matt atkins updated presentation · ndc matching dispense patient record always start with the...

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340B Program: HRSA Audit Findings Update

Matt Atkins, CPA, CIA, 340B ACE

Manager

About Draffin Tucker

• Founded in 1948

• Regional CPA firm with national presence

• Approximately 80% of our Firm is dedicated to the healthcare industry

• Health center industry practice is led by Wes Sternenberg, who also serves as Finance Chair for the largest health center in Georgia

Iowa Primary Care Association | Annual Conference2

1. Legislative update

2. Review of HRSA audits to date

3. HRSA audit on-site process

4. Self-audits & common missteps

5. Opportunities to enhance compliance without sacrificing savings

Agenda


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• Provides substantial savings to certain hospitals and other covered entities on purchases of covered outpatient drugs

• Compliance requirements are complex and often grey areas

• Increasing scrutiny from government officials, HRSA, drug manufacturers, and the public

340B Program


• Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement

• Released June 2018

• The report states “HRSA’s audit process does not adequately identify compliance issues, nor does it ensure that identified issues are corrected.”

• GAO concluded that HRSA does not have reasonable assurance that covered entities have adequately identified and addressed noncompliance with 340B Program requirements.

GAO Report


1. Require CEs to register contract pharmacies for each site

2. HRSA should issue guidance on prevention of duplicate discounts for Medicaid managed care

3. HRSA audits should assess compliance with duplicate discounts for Medicaid managed care

4. HRSA should issue guidance on length of time for look back to identify full scope of noncompliance identified during audit

GAO Report – Recommendations


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5. CEs should specify methodology for identifying full scope of noncompliance

6. HRSA should require CEs provide proof their CAPs have been fully implemented

7. HRSA should provide more specific guidance regarding contract pharmacy oversight, including scope and frequency of such oversight

GAO Report – Recommendations (continued)


• The GAO appears to be working on a new report related to the 340B Program

New GAO Study?


• OPA Publishes updates periodically

• May 2018 – Audit Findings and CAPs

• June 2018 – Resolving Contract Pharmacy Related Non-Compliance

• July 2018 – 340B Registration Reviews and Additional Program Integrity Analysis

• May 2019 – OPAIS Pricing Component Update

OPA Updates


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HRSA Audits

• Can be random or targeted

• Not subject to random audit in first year of covered entity’s participation in the Program

• Number of registered contract pharmacies increase chances of being selected for audit

• Adverse findings can result in repayments to manufacturers or termination from the Program

HRSA Audits


HRSA Audits Since 2012

12

10 10 14 24 36 30 29 16

41

84 85

176 164 169 170

92

2012 2013 2014 2015 2016 2017 2018 2019*

Non-CHC CHC

CHCs remain a low proportion of total audits.

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Percentage of Entities with Adverse Findings


90% 90% 86% 83%

67% 70% 72%81%

2012 2013 2014 2015 2016 2017 2018 2019*

Community Health Centers

Types of Audit Findings 2017 & 2018


42%

18%

4%3%

33%

Community Health Centers

Duplicate discounts

Diversion

No contract pharmacy oversight

Inaccurate MEF

Incorrect OPA Database record

Sanctions for Adverse Findings 2017 & 2018


Repayment to manufacturers, 61%Contract

Pharmacy terminated, 18%

No sanction, 20%

Ineligible site termination, 1%

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• Manufacturers receive notifications (from covered entity) of the HRSA audit findings.

• It is up to the manufacturer to request refunds.

• If systemic problem, payback could reach millions of dollars.

Paybacks


On-Site Audit

• Opening meeting• Provision of sampled dispenses• P&P review and questions• General operations overview• Plan for associated site visits

On-Site Audit


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• Walkthroughs – parent & associated site(s)• 100% Virtual inventory –

• Physically Separate inventories• Avoid the Gotcha! moment

On-Site Audit


• Size depends on operations – approximately 60 dispenses seems to be a common number

• Can be much larger!

• Review for patient, provider, and location eligibility

• For retail pharmacy dispenses, hard copy prescriptions are requested

Sample Testing


• Medicaid• Medicaid dispenses are targeted to ensure some are

included in sample• For FFS Medicaid, bills will be requested• Check for billing number (MPN or NPI) and compare to

MEF

Sample Testing


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Anticlimactic(Adjective) /ˌan(t)ēˌklīˈmaktik,ˌanˌtīklīˈmaktik/

(1) causing disappointment at the end of an exciting or impressive series of events

(2) causing unhappiness by being less than expected or not as interesting as something that happened earlier

Exit Meeting


Opportunities to Enhance Compliance AND Savings

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340B Program Oversight

• Areas of oversight include:• Internal Audit• Contract Pharmacies• Use of Savings


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Oversight Basics

• Form an oversight committee• Pharmacy personnel• Internal audit/compliance• C-suite• IT support• Revenue cycle


Oversight Basics

• Develop an oversight plan• Comprehensive policies and procedures are key• Periodically review P&P and OPAIS• Determine self-audit schedule

• “As often as resources allow”

• Determine need for external assistance


Entity-wide Staff Training

• Some health centers conduct internal training for all staff

• Ensures general understanding of the Program

• May help improve medical record documentation


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Contract Pharmacies

• HRSA will issue adverse findings for “no contract pharmacy oversight”


What’s at Risk?

