encompass over 8,000 outpatient or subgrantee sites and over 13,000 contract pharmacies. All of the audit results have been finalized and posted on HRSA’s website through FY 2015. Fiscal year 2016 340B audit results are posted as HRSA completes each audit.
The findings have varied across the board. Some are very minor, requiring basic corrections to the 340B database such as contact or address information. Other audits have found adverse findings such as diversion, duplicate discounts, and GPO prohibition violations requiring paybacks to manufacturers and in some cases, termination of the 340B Program in all or part of the 340B covered entity.
Southwest Consulting Associates (SCA) continues to analyze HRSA’s posted 340B audit results to monitor trends in the findings. Based on 2015 and 2016 audits published, the percentage of audits breakdown as follows:
|
Covered Entity Type |
2015 |
2016 |
|
Disproportionate Share Hospitals |
59% |
59% |
|
Sole Community Hospitals |
4% |
4% |
|
Children’s Hospitals |
1% |
3% |
|
Critical Access Hospitals |
14% |
9% |
|
Rural Referral Centers |
0% |
3% |
|
Federally Qualified Health Centers |
12% |
16% |
|
Other Centers |
10% |
6% |
|
Audit Findings |
2015 |
2016 |
|
CE audited that had adverse findings |
78% |
67% |
|
Multiple deficiencies identified |
48% |
46% |
|
Required repayments to the drug manufacturer |
61% |
54% |
|
Contract pharmacies removed from the 340B Program |
10% |
7% |
|
Diversion |
47% |
42% |
|
Duplicate Discounts |
30% |
24% |
|
Incorrect Database Errors |
48% |
37% |
The number one diversion finding continues to be 340B drugs dispensed at contract pharmacies for prescriptions written at ineligible sites not supported by responsibility of care. You MUST be able to link a prescription back to a qualified visit showing that the covered entity had responsibility for the patient’s care surrounding the prescription.
The duplicate discount finding that appears most often is an incorrect NPI number or Medicaid number listed in the Medicaid Exclusion File. If a covered entity decides to carve-in Medicaid, (billing Medicaid for drugs purchased at a 340B price), they must list their National Provider Identifier (NPI) and any Medicaid billing number on the 340B Medicaid Exclusion File. This includes any Medicaid billing number that the billing office is adding to the claim to bill Medicaid.
There also continues to be a high number of database errors with contract pharmacies registered on the HRSA database without a contract in place and entities that administered 340B drugs at offsite outpatient facilities not listed on HRSA’s database. Covered entities should assign someone to check the HRSA database quarterly to ensure the entity’s information is correct. It is a good idea for covered entities to keep a copy of any contracts with their pharmacies. Don’t rely on the contract pharmacy to keep up with the contract. Keep the contract where it is easily accessible.
340B covered entities should be constantly preparing for an audit and ensuring their sites are in compliance. Reviewing HRSA’s audit results can help covered entities understand where to examine their 340B Program to ensure audit readiness. HRSA makes it clear that the covered entity is ultimately responsible for ensuring 340B Program compliance. For more information on HRSA audits and best practices, see our blog HERE.
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