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H H S Department of Health and Human Services
Health Resources and Services Administration
Health Resources and Services Administration

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340B Audit Process

Office of Pharmacy Affairs Update

Compliance remains the top priority for the Office of Pharmacy Affairs (OPA) and the HRSA-administered 340B Drug Pricing Program. Previously, we informed the public of our internal efforts to create a new branch entirely devoted to 340B Program compliance and oversight.    

This update is to inform the public of the different improvements that are taking place within the audit process, our most visible effort in overseeing covered entity compliance. Our goal is to increase the number of audits and make improvements in our processes to make them more efficient and effective.

While notification to the covered entity and audit processes remain relatively unchanged, the steps that take place after the audit has been conducted have undergone several enhancements. The most notable change is that HRSA no longer issues preliminary reports to the audited covered entities. HRSA notifies audited covered entities of the audit findings in the HRSA Final Report.

After HRSA issues the Final Report, the covered entity has 30 calendar days from the date of the HRSA Final Report to review the findings and review HRSA’s request for a Corrective Action Plan (CAP).  If a covered entity agrees with the Final Report, a covered entity must submit a CAP to HRSA within 60 calendar days from the issuance of the Final Report for HRSA’s approval. If a covered entity disagrees with the Final Report, they shall notify HRSA in writing within 30 calendar days with appropriate supporting documentation explaining the covered entity’s disagreement. OPA reviews the covered entity’s response and, if appropriate, may reissue the Final Report if changes are made based on the documentation submitted.

Whether the covered entity agrees with the HRSA Final Report or not, the CAP created by the covered entity must address the findings noted in the official Final Report. If a covered entity fails to submit a CAP, it could be removed from the 340B Program.

Once HRSA reviews and approves the submitted CAP, the covered entity is required to provide HRSA a letter that outlines the findings involving diversion and/or duplicate discounts. The intent of this letter is to notify any affected manufacturers or wholesalers and therefore must state that repayment may be necessary and provide contact information for any questions or inquiries that may arise. This letter is posted on the HRSA website along with the audit findings.

HRSA closes out the audit once the covered entity attests that all repayment is resolved (when applicable) and that the CAP has been fully implemented. Covered entities whose findings involve repayment will be subject to an audit the following year. 

As we increase the number of audits conducted in FY15 and improve the processes, OPA expects to create an even greater sentinel effect – the increased attention to compliance across all participating entities as they become more aware of our oversight and auditing efforts.

07/03/2014