340B Compliance Playbook: Internal Audit And Best Practices
340B CompliancePlaybook: InternalAudit and Best Practices
ContentsIntroductionStoneBridge has been working with various types of healthcareorganizations all over the U.S. for two decades. Concernedabout your 340B program? A well thought-out and detailed auditprogram is critical to an audit initiative. The program should betailored to address the unique needs and characteristics of anorganization.By reading this paper, you will better understand 340B internalaudit procedures and best practices for each of the followingstages: Policies & Procedures Manual1.PAGE 022.3.Internal AuditProceduresPAGE 044.Quarterly / MonthlyInternal AuditProceduresPAGE 05 Internal Audit ProceduresWhile not intended to be a comprehensive review of every aspectof an audit, this book highlights some of the most importantsteps and best practices the 340B experts at StoneBridgeBusiness Partners have learned and implemented. As youwill read, with advance preparation, an audit can be plannedstrategically for success.Self-Audit / SelfMonitoring PlanPAGE 03 Self-Audit/ Self-Monitoring Plan Quarterly / Monthly Internal Audit ProceduresPolicies & ProceduresManual5.Review & Reporting6.Helping You Navigatethe ProcessPAGE 10PAGE 111340B Compliance Playbook: Internal Audit and Best Practices
340B Internal Audit & Best PracticesThe most important aspect of any CoveredEntity’s 340B Program is the dedication ofresources and the appropriate oversight. Acompliant 340B program contains strongpolicies and procedures, processes, internalcontrols and a leadership team that ensuresthey are being followed. These policies,procedures, processes and internal controlsshould incorporate a robust internal auditing/self-monitoring component.Through our experiences, we have identifiedkey elements that should be incorporated intoan organization’s policies and procedures, aswell as the processes and internal controlsshould be identified within, and which membersof your organization may be included in buildingan oversight team.POLICIES & PROCEDURES MANUAL:This is an evolving document that identifiesthe processes, personnel, and outline of everyaspect of the 340B Program within your entity,including but not limited to: Registration/recertification process Process for determining eligible sites Inventory procurement process Prevention of GPO Prohibition/ OrphanDrug Exclusion (if applicable) Definition of covered outpatient drugs Oversight of contract pharmacies Process for tracking and accounting for all340B drugs Process for prevention of diversion Maintenance and monitoring of 340Bsplit-billing software Process for prevention of duplicatediscounts Definition of a material breach thresholdand self-disclosure process to HRSA andmanufacturers, if necessary Self-audit and independent-audit program Continuing education for employeesThe policies and procedures manual should serve as a primaryguideline for your entity in managing 340B compliance.StoneBridgeBP.com 888.247.97642
Processes should be detailed, policies shouldbe definitive and not left open for interpretation,and self-audit plans should be simple and clearto follow. Most importantly, your entity’s policiesand procedures document should be reviewedand updated on an annual basis (at minimum) oranytime a change in the 340B program occurs.Included in the policies and procedures manualshould be the identification of a 340B ComplianceOversight Team. Members could include,The 340B Program demands compliance inmultiple areas of your organization and acrossmultiple levels of leadership. An organized340B Compliance Oversight Team promotestransparency and understanding throughoutan organization on the different roles eachdepartment may have to contribute towardscompliance. It also allows for a centralizedworkgroup to perform self-audit reviews and makedecisions on program changes.The Oversight Team should be trained in340B and in the processes employed by theCovered Entity to support the 340B program(replenishment/procurement, eligibilitydetermination, knowledge of contracted partners(TPAs/PBMs, Contract Pharmacies, split-billingvendors, etc.).3SELF-AUDIT / SELF-MONITORING PLAN:The next primary piece of a compliant 340Bprogram is the development of a robust selfauditing/ self-monitoring plan. An effectiveself-audit plan consists of annual and quarterly/monthly routine procedures that encompass allaspects of the 340B program at your coveredentity.A best-practice habit is to keep all informationthat will be