hrsa audits what you need to prepare for 2016-06-01-final

2016 IPHCA Leadership Conference 1

HRSA 340B Audits- What You Need Consider and How to Prepare

Illinois Primary Health Care AssociationOctober 6, 2016

Steve Zielinski RPh340B Healthcare Associates [email protected]

Disclaimer• This presentation is not legal opinion and 340B

Healthcare Associates LLC assumes no responsibility for the decisions and approach as it relates to the implementation, interpretation and/or compliance requirements promulgated by the Centers for Medicare and Medicaid Services (CMS), the Health Resources and Services Administration (HRSA) and the Office of Pharmacy Affairs

• The opinions expressed in this presentation and on the following slides are solely those of the presenter


Agenda• Overview of 340B Audit Process

• Key HRSA Audit Findings

• HRSA Audit Preparation

• Manufacturer Audit

• Key Takeaways


Audit Overview• 340B Audits

• HRSA• Manufacturer

• HRSA Audits - Randomized• Number of Child sites• Number of Contract Pharmacy arrangements• Drug purchase volume

• HRSA Audits - Targeted• Allegations of violations


HRSA Audit Overview


• Initiated by engagement letter from OPA• Introductory Conference call and request for

data/documents• Onsite conference with key management staff• Audit performed by HRSA Regional Office auditors

following Government Auditing Standards• Results provided by HRSA within 60 days identifying

any violations (findings) • Findings can be refuted within 30 days or a

corrective action plan (CAP) must be submitted within 60 days for OPA approval

Key Findings


• Database Inaccuracies• Diversion• Duplicate Discount • Contract Pharmacy

Key Findings – OPA Database• Database Inaccuracies

• Incorrect Authorizing Official and/or contact information• Inaccurate Grant number• Incorrect facility name and/or address• Child site not operational• Child site not registered

• Must be listed in the Electronic Handbook (EHB) and operational


Questions to ask of your Organization

• Program Integrity• Do you coordinate 340B site registrations with expansion

grant notice of awards?• How often prior to recertification do you review and update

OPA database information?• How do you select and engage an external audit firm


Key Findings - Diversion• Diversion

• Ineligible provider (ex. Undocumented referrals)• Incomplete health record documentation (ex. Visit and/or

drug not charted)• Service outside of project scope/grant• 340B drug dispensed for prescription written at ineligible

site• Lack of auditable records

• 340B Purchases = 340B Dispenses• Office administered 340B drugs not recorded in log books• Documentation of Internal Monitoring


Applying Patient Definition


RX 340BDrug


• Diversion• How do we compile our provider lists?• How often are the provider lists updated?• How do we handle residents, locum tenens, volunteers?• How do we address moonlighting providers?• How do we address providers moving between eligible

and ineligible sites?• How are referrals defined in Policy/Procedures?


Referrals & “Responsibility of Care”

• Policy and Procedures need to define entity’s 340B referral position and is current with SOP

• Specialist prescriptions• Documentation of outgoing referral and incoming notes

• Hospital prescriptions (discharge, ED)• Do you have responsibility of care?• Does your SOP require the patient’s primary care

provider to review and sign/stamp for inclusion in health record prior to filling prescriptions?


Key Findings – Duplicate Discount

• Duplicate Discount• Inaccurate Medicaid Exclusion File listing

• “Yes” box not checked for carve-in status• Incorrect NPI/Medicaid billing number (include both)• Missing NPI/ Medicaid billing number

• FQHC’s on state borders• In-house retail pharmacy NPI

• 340B drugs dispensed to Medicaid patients by contract pharmacy, absent arrangement to prevent duplicate discount


HRSA, CMS & State 340B Policy



• Duplicate Discount• Is the Medicaid Exclusion File accurate?• Do you have written policies and procedures pertaining

to the prevention of duplicate discounts?• Are all NPI’s and Medicaid provider numbers for ALL

States in which Medicaid is billed listed?• Have you contacted your State Medicaid Agency to

ensure you understand state requirements?• Have you got a policy dealing with dual eligible?• Have you got a policy dealing with Medicaid Pending?


