Southwest Consulting Associates Blog

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.

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.

The 340B Program is an essential lifeline for most Federally Qualified Health Centers (FQHC) to be able to provide care for their patients. FQHCs are community-based health care providers that receive funds from the Health Resources and Services Administration (HRSA) Health Center Program to provide resources in underserved areas. These health centers may be Community Health Centers, Migrant Health Centers, Healthcare for the Homeless, and Health Centers for Residents of Public Housing. They must meet a stringent set of requirements in order to keep their grant funding. HRSA conducts operational site visits to monitor compliance with their grant funding requirements. In 2015, HRSA added a few basic 340B compliance questions to the regular grant operational site visit to potentially identify sites that need further investigation by the Office of Pharmacy Affairs (OPA). These questions revolve around 340B policies and procedures, self-auditing and 340B monitoring.

The next 340B quarterly registration period is once again upon us.  The registration window will begin on October 1st and conclude on October 17th.  The traditional 340B enrollment period is usually the 1st through the 15th, however, during this particular window, both the beginning and ending dates fall on a Saturday.  Therefore, the window has been extended to include Monday, October 17th according to the Office of Pharmacy Affairs (OPA).

At the July 340B Coalition, participants had several opportunities to hear directly from OPA on various 340B Program topics. Julie Zadecky, a pharmacist within the Program Performance and Quality Branch at the Office of Pharmacy Affairs, spoke about their latest audit enhancements and the Office of Pharmacy Affairs (OPA) strategy for program integrity. She also offered a few 340B audit tips based on HRSA audit findings.

A few of the program integrity improvements discussed:

Reviewing HRSA audit results can offer 340B covered entities excellent insight to areas that HRSA is focusing on during their audits.  Additionally, entities can get ideas for areas where their self-audits should be concentrated by monitoring HRSA’s audit results.

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:

Hospital Authorizing Officials should have received an email from 340b.recertification@hrsa.gov with their username and password for recertification. Hospitals have 28 days to recertify for the 340B Program or they risk being removed from the 340B Program.

Things to remember:

The 340B Coalition had another record breaking attendance. The Coalition was held on Monday, July 11th through Wednesday, July 13th in Washington, DC. The 340B Coalition agenda was loaded with informative speakers and there was a lot to talk about!

At the 340B Coalition, Captain Krista Pedley, Director of Office of Pharmacy Affairs, confirmed that hospital recertification will be in August. The recertification process is done on a rolling basis for each entity type.  All covered entities are required to recertify for the 340B Drug Pricing Program each year. If the 340B covered entity fails to recertify, they will be removed from the 340B Program.  The covered entity’s Authorizing Official should be on the look-out for their email with recertification details.