Developing a 340B Self-Audit Plan

July 2016 - Vol.13 No. 7 - Page #12
Category: 340B Software

Administered by the Health Resources & Services Administration (HRSA), the 340B drug discount program is complex and requires multiple resources to ensure proper utilization. Given the strict rules defining which facilities are allowed to participate in the program, and how eligible facilities must govern their operations, a comprehensive self-audit plan must be in place to ensure all federal requirements are consistently met.

A successful, compliant 340B program is predicated on an adequate training regimen for employees, consistent policies and procedures (P&Ps), and a robust internal (self audit) and external auditing program. The external auditing program should be provided by an agency outside of the health system; various consulting agencies provide these services and possibly the financial external auditor the health system already utilizes. As a Disproportionate Share Hospital (DSH), The Medical University of South Carolina (MUSC) has participated in 340B since the program’s inception in 1992. While this article focuses on developing a comprehensive internal auditing program at MUSC, it must be noted that this is just one element of the overall management of a hospital’s 340B program.

To ensure optimal value to the organization, ongoing effort must be given to maximizing 340B drug discounts within the rules of the program. Thus, a comprehensive self-audit plan should include oversight of an entity’s own pharmacies, mixed-use areas, and any contract pharmacies. A self-audit plan should include a review and analysis from staff members of the internal auditing department as well as the pharmacy department. HRSA expects covered entities to conduct self-audits to fulfill their obligation of compliance, including the requirement to maintain auditable records. However, HRSA leaves it up to the entity to determine how to meet compliance obligations while also expecting all covered entities to self-report any violation of the 340B program along with a plan for correction. The areas most at risk for deviation from program regulations involve recognizing 340B-eligible patients and ensuring purchases match clinical data. As such, audits should include a particular focus on these areas. Consider also that because hospitals are no longer limited to contracting only with a single pharmacy, there has been a rapid expansion in the number of multiple contract pharmacy arrangements. This creates a corresponding need for an audit plan for these pharmacies, as the 340B entity is ultimately responsibility for ensuring the compliance of the contract pharmacies.

Roles and Responsibilities

The success of any self-audit plan is predicated on clearly defined roles and detailed responsibilities. TABLE 1 delineates a sampling of assigned roles for a self-audit team and defines the responsibilities therein. Because each hospital pharmacy department is unique, it is important to assess the existing organizational structure before determining the make-up of a team.

Click here to see TABLE 1.

Integrity Assurance and Audits

Integrity assurance (IA) audits are conducted in each of the eligible outpatient areas on a monthly basis by both the internal audit staff as well as pharmacy department staff. The results of the audits are reported to the director of pharmacy services and the 340B Oversight Committee. Auditing practices require constant updating as improvements are made to the program, additional reports become available, or new interpretations of rules are issued. The audit tests and data requirements included in IA audits are detailed in TABLES 2 AND 3.

It is important to note that each 340B program member needs to establish the appropriate sample size for each of these audits. The sample size must be commensurate with the size of the program, but not so large that it impedes the team’s ability to complete the audit in a timely manner.

Report Recommendations

Regular review of detailed data is required to ensure ongoing compliance. TABLE 4 details the type of data that must be assessed on a periodic basis, including a description of the report and the data source.

Lessons Learned

MUSC Health has participated in the 340B program for almost 25 years. As with any long-term practice, many 340B management practices developed organically over time. But with changing interpretations of rules and increasing complexity in the health care system, the pharmacy department needed to embrace a new approach to 340B management and communicate this evolution to the upper levels of hospital management to garner their support. Adopting a comprehensive 340B self-audit plan was key to this effort. Perhaps unsurprisingly, there was reticence to building an oversight structure for a program that was entrenched and thought of as stable. Making this change required convincing our internal medical center auditors to become involved with the program and training them to conduct ongoing assessments of the program.

Over the past several years, MUSC Health has leveraged the myriad resources available to 340B stakeholders to develop a strong 340B program infrastructure. Many of our practices are based on recommendations not only from the HRSA Office of Pharmacy Affairs, Apexus, and other 340B-based agencies, but also from our colleagues at other hospitals. Creating and maintaining an information-sharing network specific to 340B practices has been vital to the development and growth of our program. Moving forward, we expect to continue to identify data elements that require further examination. The MUSC Health 340B program audit structure—like any effective 340B audit program—is designed to continuously change in response to ongoing challenges.

Heather Easterling, PharmD, MBA, is the director of pharmacy services at MUSC Health in Charleston, South Carolina. She also serves as the clinical associate dean of medical center affairs for the South Carolina College of Pharmacy. Heather earned her Doctorate of Pharmacy from the Medical University of South Carolina College of Pharmacy and her Master of Business Administration from The Citadel Graduate College. She has also completed a 24-month pharmacy practice management residency at MUSC. Heather’s main area of interest is in promoting the profession through expansion of clinical pharmacy services in health systems. She works closely with other healthcare leaders to promote medication safety through robust pharmacy services.

Jason Mills, PharmD, MBA is the pharmacy supply chain manager for MUSC. He received his Doctor of Pharmacy degree from the Ohio State University College of Pharmacy and his Master of Business Administration degree from the Citadel Graduate College. Jason has held a variety of clinical pharmacy and supervisory roles at MUSC and his current role is managing the entity’s 340B program, controlled substances distribution and regulatory compliance, drug supply chain security act compliance, and repackaging.

Natassia S. Allen, MBA, CPhT, is an internal auditor for the 340B program at MUSC. She received her MBA with a concentration in healthcare administration at South University in Savannah, Georgia. She has over 8 years’ experience as a nationally certified pharmacy technician.


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