needed for annual, monthly and/orquarterly internal audit/monitoring proceduresidentified and located in a common location.Certain information should be routinely backedup in a secure location as well. Additionally,processes for obtaining information should bedocumented and responsibility for gathering/obtaining required information should be assignedto relevant personnel.An organized 340BCompliance Oversight Teampromotes transparency andunderstanding throughout anorganization on the differentroles each department mayhave to contribute towardscompliance.These documents should be the source ofinformation needed to conduct the annual andquarterly/ monthly self-audit procedures to ensure340B compliance at your covered entity.340B Compliance Playbook: Internal Audit and Best Practices
The Policies and Procedures should identify thespecific processes to be employed through theinternal audit, and specific process documentsshould be drafted to identify the proceduresto be performed. In addition to the specificprocedures to be performed, the internal auditprocesses should identify: Is each child site listed as reimbursable onMedicare Cost Report?Process for determining eligibility ofcontract pharmacies How is site eligibility determined? Are all active contract pharmacies stilleligible? Are all contract pharmacy relationshipsidentified and active on the database? Were any dispensations made prior toeligible start date?Medicaid Carve-in statusANNUAL INTERNAL AUDITPROCEDURES: Does your entity bill Medicaid for drugspurchased at 340B pricing? Are all Medicaid NPI numbers used tocarve-in correctly listed in the MedicaidExclusion File?We have outlined 8 procedures to follow whenpreforming an annual internal audit.Entity Eligibility - Validate & Confirm:Processes for registration and recertification Disproportionate Share Percentage onMedicare Cost Report (DSH/PED/CAN/RRC/SCH) Are Authorizing Official and Primary Contactup to date and listed appropriately?Processes for determining eligibility ofparent/child sites How is site eligibility determined? Are all active sites still eligible? Are all off-site locations receiving 340B drugregistered on the database? 330 grantee status or FQHC-LA designation CHC Contracts/agreements with state and localgovernmentsStoneBridgeBP.com 888.247.97644
Detailed Review of Policies andProcedures including: Processes for preventing patient diversionPatient eligibilityDefining outpatient status Policy/processes for adherence to GPOprohibition (where applicable) Confirm/identify WAC accounts Medicaid Carve-in status Whether Covered Entity carves-in or carvesout If carve-out, describe processes employedto prevent the use of 340B drugs If carve-in: List all Medicaid NPI numbersused to carve-in on the Medicaid ExclusionFile Prescriber eligibility Referral Rx prescription and processes Refill/encounter policies Identification of key program personnel andresponsibilities Procurement and inventory processes in place Identify wholesalers and accounts – on-siteand contract pharmacies Detail of inventory processes – replenishment,virtual, manual, use and monitoring ofaccumulators, inventory reconciliations Processes employed for adherence to billingof Medicaid claims Process in place to review/update MedicaidFFS/MCO BIN/PCN identifiers at least annually Personnel authorized to purchase on 340Baccounts 340B Program training/continuing educationpolicies/requirements Requirement for 11-digit NDC replenishment Establishment and definition of materialbreach CDM to NDC crosswalk Detail of split-billing software and monitoringactivities – in-house and contract pharmacy Detail regarding EMR employed 5 State specific processes for treatment/billingof Medicaid claimsIdentification of TPAs/PBMs employed – toinclude description of the flow of informationbetween EMR and TPAs/PBMs Processes for self-reporting in the event ofmaterial breaches or reportable events. Processes for quantification of benefit of 340Bsavings, and how these savings are being putto use to improve/extend patient care340B Compliance Playbook: Internal Audit and Best Practices
