November 5, 2013—The Health Resources and Services Administration (HRSA) has released seven more brief summaries of findings from its audits of 340B covered entities in fiscal year 2012, raising the total to 49 out of 51 audits conducted last year.[ms-protect-content id=”2799″]
HRSA’s Office of Pharmacy Affairs (OPA) posted the reports on its website late in the day on Nov. 4. It had previously released findings from eight of its fiscal 2012 audits in September, 16 in July, and 18 in February. In early September, OPA reported that it was on track to complete 94 covered entity audits during fiscal 2013, which ended on Sept. 30.
The latest audit findings involve five disproportionate share (DSH) hospitals and two community health centers. All seven audits produced adverse findings and corrective actions are still pending. Among the seven audits, OPA found four mistakes in the 340B covered entity database; made seven findings of either isolated or repeat instances of drugs allegedly dispensed to ineligible patients, by ineligible providers, or at ineligible locations; and made five findings of alleged Medicaid billing errors.
OPA’s allegations about Medicaid billing fall into one of into two categories: Covered entities either (a) billed Medicaid for 340B-purchased drugs without submitting claims with a “UD” modifier as their state requires, or (b) billed Medicaid contrary to how the entities indicated they would in OPA’s 340B Medicaid exclusion file. Regarding the latter group, covered entities must tell OPA whether they will use 340B drugs for Medicaid patients (“carve in”) or not (“carve out”). OPA records their decision in the exclusion file. In theory, all states are supposed to use the information in the file to make sure they do not submit claims for Medicaid rebates on drugs that were bought at 340B-discounted prices (a “duplicate discount”). But in practice, many do not because they have developed alternate methods of identifying 340B Medicaid claims.
Thus, an adverse audit finding about an entity’s information in the exclusion file does not necessarily mean that a duplicate discount was paid on a drug. Nor does an adverse finding about a claim submitted without a UD modifier.[/ms-protect-content]