2020 was a challenging year for the healthcare industry, particularly Federally Qualified Health Centers (FQHCs). As frontline healthcare providers serving some of the nation’s most vulnerable patient populations, the COVID-19 pandemic required FQHCs to do more than ever with limited financial resources. 340B savings became even more critical for Section 330 grantees and FQHC Look-Alikes, even as the 340B program itself faced growing scrutiny and pressure that has continued into 2021.
As we approach the back half of 2021, the 340B program continues to face more changes—from potential federal and state legislative actions, to the future unknown outcomes of several court cases and additional industry initiatives.
The more 340B changes, the more it stays the same
Though the future of the 340B program is in flux, one constant is the Health Resources and Services Administration’s (HRSA) focus on 340B compliance, as it continues to audit nearly 200 covered entities each year. HRSA has adapted its audits to the pandemic environment—offering two remote options—but the stakes of these audits remain high. Findings can lead to repayment obligations or, in the most severe cases, loss of 340B eligibility.
Here’s a look at some of the most common HRSA findings, along with some best practices to help your entity avoid these errors:
1. Duplicate discounts—HRSA issued fewer findings of potential Medicaid fee-for-service duplicate discounts in 2020, however, inaccurate Medicaid Exclusion File findings were flat to slightly up. HRSA recently deployed new tools to the Office of Pharmacy Affairs (OPAIS) to allow more granular listing of Medicaid practices and billing numbers. 340B covered entities will want to ensure that they list all Medicaid information correctly across their various service settings.
2. Price diversion— HRSA audit findings regarding the use of 340B medications for patients that don’t meet the 340B patient definition have declined steeply over the past few years. This is encouraging and suggests improved compliance, but it may also reflect altered enforcement standards.
3. Incorrect OPAIS record—While also down year-over-year, this finding remained relatively common. 340B covered entities should regularly validate the accuracy of all information to the OPAIS, particularly if there have been recent changes in names, addresses, primary contacts, etc. are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
What to expect from HRSA
While the overall trend toward fewer findings is positive for 340B covered entities, we’ve seen signs of increasing focus from HRSA’s 340B auditors, including details of staff credentialing/relationships to covered entity, confirmation that the content of the 340B Policy and Procedure manual is being followed in practice, paper prescriptions filled at contract pharmacies and NDC matching between dispense and purchase in replenishment inventory models.
340B covered entities may be also advised to watch for changes with a new presidential administration. Early executive orders and statements from Biden administration appointees point to the strong possibility of another shift in 340B oversight standards; one that puts more weight behind enforcement of agency guidance and not just the statutory language.
Safeguard your 340B program
To succeed in this shifting landscape, 340B covered entities should remain focused on compliance, explore alternative operating models, and work closely with a range of partners to remain informed about what is happening with the program at all levels.
Unsure where to start? Cardinal Health can help. Our 340B consultation program offers a range of 340B consulting services, from program analysis and implementation support, to mock audits and more. For more information on Cardinal Health™ 340B consulting services, click here.
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