February 6, 2014—Contract pharmacies “can enable 340B covered entities to expand the type and volume of care they provide to vulnerable patient populations,” the director of the Health Resources and Services Administration (HRSA) Office of Pharmacy (OPA) said today in a public statement, but audits have shown that entities’ oversight of contract pharmacies “did not always meet expectations outlined in 340B program guidance.”[ms-protect-content id=”2799”]
Writing in response to yesterday’s Department of Health and Human Services Office of Inspector General (OIG) report on covered entity oversight of contract pharmacies, OPA Director Cmdr. Krista Pedley said “we have renewed our focus on program integrity in the area of contract pharmacy arrangements” and she reminded entities that use contract pharmacies that “vigilant oversight is critical.”
“If HRSA finds a covered entity providing no oversight of its contract pharmacy arrangement, this is a violation of program requirements and HRSA will no longer permit the participation of that contract pharmacy arrangement,” she said.
In addition, Pedley said that entities “are required to maintain auditable records and are expected to conduct annual audits of contract pharmacies that are performed by an independent auditor.”
Soon after issuing her statement, Pedley addressed the 340B Coalition conference in San Diego via a video feed. In response to a question, she clarified that HRSA expects but does not require an independent audit. The Monitor will report separately about her remarks shortly.
In her statement, Pedley said that, under HRSA’s 2010 contract pharmacy guidelines, “contract pharmacies must carve-out Medicaid (i.e., not use 340B drugs for Medicaid patients), unless the covered entity otherwise has an arrangement with the state Medicaid agency to prevent duplicate discounts.”
“The covered entity must report such arrangements to HRSA,” she continued. “Covered entities found carving-in Medicaid at their contract pharmacies will be cited in an audit.”
Responding to a question from a conference attendee in San Diego, Pedley confirmed that the carve-out prohibition applies only to Medicaid fee-for-service drugs dispensed in contract pharmacies. HRSA does not have a policy addressing Medicaid managed care.[/ms-protect-content]