The Bizzell Group, began performing all HRSA 340B audits in fiscal year 2017 and as with most changes, there was concern about how audits might change. One difference from previous HRSA auditors is that the Bizzell Group hired pharmacists and 340B staff with hands-on 340B experience to perform and support 340B audits. We have noticed that having audit staff with hands-on 340B experience has helped the audits run a little smoother. The auditors have a better understanding of how the covered entities work.
The selection process for entities to be audited remains the same:
- Risk-based audits which factor in the complexity of the covered entity’s 340B program such as the number of outpatient facilities, number of contract pharmacies and volume of purchases.
- Targeted audits triggered by reported violations or allegations from manufacturers or the public. HRSA may also do a targeted audit to follow-up on previously audited entities to ensure corrective action plans have been fully implemented.
- Random selections.
The type of audit findings posted for 2017 are similar to the 2016 audit findings; however, the number of findings appear to be decreasing. There have been 146 audit results posted of the expected 200 audits performed last fiscal year, roughly the same number as fiscal year 2016. Of the audits published, 46% resulted in repayments to the drug manufacturer. Covered entities in 35 states were audited. California led the way with 20 audits followed by Illinois and Texas with 10 each.
The top finding posted across covered entities is diversion, specifically, “340B drug dispensed to a patient at entity for a prescription written at an ineligible site.” The covered entity must be able to link a prescription back to a qualified visit at a 340B eligible location showing that the covered entity had responsibility for the patient’s care surrounding the prescription in order for 340B purchased drugs to be used. Keep in mind that every prescription filled with 340B purchased drugs must meet the following criteria:
- The covered entity must have established a relationship with the individual such that it maintained their health care records; and,
- The individual must have received health care services from a health care professional employed or under a contract or other arrangement (e.g., referral) with the covered entity; and,
- The covered entity remains responsible for the individuals care with respect to the drug.
Additionally, the duplicate discount finding that appears most often continues to be, “incorrect or incomplete billing information on the 340B Medicaid Exclusion File.” If a covered entity decides to carve-in Medicaid, (billing Medicaid for drugs purchased at a 340B price), they must list their National Provider Identifier (NPI) and any Medicaid billing number on the 340B Medicaid Exclusion File. This should be the NPI and any Medicaid billing number that the billing office is adding to the claim to bill Medicaid.
There also continues to be a high number of 340B database errors. The top two incorrect 340B database findings in 2017 were, “offsite outpatient facilities were not listed on the 340B database” and “registered contract pharmacy without written contract in place.” Surprisingly, there are still findings for incorrect entry of Authorizing Official, Primary Contact and facility address. Covered entities should assign someone to check the HRSA database quarterly to ensure the entity’s information is correct. HRSA updates the database quarterly and mistakes happen. Keep agreements with contract pharmacies where they are easily accessible. Don’t rely on the contract pharmacy to keep up with the contract. Ensure the contract pharmacy registration date on the HRSA database is after the date on the contract pharmacy agreement or contract.
HRSA makes it clear that the covered entity is ultimately responsible for ensuring 340B program compliance. Covered entities should be monitoring their 340B compliance and always be audit ready. Reviewing HRSA’s audit results can help covered entities understand where to examine their 340B program to ensure audit readiness.