A 340B Audit: Good News for Us
Tuesday, June 12, 2012
Posted by: Joy Ingram
Douglas Deans, PharmD, Pharmacy Services Manager, CHC of Snohomish County
Most organizations anticipate an audit with trepidation. In January 2012 I was contacted by HRSA regarding an upcoming audit. These audits of 340B entities were started in late 2011, and our CHC pharmacies ended up being the first audit west of Texas. The audits are conducted by HRSA at the urging of the GAO. Believe it or not, the audit was actually a valuable and rewarding experience. My purpose today is to help you look forward to your pharmacy’s 340B audit!
CHC of Snohomish County includes four ambulatory care clinics with three CHC-owned dispensing pharmacies and one contracted pharmacy. HRSA sent its “Program Integrity Unit” from the Region X office to review our pharmacy on seven points. They wanted first to determine our eligibility: Could they find us on the Office of Pharmacy Affairs (OPA) web site, and was our information up to date? The auditors also wished to evaluate our procurement process: Do we have a valid contract with a drug wholesaler? What process is used to add drugs to our inventory? Is there one inventory or two? And they were interested in our inventory procedures – how we list items, store products, track drugs from order through filled prescription, and develop a clear record of eligible patients and the prescriptions written for them by contracted prescribers.
The regional HRSA staff also was interested in how we dispense or distribute pharmaceuticals, of course. Some 340B entities simply replenish or “make good” pharmacies’ inventories. The reviewer asked for an electronic file of all 340B prescriptions filled over the past six months. Then a certain number of them were reviewed at random. The patient of record was then reviewed: Is this actually a patient in this facility? The reviewer also looked at the prescriber to determine his or her connection to the facility. The team verified the actual acquisition cost (AAC) for the dispensed drug. Finally they reviewed the signature file to verify we kept a signature when a prescription was picked up.
The audit also reviewed contracts with pharmacies, looking for 13 elements, as specified by OPA, which should be in each contract. It seems the reviewers’ biggest concerns involved the steps we have in place to prevent drug diversion and to ensure no double discounts were being applied. Finally the auditors reviewed our organizational 340B policies and procedures.
Prior to the onsite visit, I had been asked to email specific records, allowing the audit team to be well prepared when they arrived. Three of us sat down at computers and accessed our electronic health record (we use NextGen) together. They carefully reviewed 32 prescriptions as their primary data set and looked at another five that were high-dollar drugs. Of the primary 32, four were Medicaid patients. The reviewers wanted to ensure that each patient was in our medical record and had been seen in the clinic in the past 18 months.
The HRSA auditors then did an onsite review of how one of our pharmacies handled the procurement, inventory and dispensation of prescriptions. The team then visited the contract pharmacy to review the same procedures. When finished, the reviewer announced he would send his report to OPA and, within 90 days, we would see the report, allowing us to review our practices and move closer to “best practices.”
The audit took only two days and was more educational than punitive, allowing our organization to improve its practices. We learned that our information on the HRSA website had not been updated to reflect changes in personnel and other important developments. We gained insight into how the GAO perceives that the 340B system, a valuable federal program, could be improperly used for financial gain. Our policies and procedures are now being revised to reflect ways to protect against diversion or “double-dipping.” For CHC of Snohomish County, this was a valuable learning experience that will only make us better.
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