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    3 Key Compliance Components for 340B Covered Entities

    By Kirsten Onsgard • December 14, 2020

    The word “audit” can make anyone squirm. But for health centers depending 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 termination from the program entirely. 

    The Bizzell Group, which is currently contracted by the Health Resources and Services Administration (HRSA), is responsible for auditing 340B participating healthcare organizations, also known as called covered entities (CEs). Currently, the Bizzell Group audits over 200 CEs per year, so a health center can expect to be audited at least once every seven years.

    Audits exist for two reasons, although both 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. Second, to ensure that 340B pricing is only applied to drugs dispensed to patients who meet 340B Patient Eligibility criteria.


    1.When It Comes to Policies & Procedures, Leave No Room For Interpretation

    HRSA established 340B program requirements as far as 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, your reasoning must be documented in your health center's Policies and Procedures.

    In some cases, your assigned auditor will refer to your Policies & Procedures to determine whether a script is eligible for 340B, especially 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 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.

    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. 

    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


    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 to consulting firms and SAAS providers, is paramount to making sure you are getting the most out of your 340B program. 

    par8o 340B Referral Capture reads referral data from client EHRs to better track continuity of care after a referral is made, which is often the "end-point" of what an EHR alone can manage. Afterward, the service component of 340B Referral Capture comes into play as specialist consult notes are requested, reviewed for compliance, and made available in an online portal. Finally, par8o integrates with the pharmacy TPA to switch prescriptions over to 340B pricing when a prescriptions is approved for 340B pricing per our compliance specialists.

    Taking these steps can help ensure readiness for a HRSA audit, and help protect a CE’s 340B funding. To learn more, register for our webinar: 340B Referral Capture and HRSA Audits, or schedule a meeting to talk to our team today.


    Need help getting started on compliance? Download Our 340B Referral Tracker and Policies & Procedures Templates.

    Download the Referral Tracker & Audit Policies