Author Archives: Nate Raney

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Making Sure Your Clean Site Is Clean

Similar to the often used phrase “be sure this is included in your policy and procedures”, auditors get the same satisfaction by telling folks that “this needs to be included as part of your routine self-auditing”. It is easy to assume clean sites don’t need much attention in this area because of their very nature – they are a clean site (340B only with physical 340B inventory) and all covered outpatient drugs within them are considered eligible for 340B. While this set-up can seem much more straight forward than managing a mixed-use location, its simplicity should not be construed as a ‘set it and forget it’ type situation; proper oversight and auditing practices are still essential to ensuring a compliant 340B Program, even in a clean site. I would like to share a few considerations to set your clean site up for success.

The first consideration is to make sure you are treating your clean site like any other area of your program where medications are administered to patients. That means you need to make sure you have proper documentation supporting the administration of the medication. A monthly review of clean site transactions is critical to make sure documentation is readily available and diversion risk is mitigated. These records should include a documented order, documented administration, and documentation supporting the medication was administered at an eligible location per your Medicare Cost Report or scope of grant. This first step is important because without these records, we can’t pass GO. The expectation of auditable records goes beyond a simple “administered on 1/1/21 at 14:40 in the Raney Clinic and verbal order by Dr. Nate”. You need to be able to produce utilization data (e.g., what was administered or wasted/expired) and purchase data. Anytime a 340B product moves, you should be able to account for its final destination in the utilization data. This process isn’t the same for everyone. For example, some sites may rely on patient-specific medication administration records for utilization data, while others may rely on detailed inventory records, or even accumulation records so long as they are used solely to track charged medications and not for purchasing.   As the old adage goes, “When you have seen one 340B Program, you have seen only one 340B Program.” No two programs are the same and as long as you are able to produce comprehensive auditable records, your way is the right way.

Moving right along into another self-audit consideration, and arguably one that isn’t done as often as it should, is an inventory reconciliation audit of your clean site. Reviewing utilization and purchase data to ensure what is on the shelf is what is expected by taking total purchases minus other variances in inventory (administrations, waste, expired, etc.) and reviewing inventory on hand. Basically, such a review mitigates the risk of diversion. This is why it is important to ALWAYS document medication waste and expired medications to ensure you can track and trace all 340B physical inventory. Regular self-auditing (e.g., quarterly) of a reasonable number of individual medication utilization records (e.g., 5 drugs) should be completed for internal use to ensure that clean site 340B purchases are consistent with utilization in light of current inventory on hand. The completion of these audits should be documented for internal use, issue identification, and reconciliation, while a blank audit log table showing the headers/elements reviewed can be provided during an external audit (if warranted). An example of the process is demonstrated in the sample audit log table below.

Moral of the story? Get as excited as auditors do when self-auditing is mentioned. It will not only set your covered entity up for success but will also make you good stewards of the 340B Program and, if you are like me, come with the added bonus of allowing you to sleep better knowing your program is as compliant as you can make it!

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A Difference Made

We hear negative goings-on in the world so often that we gloss over what happened and keep reading down the page.  We are engrossed in our work and don’t always respect why we continue to do the daily grind.  Some work for a paycheck.  Some work for the difference they make.  I believe that most do it for a combination of both.  It is easy to get absorbed in your work and not think about how you are making a difference.  

Recently, our CEO, Rob, sent the team an email with a link to an article discussing hospital closings and discussed how Turnkey has helped entities realize savings that have actually kept their doors open.  The article made me stop and reflect on the importance of the 340B program. More specifically, I reflected on how important the program is for rural communities. Each of us who works in the 340B space makes a difference.  If that statement is the only thing you take away from this piece, I have accomplished my goal.

​Hospitals closing or hospitals limiting their services occursmore often than not.  This seems due to poor (in some cases no) reimbursement from Medicare and Medicaid (M&M).  The topic of Medicare and Medicaid reimbursement is extremely complex so I will provide a very basic example of what poor reimbursement can look like.  

A patient receives a medication in the emergency room that costs $1.00 for the pharmacy to procure. The medication will be marked up to $3.00 to contain all overhead costs related to it being administered.  Now, Medicare or Medicaid comes in and only pays $0.50 for the medication.  Not only does the reimbursement not pay for the hospital to buy the medication, but none of the overhead costs are paid.  I cannot walk into the grocery store and pay for a gallon of milk that cost the grocer $1.00 and is marked up to $4.00 for only a penny!  Why? The obvious answer is because the grocer could not remain in business if they are not paid what they need to cover the costs of selling the gallon of milk.

The lack of reimbursement in hospitals does not apply to medications only, it applies to all areas of a healthcare entity. There are other reasons for poor financial performance from hospitals such as bad debts, patients not paying, etc., but a continual concern is poor reimbursement from M&M. This is where 340B folks make a difference.  The program allows the hospital to make the initial purchase of the drug at a discounted price which in turn allows the poor reimbursement to now cover the cost of the drug along with a small portion of overhead costs involved in the administration.

So why does anyone care that a hospital closes when we have so many?  The instant answer is that it creates obstacles to healthcare. We have to remember that for rural communities, the hospital not only serves as a place for inpatient care but also serves as the local clinic for family health and specialty provider services. The loss of a local hospital means our most vulnerable and in a lot of cases, our oldest patients, will have to drive quite a distance to receive even basic healthcare services. On a lighter note, I would not want anyone to get stuck behind my grandpa who drives 15 mph on the highway ON A GOOD DAY when he has to drive 45 minutes (5 hours in his way of driving) to get to the doctor.

340B betters the country and allows communities to have access to healthcare they would not otherwise have. It is important to remain compliant and for hospitals to optimize their 340B programs to continue to save money. I cannot imagine having to rush my wife 45 minutes after she goes into labor to get her to an appropriate facility.  I know because of what I have done working within 340B that my local hospital continues to be able to offer OB services.  My grandpa’s local hospital is able to provide him the services he needs and both of the hospitals’doors are still open.

You have made a difference too.  I encourage you to reflect on what you have done for your community and continue to do as much as you can to help serve our most vulnerable populations and to keep our communities happy and healthy. If you are interested in seeing how some 340B entities use their 340B savings, check out Megan Kussay’s December 2019 blog title ’Tis the Season For Giving at