3 Key Compliance Components for 340B Covered Entities

April 29, 2022

340B Compliance

The word “audit” can make anyone squirm, but this is especially true for health centers that depend on HRSA’s 340B Drug Pricing Program for vital funding. An audit with findings could mean paying back money that otherwise would have been used for patient care or, in a worst-case scenario, termination from the program entirely.

The Bizzell Group – the organization currently contracted by the Health Resources and Services Administration (HRSA) – is responsible for auditing 340B participating healthcare organizations, also known as covered entities (CEs). The Bizzell Group currently audits over 200 CEs per year, which translates to a health center experiencing an audit at least once every seven years.

Audits exist for two reasons, both of which are in place to preserve the integrity of the 340B Drug Pricing Program. The first is to ensure that CEs aren’t “double-dipping,” or getting discounts from both the Medicaid Drug Rebate Program and the 340B Program. The second is to ensure that 340B pricing is only applied to drugs dispensed to patients who meet 340B patient eligibility criteria.

Here are three key compliance components for 340B CEs.

1. When it comes to policies and procedures, leave no room for interpretation.

HRSA established 340B Program requirements for patient eligibility, but when it comes to specifics about how your organization audits prescriptions for 340B pricing, it’s important to be as specific as possible. For example, Patient Eligibility Guidelines state that a patient must have an established relationship with the CE, and the CE must be responsible for the patient’s care. But what does that mean, exactly? How does your organization choose to define “established relationship” and “patient responsibility”?

When an auditor asks how or why a script was determined eligible for 340B pricing, you must be able to explain your reasoning using documentation in your health system’s Policies and Procedures. In many cases, your assigned auditor will refer to your Policies and Procedures to determine whether a script is eligible for 340B. This is especially true if the prescription is a referral prescription. As long as the prescription followed your stated requirements – and it was not also submitted for Medicaid pricing – the prescription should satisfy 340B requirements.

2. Audit carefully, audit frequently.

Self-audits at a regular frequency are the backbone of any pharmacy compliance program. For many pharmacy and 340B program managers, auditing prescriptions is a part of daily pharmacy management.

For non-340B prescriptions, self-audits could be conducted on a monthly, quarterly or annual basis, depending on your internal resources. For 340B prescriptions, in-house pharmacy prescriptions should be audited daily, while contract pharmacy and specialty pharmacy prescriptions can be audited monthly.

When conducting a self-audit, choose a select number of randomized transactions and cross-check all patient demographics, drug procurement and insurance information. For referral prescriptions, verify that referral documentation exists and consult notes from the referred-to provider are present in your EHR. Additionally, put yourself in the shoes of a Bizzell Group auditor – are you able to use your Policies and Procedures to explain why you included a referral script in your program?

In addition to regular self-audits, external audits by an independent auditing firm should be performed at least once per year.

Need help getting started? Download our sample 340B Referral Tracker and Audit Policies, courtesy of one of our clients. Curious what independent auditors our clients are using and recommend? Reach out and ask!

3. Choose the right technology partners.

Community health centers, critical access hospitals, and other 340B-eligible entities are often strapped for time and resources. Choosing the right technology and service partners – from third-party administrators (TPA) to consulting firms and technology providers – is paramount to making sure you are getting the most out of your 340B program. 340B Recovery delivers a dual-prong solution that maximizes 340B savings by finding missing prescriptions written by referred-to providers and eligible providers. Our compliance-first 340B referral capture reads referral data from client EHRs to better track continuity of care after a referral is made, which is often the endpoint of what an EHR alone can manage. Afterward, the service component of 340B Recovery comes into play as specialist consultation notes are requested, reviewed for compliance, and made available in an online portal. Finally, R1 integrates with the pharmacy TPA to switch prescriptions over to 340B pricing when a prescription is approved for program pricing as determined by our compliance specialists.

Taking these steps can help ensure readiness for an HRSA audit, thus helping to protect a CE’s 340B savings. Learn more about 340B Recovery or schedule a meeting to talk to our team today.

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