Contract Pharmacy Review(Contract Pharmacy Oversight) Processes in place for carve-in/carve-out ofcontract pharmacies Process in place to communicate BIN/PCN identifiers to PBMs/TPAs/Contractpharmacies For child sites utilizing contract pharmacies,ensure that the contracts either identify thespecific sites or indicate all registered childsites may use the contract pharmacy(ies).Performance of an independent external auditto assess compliance, review policies andprocedures and identify areas of weakness/improvement Include review of contract pharmacies Detailed analysis of inventory – reconcilepurchases to utilization, incorporatingaccumulators Provide detailed reporting to internalleadership/stakeholders, to include plans forremediation and/or improvements Ideally select an organization that is notcurrently providing other 340B servicesto the Covered Entity (TPA/split-billingprovider) – allows for a fresh set of eyes Should be independent of the organization,have knowledge and experience with the340B program and be willing to providesupport before and after an engagement Fee should be representative of the size ofthe organization and the 340B activityQUARTERLY/MONTHLY INTERNALAUDIT PROCEDURESWe have outlined 4 procedures to follow whenpreforming quarterly / monthly internal audits.1. Eligible provider testing – ideally monthly(Prevention of Diversion) Review and update eligible provider listing Maintain eligible provider detail in anelectronic (ideally Excel) format Summarize dispensations/approved claimsfor all sources (in-house pharmacies,contract pharmacies, mixed-use, etc)by provider/NPI and compare this to theeligible provider detail, highlighting anyexceptions Ensure that changes to provider file arereflected in the dispensation data No new prescriptions from physiciansremoved from eligibility No approved 340B prescriptions prior toprovider eligibility date Investigate exceptions – if referral Rxsare captured, ensure that appropriatedocumentation is retained supportingreferral and that referral conforms to yourCovered Entity’s policyStoneBridgeBP.com 888.247.97646
Medicaid duplicate discount testing – ideallymonthly (prevention of Duplicate Discounts) Obtain purchase detail for all 340B accountsinclusive of the following elements, Nature of testing dependent on carve-in/carveout status For carve-out facilities, Summarize dispensation detail for all sourcesby BIN/PCN and compare this to the detailof Medicaid BIN/PCN identifiers – if anymatches, research reason for 340B treatmentand begin appropriate steps towardsremediation Select a sample of claims (15-20) that havebeen billed to Medicaid FFS/MCO andensure that billing procedures unique toyour state are followed and any identifiers/modifiers are appropriately includedInventory reconciliation/analysis –ideally monthly (Prevention of Diversion) May also address GPO prohibition and/ororphan drug adherence, dependent on entitytype (GPO Prohibition and Orphan DrugExclusion) Can be used in virtual and physicalinventory settings, and should incorporateall pharmacies – in-house retail, mixed use,contract pharmacies, etc.7 Quantity340B PricePackage SizeAccount NumberBill-to-LocationShip-to-Location Obtain corresponding accumulators andbeginning/ending inventory detail (if applicable)inclusive of the following elements, For carve-in facilities, Date of orderDate of PurchaseInvoice NumberNDCProduct DescriptionWAC/AWP Price Prescription # (Rx #)Refill #Patient IdentifierNDCProduct DescriptionPackage SizeBIN/PCN IdentifierReimbursement(where applicable)Patient status/type(where applicable) Date of dispensationDate of RxLocation of dispensionLocation of OriginationQuantity DispensedCDM (where applicable)Prescriber/NPIDispense Fee (whereapplicable) Based on purchase volumes, select 10-20NDCs for reconciliation – typically a mixtureof high volume drugs and high value drugs –for material purchase accounts. Summarizepurchase detail for the period being reviewed340B Compliance Playbook: Internal Audit and Best Practices
Upon selecting the NDCs, use thecorresponding dispensation detail tosummarize dispensations for the period ofreview and compare to the purchase detail Other things to consider (where applicable):Accumulator reviews, Matching of NDCs and quantities foraccumulations Matching of NDC dispensed/billed toaccumulations Matching of NDC ordered and receivedto accumulations Review of accumulator for negativeaccumulations – investigate/assessnature of negative accumulation and if itis necessary to work with wholesaler forcredit/rebill or returnsGPO Prohibition analysis, Summarize purchases through GPOaccount and reconcile a sample ofNDCs to the corresponding inpatientusage detail. Summarize purchases through WACaccount(s) Review GPO/WAC accumulators matchNDC/quantities to purchases anddispensationsDifferent NDCs can be used during eachreconciliation Where applicable, incorporate accumulatorand/or beginning and ending inventoryinformation – investigate any variancesnoted in the inventory reconciliation. Orphan Drug status, (Orphan DrugExclusion) If necessary, work with wholesaler(s),TPA(s) and HRSA to obtain/compile anorphan drug listing by NDC Review purchases to ensure that OrphanDrugs have not been purchased on the340B accountA best-practice habit is to keep all information that will beneeded for annual, monthly and/or quarterly internal audit/monitoring procedures identified and located in a commonlocation.StoneBridgeBP.com 888.247.97648
