The 340B Program helps eligible healthcare organizations like community health centers, children’s hospitals, critical access hospitals, rural referral centers, and public disproportionate share hospitals. According to the Government Accountability Office (GAO), about 40% of hospitals in the United States take part in the program, showing it is widely used. Covered entities must recertify their eligibility every year and follow strict rules to stay in the program.
Key compliance rules include stopping drug diversion, which means giving discounted drugs only to eligible patients. They also must avoid duplicate discounts with Medicaid rebates and keep exact records of drug purchases and billing. These rules make sure the program is used properly and that discounted prices help the right providers.
Compliance is hard because it involves managing a lot of drug transaction records, keeping clear documentation, and checking billing patterns often. Mistakes can happen in billing software, buying patterns, or data transfers, leading to problems. When these happen, they need quick correction.
A Corrective Action Plan (CAP) is a written plan created when audits or reviews find problems. If an audit finds mistakes like wrong drug counts or duplicate discounts, covered entities must make a CAP. This plan explains how they will fix the problems and stop them from happening again.
The Health Resources and Services Administration (HRSA) oversees the 340B Program. They require CAPs to include:
HRSA expects the CAP to be finished, including any repayments, within six months after the problem is found.
Corrective Action Plans help covered entities in several ways:
Shamroz Sultan, a 340B ACE and Education Program Manager at Apexus, says that teamwork between pharmacy, finance, and compliance teams is very important to create a good CAP that answers audit questions.
Audits are a big part of keeping the 340B program working right. They can be internal, done by the covered entity itself to catch problems early, or external, done by HRSA or drug manufacturers to check if rules are followed.
Internal audits help organizations find problems before official audits happen. They:
Nathan Perumal, Vice President of Risk Management at ComplianceBridge, points out that internal audits show steady monitoring. His organization makes software that helps entities do these reviews well.
External audits by HRSA or manufacturers look at drug transaction samples, billing, and patient eligibility. These audits have become more common and complex in recent years. Covered entities must quickly fix problems found and talk about repayments if needed.
HRSA now encourages electronic submissions to make audits easier and faster. If violations occur, covered entities must tell the drug manufacturers and work on repayments.
HRSA also posts summaries of violations and contact info publicly, so entities do not have to send out violation letters themselves.
Following 340B rules needs constant work and resources. Common challenges are:
Apexus offers a Covered Entity Refund Service (CRS). It helps covered entities manage repayments by giving access to manufacturer contacts, historical drug prices, and standard communication templates.
Technology like Artificial Intelligence (AI) and automation is becoming important in making 340B compliance easier to handle.
AI systems can review large amounts of data to find errors faster than people. They spot unusual patterns like wrong billing or duplicate discounts. This helps find issues early before they cause bigger problems.
Software such as ComplianceBridge can automate audit tasks. It sends out audit questions, tracks who is responsible, checks answers, and keeps records. This saves time and reduces mistakes.
Automation tools help create and manage Corrective Action Plans. They assign tasks, set deadlines, and send reminders. This keeps everything on schedule, especially to meet HRSA’s six-month deadline. Technology also stores drug manufacturer contacts and communication templates for faster repayments.
Technology supports ongoing compliance efforts and helps covered entities meet stricter audit rules.
Medical practice managers, healthcare owners, and IT staff in the U.S. should consider strong internal audits, good Corrective Action Plans, and technology tools to support 340B compliance efficiently.
By focusing on these steps, covered entities can better prepare for audits, reduce risk of financial penalties, and continue serving their patients with the help of the 340B Drug Pricing Program.
The first step is discovering 340B program noncompliance, which can be detected through self-audits, HRSA audits, manufacturer inquiries, or regular operations. Common methods include monitoring split-billing software settings, electronic health record charge capturing, and purchase history ratios.
Covered entities should evaluate the compliance issue to determine if self-disclosure to HRSA is warranted, based on their material breach threshold which can be defined by purchase amounts, inventory percentages, or audit samples.
A self-disclosure letter should include the covered entity’s 340B ID, a description of the noncompliance, the issue’s scope, a corrective action plan (CAP), strategy to inform affected parties, and a financial remedy plan if repayments are owed.
A CAP is necessary to address findings from HRSA audits or self-disclosed issues. It should outline actions taken or planned to address the findings and prevent future noncompliance, involving key stakeholders from the covered entity.
Covered entities should reach out to manufacturers in good faith, disclose the compliance issue, offer repayment, and provide details such as impacted NDCs and corrective action plans.
Remedies include repaying manufacturers directly or using a credit/rebill process through wholesalers, adjusting accounts for over-purchasing or violations, which must be transparent and agreed upon.
HRSA expects that CAPs, including manufacturer repayments, be resolved within six months of self-disclosure, necessitating diligent follow-up and reporting to ensure successful closure.
Challenges include difficulty accessing historical drug pricing information, finding manufacturer contacts for refunds, lack of a defined process for refunds, and limited personnel resources for 340B management.
Apexus CRS streamlines the refund process, ensures accuracy, and offers access to expert knowledge, a comprehensive manufacturer contact database, and standardized communication templates for efficient resolution.
Covered entities can visit Apexus.com/CRS or contact CoveredEntityRefunds@Apexus.com for more information regarding the services offered to assist with 340B compliance issues.
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