• Inadequate oversight risks your entire 340B savings!

• Failure to conduct oversight leads to diversion and duplicate discount findings.


Internal Auditing

How to self-audit retail pharmacies with virtual inventories

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Patient Definition


RISK CONTINUUMLow High

Prescription written by CHC eligible provider

at OPAIS registered site

Specialist prescription linked to referral from CHC

eligible providerat OPAIS

registered site

Prescription written by CHC eligible

provider delivering services in scope but

not at a physically distinct and OPAIS

registered site

Inpatient discharge prescriptions by non-CHC provider with

hospital referral and/or

coverage agreement

Specialist prescription initiated prior to health center’s assumption of responsibility for care

or resulting fromself-referral

Inpatient discharge prescriptions by non-CHC provider with

no referral or coverage

agreement

Prescriptions following acute

episodic or emergency care

with health center referral and ER

coordination program in scope

Acute episodic or emergency care with no

CHC involvement

Credit: Sue Veer, CEO of Carolina Health Centers, Inc.

Review period

• HRSA auditors typically select a six-month time period for review.


Example: Testing for Diversion

Supplier Invoice

Drug NDC

Matching Dispense

Patient record

Always start with the suppliers’ 340B invoices to ensure that drugs purchased under 340B are in the population for review.


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Sample Selection – Supplier Invoice

340B supplier invoices*

Drug NDC

Obtain a listing of 340B invoices for each 340B account used. Include both in-house and contract pharmacy accounts.

*recommend a six-month time period for review


Dispense Records

Matching Dispense • Every 340B drug purchase should be supported by auditable records* evidencing that the patient was eligible to receive the drug.

*Dispense records can be internally generated spreadsheets or virtual inventory records provided by a third-party administrator or a pharmacy benefits manager.


Patient Eligibility

Patient record

Trace dispense to patient records to verify eligible visit, eligible location, and eligible prescriber to support drug dispensed.


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Diversion

Supplier Invoice

Drug NDC

Matching Dispense

Patient record

• If the drug ordered is not supported by dispense records

• If the patient record does not support the dispense record

• Location of patient• Valid encounter• Prescriber• Insurer (Medicaid?)• Drug • Dosage


How can Diversion Occur?

• “Filters” or “tables” used in identifying eligible patients are not accurate or are inadequate.

Prescriber NPI or

Location

Prescriber NPI or

Location

Location of encounterLocation of encounter

InsurerPCN/BINInsurer

PCN/BIN

Encounter date or refill #

Encounter date or refill #


Documenting Internal Audits


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Internal Auditing

How to self-audit for duplicate discounts

Iowa Medicaid and 340B

Look for Medicaid Copayment

• If you know what your state’s Medicaid copayment amounts are, filter contract pharmacy monthly reports based on that copayment amount.

• Test patient dispenses to determine if these were Medicaid patients.


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Internal Auditing

Auditing Physically Separate Inventories

Don’t make Assumptions

• Often covered entities assume in-house inventories do not need to be audited if they are Medicaid carve-in

• Why?

• This assumption can lead to significant difficulties under audit!


The Good News

• It’s not hard to add this step!

• Periodically reconcile 340B inventory

• Test audit trailDrug Beginning

InventoryPurchases Eligible

DispensesWaste/Expired/Other

Computed Ending Inventory

Actual Inventory on Hand

Variance

A 10 20 25 0 5 6 1

B 5 2 2 0 5 5 0

C 400 2,100 1,500 50 950 900 (50)


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Internal Auditing

Defining material breach

Uh oh, we found something wrong…

• What do we do now?• Depends on whether the error is considered a material

breach• Material breach – notify HRSA and affected

manufacturers• Not material – correct problem and ensure no

manufacturer was adversely affected


What is a Material Breach?

• HRSA doesn’t define

• Up to the covered entity• Many use a combination of a dollar and percentage

threshold

• Be sure to address in P&P!


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Internal Auditing

Common missteps and additional opportunities

• If you carve-in, list every Medicaid provider number andNPI used to bill Medicaid

• Consider out-of-state Medicaid• Will you carve-out or carve in?• How will you prevent duplicate discounts?

• Develop process for notifying 340B team when MPN or NPI’s are changed or added

Duplicate Discount Prevention


• Compliance initiatives• Diversion prevention• Duplicate discounts• Routine self-audits• Patient compliance with treatment plan?

Retail Pharmacies – In-house or Contract


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• Additional opportunities• Evaluate electronic prescriptions sent from your covered

entity to identify potential new contract pharmacy opportunities

• Evaluate mix of prescribed medications• Opportunity costs with new contract pharmacies• Does an entity-owned retail pharmacy make sense?

Retail Pharmacies


Matt Atkins, CPA, CIA340B Apexus Certified Expert

Questions?

[email protected]

matt atkins updated presentation · ndc matching dispense patient record always start with the...

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