Southwest Consulting Associates (SCA) continues to analyze HRSA’s posted results for covered entity audits to establish trends in the findings. Since 2012, the HRSA auditors have audit results posted for 340B covered entities in every State except one; they have even audited a covered entity in Puerto Rico. Can you guess which State has no audit results posted?
Additionally, since 2012, HRSA has audited approximately 550 covered entities, 7,000 child sites and 13,000 contract pharmacies. The last audit results were posted March 31, 2016. HRSA has now posted all of the audit results for 2012, 2013 and 2014. They have posted audit results for 190 of the 200 covered entities audited in 2015 and the results for 23 covered entities audited in 2016. We know that HRSA audited 48 covered entities in the first quarter of FY 2016 (October 2015 – December 31, 2015). If they continued at that pace, they should be near 100 audits so far this year.
Published Audit Results for 2015
As mentioned above, HRSA has posted results for 190 of the 200 340B covered entities audited in 2015. Based on 2015 audits published through March 31, 2016, the percentage of audits breakdown as follows:
|
• Disproportionate Share Hospitals |
58% |
|
• Federally Qualified Health Centers |
12% |
|
• Children’s Hospitals |
1% |
|
• Critical Access Hospitals |
15% |
|
• Sole Community Hospitals |
4% |
|
• Other Centers |
10% |
In terms of audit results:
77% of the covered entities audited had adverse findings
46% had multiple deficiencies identified
60% of the cases required repayments to the drug manufacturer
8% of covered entities had contract pharmacies removed from the 340B Program
46% were found with Diversion
74 entities had 340B drugs dispensed at contract pharmacies for prescriptions written at ineligible sites not supported by responsibility of care
13 entities did not have adequate controls in place for proper accumulation & prevention of diversion
28% were found with Duplicate Discounts
42 entities had an incorrect NPI or Medicaid Number listed in the Medicaid Exclusion File
10 entities were billing Medicaid contrary to information included in the Medicaid Exclusion File
46% were found with Incorrect Database errors
36 entities had 340B drugs administered at offsite outpatient facilities that were not listed in HRSA’s database
27 entities registered a Contract Pharmacy without a contract in place
9% obtained covered outpatient drugs from a GPO
3 child sites were removed from the 340B Program
2 covered entities were removed from the 340B Program
Published Audit Results for 2016
Here is our first look at the 2016 audits. Based on 2016 audits published through March 31, 2016, the percentage of audits breakdown as follows:
|
• Disproportionate Share Hospitals |
44% |
|
• Federally Qualified Health Centers |
22% |
|
• Children’s Hospitals |
4% |
|
• Critical Access Hospitals |
13% |
|
• Rural Referral Centers |
4% |
|
• Other Centers |
13% |
In terms of audit results:
57% of the covered entities audited had adverse findings
30% were found with Diversion
30% were found with Duplicate Discounts
13% were found with Incorrect Database errors
26% of the cases required repayments to the drug manufacturer
17% of covered entities had contract pharmacies removed from the 340B Program
As HRSA posts more audit results for FY 2016, we will provide you with a more detailed breakdown of the findings. Reviewing HRSA’s audit results can help covered entities examine their 340B Program and ensure audit readiness. Also, check out our best practices blog HERE.
We think the glaring takeaway from this round of analysis continues to be that during a HRSA audit, most covered entities are found noncompliant in at least one area and many in multiple areas. Violations could put the facility at risk of being prohibited from future participation in the program and/or repayments to drug manufacturers. It is essential that participating facilities maintain auditable records and assess their level of compliance with ALL 340B drug pricing program rules. Covered entities should be performing regular self-audits and it is expected by HRSA that an annual independent audit is conducted.
Southwest Consulting Associates has experience in assisting clients through HRSA audits as well as performing annual 340B compliance audits and 340B quarterly compliance audits to minimize or prevent adverse findings in a HRSA audit. To find out more about SCA’s 340B external audit program, please visit our website or request a proposal at 340B@southwestconsulting.net.
