June 19, 2014—The Health Resources and Services Administration has begun offering more details about how it is bolstering 340B program oversight with the extra $6 million Congress gave it for the drug discount program this fiscal year. [ms-protect-content id=”2799″]
HRSA has audited more than 200 covered entities during the past three years and, with the additional funding from Congress, it “should be able to double the number of audits we’re conducting,” HRSA’s Office of Pharmacy Affairs Director Cmdr. Krista Pedley said at a June 10 drug industry sponsored meeting on 340B.
At that meeting and in an item in the 340B Prime Vendor’s June newsletter, OPA gave a step-by-step breakdown of what happens after HRSA completes the onsite portion of a covered entity audit. In what appears to be a new requirement, OPA is now specifying that whenever HRSA requires a covered entity to submit a corrective action plan, the entity will have to “provide HRSA with a public letter (to be posted on the HRSA website) that outlines the diversion and/or duplicate discount findings, states that repayment may be necessary, and provides a contact person for questions.”
“HRSA closes the audit once the entity attests that all repayment is resolved (if necessary) and that the [corrective action plan] has been fully implemented,” the newsletter item stated. “Entities that had to make repayments are subject to an audit after a year. If an entity fails to submit a [corrective action plan], it may be removed from the 340B program.”
At the June 10 meeting and in a recent post on its website, OPA also said that, in response to stakeholder feedback, it will revamp the 340B frequently asked questions on the 340B Prime Vendor website. The current FAQs “can be overwhelming for entities to rely on to be sure they are implementing the program in a compliant manner,” Cmdr. Pedley said. “We want to make sure they are developed and seen as a way to help them.”
Another part of the extra $6 million HRSA received for 340B is going toward a two-year contract for a new digitized “compliance management system” for the drug discount program. OPA is holding a conference next week to give preselected vendors its specifications. According to a HRSA spokesperson, “OPA is using a closed vendor list to issue the contract in the interest of getting it awarded quickly.” During the June 10 drug industry meeting, Pedley said her office will use the system to keep “a comprehensive record on every entity and manufacturer that participates” in 340B.
“Whether [an] entity is trying to register a new clinic, whether they just had an audit or just called the [340B Prime Vendor] call center, we’ll know everything about them,” Cmdr. Pedley said. The harvested information, she said, “is going to serve as an early warning” of potential 340B compliance problems. HRSA also might use the information it collects from covered entities to “revisit” the criteria it uses to decide which providers should be audited because they pose a higher risk of noncompliance.
HRSA will also use its additional funding “to hire additional auditors in the field” to audit covered entities and to “partner with the [Department of Health and Human Services Office of Inspector General] to conduct audits of manufacturers,” Cmdr. Pedley said.
The OIG, she said, is currently auditing a drug manufacturer and HRSA has “learned a lot by working with the OIG” on the inquiry. “We’re looking to expand into this area to learn more about pricing discrepancies and the ways in which HRSA can address them,” she said.
HRSA’s additional 340B funding also is going toward “developing an online system for covered entities to verify 340B ceiling prices,” Cmdr. Pedley said. HRSA is also developing a “more automated process” for the Centers for Medicare & Medicaid Services to give HRSA the data it needs to calculate 340B ceiling prices, she said. “Once that system is up and running, we will conduct more routine spot checks of pricing.”
Cmdr. Pedley said HRSA “is moving to finalize” a notice of proposed rulemaking to implement a system of civil monetary penalties for drug manufacturers that intentionally overcharge 340B providers. She said it also “plans to begin developing regulations” to implement a system of civil monetary penalties for covered entities that knowingly and intentionally violate program requirements.
In light of its increased emphasis on compliance, OPA has created a Program Performance and Quality branch to accompany its existing Operations and Information Technology branches. The new unit will focus on covered entity audits, self-disclosures, recertification, and Ryan White Program and community health center site visits, Cmdr. Pedley said. [/ms-protect-content]