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"340B Program Participants: It’s Time to Ramp Up Compliance"

Blog - To Be Or Not To 340B

340B covered entities need to revisit and perhaps ramp up their compliance efforts. The director of the Health Resources and Services Administration’s Office of Pharmacy Affairs has been very open in touting the fact that HRSA has invested in program integrity to make sure that manufacturers and covered entities remain compliant and that benefits for the intended beneficiaries of the 340B program are maximized.

To this end, OPA has created a third branch devoted to program performance and integrity. This branch will be focusing on audit activity and educating covered entities and manufacturers about compliance. Part of the education effort will include posting any agreed upon corrective action plans on the OPA website, as a public mea culpa from the audited entity for the edification of all other covered entities.

HRSA expects covered entities to self-report any identified breaches in their compliance obligations. HRSA is also adding some teeth to the compliance effort by adding questions about compliance to the process by which it reviews applications for grants from HRSA.

OPA’s other branches are not to be left behind in this effort. The operations branch will be more proactive in educating 340B stakeholders about compliance. The information systems branch will be investing in more systems and engaging in more analytical activity. Additional auditors are being hired with the goal of doubling the number of audits carried out in FY15.

A large risk area for covered entities is in their relationships with contract pharmacies.

OPA expects entities using contract pharmacies to have policies and procedures in place to prevent diversion and duplicate discounts. Such covered entities are also expected to perform annual audits of their contract pharmacies and can be cited if they are not doing that. Contract pharmacies must carve out Title XIX unless they have made other arrangements with the state Title XIX agency to avoid duplicate discounts on the drugs provided to those patients.

One of the compliance resources available to covered entities is the 340B University. This is a set of specialized programs which have been endorsed by HRSA as providing compliance training aligned with HRSA policies. These are available through Apexus, the prime vendor contractor to HRSA which runs the 340B call center and offers the 340B University programs.

Some of the compliance activities you should consider implementing within your organization are the following:

  • monthly department meetings to discuss 340B requirements with concerned staff:
  • annual review of your 340B policy and procedure manual; and
  • administrative and board of director review and acceptance of your policy and procedure manual.

Great care must be exercised in the annual OPA recertification process verifying the authorizing official and primary contact information. Although this has not happened yet, it is not beyond the realm of possibility that the authorizing official could incur personal risk for any false certifications in that process.

The Apexus website has an integrity report card which covered entities should check out. It can be used to perform a self-assessment. Covered entities should also keep logs of fraud and abuse training and, of course, visit the OIG and HHS exclusion lists monthly.

Paying attention to these things now will pay big dividends when the HRSA auditor comes to visit. In a subsequent post we will describe the critical information relating to a 340B program may need to be produced at the outset of any audit.

In a subsequent post we will describe the critical information relating to a 340B program may need to be produced at the outset of any audit.

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