340B Compliance Spotlight: The Importance of Self-Audits
by Issie Karan, Legal Counsel

Hemophilia Treatment Centers (HTCs), which participate in the 340B Discount Drug Pricing Program as Covered Entities, must dedicate resources to appropriate oversight of their program. The hallmarks of 340B compliance include strong policies and procedures, processes, internal controls and a leadership team that ensures they are being followed. As part of this, HTCs should incorporate a robust internal auditing component. This article outlines the components of a strong self-audit program and which key personnel should be kept in the loop on its results.

Self-audits can happen at whatever interval makes sense for the HTC. Here are some recommendations: the government does not strictly delineate how frequently covered entities must conduct internal audits. We recommend reviewing 340B policies and procedures, Office of Pharmacy Affairs (OPA) Information System listings, and 340B eligibility at least annually. The recertification process (described above!) can serve as a trigger to initiate these reviews.

For 340B claims, we recommend auditing more frequently. Ideally, these claim audits would occur monthly, using a sampling that will capture any compliance concerns. Apexus 340B Tools recommend 30 claims from each large chain contract pharmacy and 10 from each small, independent pharmacy. If an HTC also utilizes an in-house pharmacy, 30 claims would be appropriate.

Self-audits of claims should begin by ensuring that the covered entity’s records fully demonstrate compliance with prohibitions on diversion and duplicate discounts. As a reminder, the 340B statute requires that covered entities maintain auditable records, which means that HTCs should ensure that their own records incorporate data from third parties relevant to 340B compliance:

• For diversion, HTCs must ensure that all 340B drugs were provided to “eligible patients.” More specifically, the audit of the claim should confirm that the health record documents that the prescription was written at an eligible location by an eligible provider for a service within the scope of the HTC grant. If the claim utilizes virtual replenishment, HTCs should verify the quantity accumulated correctly and that appropriate quantities were purchased for replenishment and received by the contract pharmacy.
• For duplicate discounts, HTCs should confirm that their contract pharmacies do not utilize 340B drugs for fee-for-service claims. If the HTC carves Medicaid claims into its 340B program, the HTC should ensure that this is listed correctly on its Medicaid Exclusion File. For managed Medicaid claims, the HTC should ensure that 340B drugs are billed in accordance with state rules that vary by jurisdiction.

HTCs should engage their leadership on results of self-audits. If self-audits reveal issues of non-compliance, the HTC will need to analyze if a material breach has occurred and whether self-disclosures to the government and/or manufacturers are necessary. Having team members engaged in 340B compliance at multiple levels in the organization helps this process so we encourage HTCs to think about who at their institution needs to have a basic understanding of 340B compliance.

As a starting place, we recommend reviewing Apexus 340B Tools for more details on conducting self-audits. However, the Alliance team is always available to answer questions or concerns.