HRSA Seeing “Great Trends” in 340B Audits

by Admin | July 19, 2016 3:10 pm

July 19, 2016—Adverse findings in 340B covered entity audits are trending downward this year and the Health Resources and Services Administration is “comfortable” the direction will continue, the head of HRSA’s Office of Pharmacy Affairs said at the largest annual gathering of 340B stakeholders. [1]

OPA Director Capt. Krista Pedley delivered the good news about 340B provider audits during her talk last week at the 340B Coalition summer conference in Washington. The meeting is attended by healthcare providers, the drug industry, government, and pharmacy service providers.

HRSA has audited 585 providers in the 340B program since fiscal year 2012 and plans to conduct another 200 this fiscal year, which ends Sept. 30, Pedley said.

“Since 2012, we have seen a downward trend in database issues and findings related to duplicate discounts, and so far in fiscal 2016 we’re seeing a downward trend in any audit findings at all,” she said. “We believe these trends are likely due to increased educational efforts and a focus on compliance. I’m happy to report we are starting to see some great trends in that space. We are comfortable that we will continue to see these downward trends moving forward as HRSA clarifies some of our policies through new guidance and regulations.”

HRSA has audited just one drug manufacturer for 340B program compliance thus far and is “on target to do five” this fiscal year, Pedley said.

Pedley announced that, starting with the new fiscal year on Oct. 1, OPA will take over “direct management” of 340B audits from HRSA. Although the details are still to be determined, “there should be no change to what an entity sees on the ground,” she said.

In response to an audience question, Pedley clarified that HRSA’s proposed omnibus guidance, also known as the mega-guidance, “is not in play” in audits. HRSA audits providers for compliance with current 340B program policy and guidance only, she said.

Also in response to a question, Pedley said that after HRSA has closed a covered entity audit, currently there is no limit on the length of time a manufacturer can take to request repayment. “Until we have a policy in place, we encourage you to continue to talk to that manufacturer because there is no formal stop period,” she said. “That is the same on the manufacturer side. If a manufacturer owes money to a covered entity, there is no set policy to stop that period of time.”

Pedley also touched on these topics:

Proposed 340B program mega-guidance. “As you can imagine, it really is taking us some time to digest and understand” the 1,200-plus comments” HRSA received on the proposed 340B mega-guidance, she said. “Our expected target date for finalizing the guidance is December.”

Manufacturer civil monetary penalties and ceiling price calculation. HRSA received 70 comments this spring when it reopened the comment period on this proposed regulation for 30 days. That’s double the number HRSA received during the original 60-day comment period last year. HRSA plans to release a final regulation in November.

Mandatory and binding dispute resolution. HRSA expects to publish a notice of proposed rulemaking in September.

Expanded rulemaking authority. Passing a law to give HRSA rulemaking authority over the entire 340B program is “critical” for program oversight and management and for giving participants “the specificity you need,” Pedley said.

Annual recertification of eligibility. The percentage of providers that fail to participate in annual recertification has been cut in half since recertification began in late 2011/early 2012. Pedley attributes the improvement to HRSA and stakeholder educational efforts and HRSA’s enhancements to its 340B covered entity database.

Access to specialty drugs. 340B providers having trouble accessing specialty drugs in limited distribution should let HRSA know and also “talk with the manufacturer about what’s happening,” Pedley said. “We do often find there’s miscommunication.”

Materiality standard for self-disclosure. HRSA still expects providers to apply a materiality standard when deciding whether to self-disclose a potential or actual violation of 340B program requirements, Pedley said. Providers should continue to follow the self-disclosure guidance in HRSA’s September 2014 monthly 340B program update, “which does talk about that materiality threshold,” she said.

Orphan drugs. “It is fine” for rural hospitals to take advantage of discounts on orphan drugs offered voluntarily by manufacturers “outside of the 340B program,” Pedley said. Hospitals should be able to demonstrate to an auditor “that these prices are being offered to you outside of the program.”

Manufacturer information requests. If a provider gets a request for information about its 340B operations from a drug manufacturer and thinks “there’s not enough information there for them to be asking the questions they are,” the provider should “ask for more details – what issue do you have, what are you seeing – and work with them on the problem,” Pedley said. “If you still have concerns, you can work with our office and let us know so we can reach out if good-faith efforts and communication channels are not open,” she continued. “We know this is occurring and we are contacting manufacturers related to this type of issue and we will help entities through this process.”

Source URL: https://340binformed.org/2016/07/hrsa-seeing-great-trends-in-340b-audits/

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