Inventory reconciliation/analysis –ideally monthly (Prevention of Diversion) Obtain dispensation data from all 340Bsources – (in-house, retail, contractpharmacies, etc.), and select samples fromeach of the sources Prescription (original prescription)corresponds to a patient encounter orotherwise documented in EMR If a refill, does the patient have an encounterwithin a specified time period that conformsto policies and procedures (ex, 1-yearwindow) Patient coverage corresponds to CoveredEntity’s Medicaid carve-in status If entity carves out, Medicaid is not primarycoverage If entity carves in, and patient is covered byMedicaid transactions should be traced tobilling to ensure adherence to state specificrulesSample sizes can vary, dependent onvolume, product mix, perceived risk, etc. For the claims sampled confirm the following,9 CE maintains record of patient care Patient was eligible – outpatient status Care provided by an eligible provider Patient received care within the scope ofgrant (for CHCs, FPs, STDs). Patient received care from a valid CoveredEntity location340B Compliance Playbook: Internal Audit and Best Practices
Review & ReportingMany of the monthly/quarterly internal auditprocesses can be performed concurrently byselecting a sample of claims from all 340Bsources, incorporating analysis of 340Bpurchases, review of Medicaid BIN/PCN,eligible providers, etc. This sample of claimscan be the basis for the inventory reconciliationprocedures, eligible provider testing, duplicatediscount testing and patient eligibility/diversiontesting.Depending on the outcome of the audit itmay be necessary to remediate and/or selfreport any non-compliance. These decisionsshould be able to be made by the ComplianceOversight Team based on the material breachthreshold identified in your Policies andProcedures document. Most importantly, allCovered Entity stakeholders should be kept“in the loop” on the performance of the 340Bprogram.This audit outline should serve as thebaseline for your self-audit plan and programoptimization. Next-level analysis of your 340Bprogram can be done in conjunction with youraudit-plan and can include,Following this outline that includes, havingstated policies and procedures, a detailedself-audit plan at both the annual and monthly/quarterly level and an engaged complianceoversight team will greatly reduce the risk of afinding during an audit from HRSA. Maintaininga compliant 340B program that includesparticipation from multiple members of yourorganization will help to optimize the benefitsof the 340B program for your organizationincluding your ability to spread scarceresources further throughout your patientpopulation. Minimizing WAC expense Identifying Contract Pharmacy and TPArelationship “profit” margins Quantifying operational weaknesses withinyour organization Identifying growth and opportunity for340B Program expansion across yourorganizationUpon concluding the elements of your auditplan the next steps are reporting the results tothe Compliance Oversight Team and recordingthe audit information in an easily retrievablelocation such as a summary dashboard or anindividual audit summary report.StoneBridgeBP.com 888.247.976410
Helping You Navigate the Process340B is becoming more scrutinized. Diversion of drugs to non-qualified patients and duplicatediscounts between 340B and Medicaid rebate programs are being audited by HRSA andmanufacturers. The responsibility for compliance rests with you. Gain the assurances you need byconsulting with professionals who have worked with HRSA’s national administrator for years.StoneBridge can help your organization by determining whether your program is working effectivelyand in accordance with 340B program requirements. Some specific areas that we consider in ourreview include: The existence of product diversion/duplicate discounts being claimed Assess adherence to guidelines with respect to eligible patients and prescribers Evaluate recertification procedures and eligibility