Key Findings – Contract Pharmacy• Registered but without a fully executed contract• Registered without a contract• Dispensing without a contract (physical inventory)• Pharmacy locations on OPA database not listed in

contract/addendum• Ineligible patients receiving prescriptions• Ineligible providers • Ineligible location for prescription origination• Entity did not provide contract pharmacy oversight



• Contract Pharmacy• Is your OPA database listing up to date and accurate?• Are all Contract Pharmacy Agreements accessible and

FULLY EXECUTED listing all pharmacies?• Have you contacted your State Medicaid Agency to

ensure you understand state requirements?• Have you got a policy dealing with dual eligible?• Have you got a policy dealing with Medicaid Pending

prescriptions?• Are you performing internal audits of pharmacy and

contract pharmacy for Medicaid Prescriptions?


Data Elements for Testing• Diversion Prevention

• Patient Information• Provider Information• Date/location of service• Diagnosis Code• Written and fill dates of prescription

• Duplicate Discount Prevention• BIN/PCN• Payer information

• Inventory Management• Quantity dispensed• NDC


Sample Monthly Audit Template


Strategies: Prescription Self-Audits• Description of internal audit process to be in Policy

and Procedures• Audit a number/percentage of prescriptions based

on volume• Audit each contract pharmacy individually• Clearly outline how incorrect claims are addressed

(ex. reversed by pharmacy and TPA)• Policy and Procedures to describe position on

“material breach”


Preparation for an Audit• Auditable Records Availability

• Data Repository• Comprehensive Policy and Procedures

• Internal Audit Protocols Purchases and Dispenses• Contract Pharmacy• Self-reporting Processes• Schedule of internal and external reviews

• Review and update of OPA database• Sites within scope of grant• Authorizing official and contact person• Address changes to sites or pharmacies


Manufacturer Audit• Entities should work with manufacturers in “good

faith” through an informal dispute resolution process

• HRSA guidance requires approval before conducting an audit

• OPA approved audit work plan; third party auditing firm• Self-reporting Processes

• Manufacturer should provide specific claims detail for evaluation

• Seek legal counsel in reviewing data request prior to submission as a part of this “good faith evaluation”


Operational Site Visits (OSV)Community Health Centers preparing for HRSA Operational Site Visits (OSVs) to verify their compliance with the 19 Health Center Program requirements should be aware that those visits now include five questions on the 340B Drug Discount Program. OSV reviewers are to ask the following but are not expected to review 340B documents/policies or patient records. The questions are: 1. Does the health center participate in the 340B drug pricing program? (if NO, the remaining questions are not required) 2. Does the health center have written 340B policies, procedures, or other related documents? (if NO, proceed to question 4)


Operational Site Visits (OSV)3. If YES to #2, do the policies, procedures or other related documents address the following areas to assure that the individuals provided access to 340B drugs purchased by the health center meet all of the following? a) The health center has an established relationship with the individual, as documented by the health center maintaining records of the individual's health care; b) The individual receives health care services from a health care professional who is either employed by the health center or under contractual or other arrangements (e.g. referral for consultation) such that responsibility for care provided remains with the health centers; i.e. 340B prescriptions are only made available to those who receive services that are either provided directly by the health center (Form 5A Column I or II) and/or through formal written referral arrangements (Form 5A Column III) consistent with approved scope of project; and


Operational Site Visits (OSV)4. If the health center uses contract pharmacies, do they have appropriate contracts in place with clauses to prohibit duplicate discounts and diversion?

5. Does the health center attest that it provides oversight (e.g. annual audit or other mechanism) of the 340B drugs dispensed by the contract pharmacy? While the OSV reviewers are simply to ask the question and record the responses, responses could potentially trigger a 340B audit. A comprehensive Community Health Center 340B Policy & Procedure Manual can be found online on the 340B University Tool Guide site.


Resources• Apexus FAQs and Self Audit Templates

(www.apexus.com/solutions/education/pvp-education/340b-tools)

• NACHC 340B Manual (www.mylearning.nachc.com/diweb/catalog/item/id/954911)

• Peer to Peer Webinars (www.hrsa.gov/opa/peertopeer/webinars)

• Self Audit Compliance Guide• www.hrsa.gov/opa/peertopeer/webinars)• 340B University & 340B University on Demand

(www.apexus.com/solutions/education/pvp-education/340b-u-ondemand)


Thank You?
