For those who have had an audit from Turnkey, you already know how important it is to have a strategy in place for every drug in every location that ensures 340B compliance. At the very least, this should include ensuring that patient-specific and drug-specific auditable records are maintained and available, that 340B drugs are only qualified for 340B eligible patients, and that duplicate discount violations are prevented.
Furthermore, if you are a disproportionate share hospital (DSH), children’s hospital, or freestanding cancer hospital subject to the GPO prohibition (GPO affected entity), you’d better also have a strategy in place for every such drug and location that ensures against possible GPO prohibition violations.
During our audits, we stress a detailed analysis of your most recently-filed Medicare cost report in the context of every location and setting that could potentially purchase or utilize a drug. While this sounds straight forward, in reality it can quickly become rather complex. For example, consider the number and types of drugs that are covered outpatient drugs (CODs) under Section 1927K(2) of the Social Security Act (SSA) and subject to the GPO prohibition. Do you know of every location at your covered entity that may be occasionally ordering or using a COD? Gaining this information and implementing a strategy is critical, and the possible ramifications of not doing so can be devastating. For example, being removed from the program or being required to repay affected 340B savings could be financially devastating.
Take home message: Spend as much time and resources as necessary to ensure you have a strategy in place for every drug and every location to ensure 340B compliance. Include a strategy to ensure full compliance with the GPO prohibition if you are a DSH, children’s hospital, or freestanding cancer hospital. As always, we are available to help you accomplish this!