There is a considerable number of moving parts associated with 340B compliance and ongoing monitoring by the covered entity is essential for a successful program. As we perform independent 340B compliance audits across the country, we find that contract pharmacy is by far the highest compliance risk area of the 340B Drug Pricing Program. Over half of all HRSA audit findings are in the 340B contract pharmacy component, as well as paybacks to the drug manufacturers.
HRSA audit results posted to date show:
35% of the findings are due to the contract pharmacy dispensing prescriptions written at ineligible sites not supported by responsibility of care;
15% of covered entities registered a contract pharmacy without a contract in place or utilized a contract pharmacy prior to registration in the 340B database;
Other contract pharmacy findings include the covered entity not providing contract pharmacy oversight and billing Medicaid without notification to HRSA.
Before a contract pharmacy can dispense 340B drugs on behalf of the covered entity, the contract pharmacy MUST be registered in the HRSA database. Prior to registering a contract pharmacy, a covered entity must have a finalized and signed contract pharmacy agreement in place. The agreement must include all of the essential elements of the 340B contract pharmacy guidelines (75 Fed. Reg. 10272 (March 5, 2010). All of the contract pharmacy locations must be listed in the 340B database AND in the contract pharmacy agreement. When adding a new pharmacy location or changing a pharmacy location, the database and the agreement must be updated with the new location.
The covered entity is responsible for ensuring contract pharmacy arrangements are in compliance with all 340B Program requirements to prevent diversion, duplicate discounts and maintain auditable records. Using a third party administrator or vendor to help with contract pharmacy processing and tracking is only part of a compliance solution. HRSA requires that the covered entity provide oversight through monitoring transactions at the contract pharmacy. Covered entities should have an ongoing auditing program in place to ensure:
- Prescriptions tie to an actual qualified clinical visit of an eligible patient;
- The provider writing the prescription is employed or has a contractual arrangement with the covered entity;
- The responsibility for care surrounding the prescription remains with the covered entity.
Covered entities must stay involved in the oversight of the contract pharmacy. Ensure you have the correct monitoring in place and obtain external assistance when needed. While contract pharmacy does carry high compliance risk, a well monitored program will bring great benefit to the covered entity and supports the goal of expanding services to underserved populations.