validation Assess adequacy of program record keeping and adherence to HRSA guidelines Assess your internal controls as they relate to the adherence of stated policies and procedures Determine adherence to GPO prohibition guidelines (if applicable) Assess your relationship with contract pharmacies Review the inventory model employed and the ability to segregate 340B inventory transactions Assess and test the billing effectiveness involving patient/transaction eligibilityOur team works closely with clients to arrive at the best approaches for your particular set ofcircumstances. For more information about 340B Internal Audits and Best Practices, please contact ustoday!11340B Compliance Playbook: Internal Audit and Best Practices
About StoneBridge Business PartnersWe believe stronger businesses are built through relationships and accountability. StoneBridgeBusiness Partners delivers specialty compliance auditing, fraud and forensics services, businessvaluation, merger and acquisition consulting, litigation support and cost segregation to institutions,government agencies and contractors, non-profits, and businesses, including numerous Fortune 1000companies.Our professionals have worked in 15 countries and all 50 of the United States. Wherever you are, wecan help protect your business, your organization, your agency.Relationships built on integrity don’t happen by accident. They’re the result of good intentions, clearexpectations, help in identifying weaknesses, systems that support continuous improvement and—always—a great measure of respect. These are the qualities that we bring to every engagement.StoneBridge was founded in 1994 from a base of certified public accountants. We are headquarteredin Rochester, New BP.comStoneBridgeBP.com 888.247.976412
Entity’s 340B Program is the dedication of resources and the appropriate oversight. A compliant 340B program contains strong policies and procedures, processes, internal controls and a leadership team that ensures they are being followed. These policies, procedures, processes and internal controls should incorporate a
A 101 Webinar on the 340B Drug Discount Program Stephanie S. Arnold Pang Director, Policy and Government Relations December 19, 2019. Agenda 340B 101: Eligibility and Compliance -340B Glossary of Terms attached in materials STD 340B FAQs . PowerPoint Presentation Author:
340B Policy to Practice Guides reflect actual practices in place at 340B entities with leading practices or that have recently been audited by HRSA with no adverse audit findings. This particular Policy to Practice Guide is intended for 340B entity leaders and provides . Practice: E nt ies
playbook, Offensive Formation playbook, Defensive Formation playbook and Drills click the Database Selector pull down list. Creating a New Playbook File There are two ways to make playbook files. 1. File New Playbook File will start you off with a blank playbook or 2. File Save Playbook
source drugs (i.e., brand name drugs) versus non -innovator multiple source (i.e., generic drugs). 5. The 340B Program in Brief . The Veterans Health Care Act of 1992 authorized the 340B Discount Drug Pricing Program, which derives its name from Section 340B of the PHSA. The law is intended to help participating providers “stretch
Jan 20, 2016 · Types of inventory systems Physically separate Often used for in-house pharmacies. One inventory can be used if all patients are 340B eligible. Two inventories will be needed, separate 340B and non-340B, if some patients are ineligible for 340B program. Patient eligibility
CHAPTER 12 Internal Audit Charters and Building the Internal Audit Function 273 12.1 Establishing an Internal Audit Function 274 12.2 Audit Charter: Audit Committee and Management Authority 274 12.3 Building the Internal Audit Staff 275 (a) Role of the CAE 277 (b) Internal Audit Management Responsibilities 278 (c) Internal Audit Staff .
GTAG Global Technology Audit Guides HoA Head of Agency HoIA Head of Internal Audit IA Internal Audit / Internal Auditor IA-CM Internal Audit Capability Model IAS Internal Audit Service . Audit, the Code of Ethics for Internal Auditors and the Auditing Standards. The only way
8.2 Structure of DNA DNA structure is the same in all organisms. 8.3 DNA Replication DNA replication copies the genetic information of a cell. 8.4 Transcription Transcription converts a gene into a single-stranded RNA molecule. 8.5 Translation Translation converts an mRNA message into a polypeptide, or protein. 8.6 Gene Expression and Regulation
