Southwest Consulting Associates Blog

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:

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.

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.

The Department of Health and Human Services (HHS) published in the Federal Register today that they are reopening the comment period for the June 17, 2015, proposed rule on “340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation.”  Comments will be accepted on ANY aspect of the proposed rule but HHS is asking for additional comments and input in three specific areas:

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.

In March, a few covered entities were surprised by potential HRSA findings of diversion due to discharge prescriptions for inpatients that did not qualify for 340B. This caused concern that HRSA may be implementing some of the changes found in the proposed 340B Omnibus Guidance released for comments last year.  Specifically, the proposed guidance stated that 340B purchased drugs can ONLY be used if the discharge prescription is written for a patient that is billed as an outpatient.

Only certain non-profit healthcare entities that have federal designations or receive funding from specific federal programs are eligible for the 340B Drug Pricing Program. Entities must meet and maintain certain criteria in order to register and be approved to purchase discounted drugs through the 340B Program. For-profit hospitals are not eligible to participate in the 340B program. Healthcare entities that may be eligible are: