Three Steps to Prepare for a 340B Integrity Audit

The Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs has been instructed by the Government Accountability Office to conduct both random and targeted audits within the 340B Drug Pricing Program. Often referred to as a 340B integrity audit, these reviews are conducted to provide additional program oversight, monitor for program violations and prevent diversion and duplicate discounts. The HRSA has already begun to conduct the integrity audits, with the initial random audits targeting covered entities with potentially higher program risk due to their volume of drug purchases, the level of program administration complexity and their use of contract pharmacies.

As the HRSA continues to conduct targeted audits, hospitals and health systems contemplate what the audit could mean for them. Below are three key steps hospitals and healthcare providers can take to prepare for a 340B Drug Pricing Program integrity audit.

1. Review Materials Targeted by the Audit: The 340B integrity audits are focused on the following:
   • A review of policies and procedures specific to 340B program operations
   • Examination of relevant auditable records
   • Evidence of system compliance that specifically prevents drug diversion and duplicate discounts for pharmaceuticals administered to patients who
     qualify for Medicaid
   • Evidence of compliance with the required group purchasing exclusion for covered entities

   Review of these four areas will help to evaluate the overall audit preparedness for a hospital or health system and could identify additional areas for further, more intensive review.

2. Create and Implement Medication Billing-Related Policies: Demonstrating compliance with the federal monitoring and maintenance requirements begins with review of a provider’s policies and procedures related to medication billing. Specifically these policies and procedures should demonstrate how the covered entity will bill 340B drugs in accordance with state law and how the entity will validate that its billing system is effective and accurate.
3. Assign a Multidisciplinary Team for Oversight: Hospitals and health systems should assign a multidisciplinary team to meet monthly or bimonthly to review the organization’s program operations and compare against 340B program standards and opinion letters. Pharmacy, administration, legal and governmental affairs are some areas that should have representatives on the oversight team.

Overall, hospitals and health systems should prepare for a 340B integrity audit by ensuring before an audit takes place that individual practices and procedures are in compliance with program standards. For more information about steps to take in preparing for an integrity audit, please contact one of the authors.