HRSA Audit Highlights

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HRSA Audit Highlights

We have been busy supporting our wonderful clients on HRSA 340B audits almost constantly throughout the year, but in the recent months we have seen some changes. Here is a quick update on things we have seen that may catch you off guard if you’re not prepared.

First, whether you are carve-in or carve-out, you will very likely be asked to provide UB04/HCFA 1500 billing claim forms for all 28-33 sampled claims. Additionally, you will be asked to provide UB04 claim forms for all out-of-state Medicaid plans you have billed and to do this, the auditor will go outside of the audit period, as far back as necessary to complete the request.
Second, for DSH entities, auditors are really scrutinizing your Non-Covered Outpatient Drug (NCOD) lists. They will search your purchasing history to verify no item on that list has been purchased on 340B. They will also be reviewing your hospital utilization data to verify no NCODs are in that data and accumulating to 340B. Furthermore, they will likely ask you to download your list of excluded drugs, (e.g., your black list if Sentinel or your 340B eligibility and GPO exclusion exempt lists if Macro Helix). They want to know, even to the NDC level, what drugs you have blocked from accumulating.

Third, for entities that are not government owned, you will need to show a contract or memorandum of understanding (MOU) with the state or local government saying you agree to provide care regardless of a patient’s ability to pay. There are many sites who currently only have an attestation that a contract exists, but the contract has been lost in the years since a site’s 340B registration with HRSA. Auditors are wanting to see the contract or MOU, not the attestation. We recommend locating this document and keeping it in a readily retrievable format for a HRSA auditor to view (see March 2019 OPA Update).
Fourth, with respect to clinics and 340B clean sites, auditors have been focused on auditable records for purchases. Meaning, if you purchase a drug on 340B it needs to be in your utilization data – you need to show justified usage. Additionally, your purchases should reasonably match your utilization. If you have purchased 40 vials, you should have used roughly 40 vials.

Overall, the auditors are proving firm but fair. They are getting more detailed, but I think we all expected that knowing Bizzell auditors have pharmacy backgrounds and have managed their own programs. There is still significant inter-auditor variability, but you never know who you will get. The key takeaway is that there is no substitute for preparation. Verify the existence of all required documents and keep them stored in a readily retrievable format, have an already established process in place to pull requested UB04/HCFA 1500 billing claim forms and maintain your NCOD lists regularly. And always know, we are here for you to answer any questions or help however we can!


About Author

Roxie Nevarez

Experience as a pharmacy technician for 9 years, 4 of which have been spent in the "dark trenches" of 340B. Roxie’s background includes front line healthcare, pharmacy database management, as well as 340B corporate compliance within a 22 hospital system. She loves the 340B program and is very passionate about compliance. Roxie is part of our independent 340B auditing team and provides data expertise. Her perspective, like Jen, is compliance and data management.

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