Health Systems

Mastering the 340B Compliance Challenge


340B Compliance: A Brief History

For almost 23 years, the federally mandated 340B drug discount program has required drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at substantially reduced prices. These discounts have allowed safety net providers to stretch federal resources as far as possible, which has in turn enabled them to expand the type and volume of care they provide to the most vulnerable patient populations.

Prior to 2011, 340B oversight was lax, with Health Resources and Services Administration (HRSA) regulators relying mainly on program participants to self-police. However, key reports issued that year from the General Accountability Office (GAO) and the Office of the Inspector General (OIG) discovered myriad compliance failures, including limited transparency, a lack of consistency in coverage and weak eligibility supervision. These results were the precipitating factor that ushered in a new era of increased oversight by HRSA and led to much stricter compliance requirements and a systematic approach to auditing covered entities. Compliance is now a fact of life for every covered institution as the number of audits continues to multiply each year.

Essential Strategies for Meeting 340B Compliance Requirements

More than 230 audits were conducted over the past three fiscal years and twice that many are planned for 2015 and 2016. And, as the auditing process has become more sophisticated, the chance of finding discrepancies has increased substantially. The early learning curve for auditors is officially over. Here are a few essential strategies that covered entities can focus on immediately:

Establish a 340B compliance team. If you don't already have a 340B team in place, it's time to form one. 340B program compliance is a group effort. Develop a group of employees to get involved and understand the program. Team members should include representatives from the pharmacy department, compliance, information technology and accounting at a minimum. A dedicated compliance team can become a valuable on-site information resource that monitors program requirements and assists with staff training, another key to successful internal oversight. The team should establish written and documented 340B compliance procedures that are regularly updated and distributed to staff. These procedures can be designed as a tool to meet compliance requirements and should be factored into daily practices and workflow processes so they are easy to implement and follow.

Conduct routine self-auditing. Eventually, every covered entity in the 340B program will be audited, so having a hands-on understanding of audit requirements is a critical necessity. Regular internal audits can detect any non-compliance issues, and corrective procedures can be put in place to prevent them from recurring again. And, remember, it's a requirement to self-report any non-compliance issues discovered during an internal audit to HRSA.

Take ownership of contract pharmacy relationships. A covered entity's 340B compliance oversight extends to contract pharmacy arrangements so internal processes need to be put into place to facilitate this, including conducting internal contract pharmacy audits on a regular basis. All contract pharmacy stakeholders should be vigilant about compliance measures as this relationship continues to face intensive scrutiny.

Stay flexible and agile in the face of change. Last year's much-anticipated "mega-reg" ruling, which would have provided clarification to a number of key aspects of 340B, including patient eligibility and contract pharmacy arrangements, was abandoned amid questions concerning HRSA's rule-making authority. As mega-reg dissolved, HRSA promised to forge ahead and issue guidance in areas where they do have authority in order to "address key policy issues raised by various stakeholders committed to the integrity of the 340B program."1 This proposed guidance should occur this year. Also this year, the agency plans to issue rulings related to civil monetary penalties for manufacturers, methods for calculating 340B ceiling prices and procedures for resolving administrative disputes. As policy issues continue to evolve, being able to quickly adapt to new compliance requirements is the only way to successfully navigate your way through the 340B regulatory environment.

Helpful resources are available

AmerisourceBergen continues to work to keep our hospital, manufacturer and pharmacy communities up to date on the complicated regulatory landscape of the 340B program. Apexus, the 340B prime vendor, is also an important source for practical information and in-depth educational programs for program participants and stakeholders.

1 Heller, S. (2014, November 21). HRSA withdraws 340B proposed 'mega-reg'Health Policy Weekly.



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