In the past, HRSA utilized its own staff to perform 340B audits. Beginning late last year, HRSA contracted with the Bizzell Group to conduct audits on its behalf. The Bizzell Group staff members have more pharmacy experience than their HRSA predecessors. Many of them have worked in hospitals that participate in the 340B program.

HRSA expectations:

Blue & Co. recently provided on-site assistance for a hospital audited by the Bizzell Group. The three main takeaways from conversations with the auditor involved the hospital’s oversight of the contract pharmacies related specifically to the following:

1. The current guidelines only recommend, not require, hospitals utilize outside 340B expert consulting firms to conduct annual audits. However, the Bizzell Group and HRSA expect annual audits from outside consulting firms.
2. HRSA also expects hospitals to perform quarterly audits as well. These can be performed by internal staff or can be contracted to outside consulting firms.
3. Hospitals that contract with outside 340B consulting firms are perceived to have more compliant programs than ones that do not have assistance from outside firms.

Recent audit focus:

The Bizzell Group auditors focus on the following areas, many of which are similar to prior HRSA audits:

• The practitioner that wrote the prescription is either employed or under contract with the hospital
• The credentialing records are reviewed with more focus on start and stop dates
• The prescription was generated during a service performed in the hospital or in an offsite registered 340B location
• Various schedules from the most recently filed cost report are requested and verified against the OPA website
• Actual copies of prescriptions are requested from the contract pharmacies for all claims being audited
• Fee-for-service Medicaid billing numbers are verified with the data listed on the OPA website and claims are filed in accordance with State billing requirements
• Increased focus directed towards the replenishment process, how the accumulator is working and the relationship to the purchase orders
• Auditors have requested copies of purchase orders and wholesaler invoices, and they have increased scrutiny on the ordering process
• Hospitals have adequate review and oversight of the contract pharmacies and claims processing procedures

It is important to realize that the size of the 340B program does not preclude it from the audit selection process. It appears that the selection process is random and all covered entities, irrelevant of size, have an equal chance of being selected for an HRSA audit. And will be selected at some time.

If you have any questions relating to the 340B audit process or anything related to the 340B Drug Pricing Program, please contact Jason Prokopik at jprokopik@blueandco.com.