Printed copies are for reference only. Please refer to the electronic copy of this policy for the latest version.
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1 340B Pharmacy Audit Policy Version: 1.4 Date Created: 01/05/2015 Date Approved: 02/18/2015 Printed copies are for reference only. Please refer to the electronic copy of this policy for the latest version. Purpose: The purpose of this policy is to ensure highest 340B program compliance and integrity, in accordance with the rules, regulations and guidance put forward by the Office of Pharmacy Affairs. Policy Applies: (check all that apply) All Staff Administrative Staff Clinical Staff Providers Board of Directors Only applies to this or these sites: Pharmacy and 340B Staff Policy: Penobscot Community Health Center Inc. (PCHC) has registered with the Federal Office of Pharmacy Affairs (OPA) as a 340B Program Covered Entity. The center maintains in house pharmacies and contracts with retail pharmacies in the community to provide pharmaceutical services to patients and to administer the Federal 340B Drug Pricing Program for discounting drugs to eligible patients. The health center abides by all prohibitions and requirements of the 340B Program as stipulated in the Federal Register: Vol. 75, No. 43 (March ). Audits are conducted to verify that 340B drugs are only dispensed to individuals who meet the definition of patient per the Federal Register: Vol. 61, No. 207 (October ). Patient Definition: An individual is a patient of a 340B covered entity only if: The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual s health care; and The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g. referral for consultation) such that responsibility for the care provided remains with the covered entity; and The individual receives a primary health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally qualified health center look alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement. An individual will not be considered a patient of the covered entity if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self administration or administration in the home setting.
2 To ensure full compliance with 340B regulations, the PCHC has adopted the following audit policies: 1. To prevent sale of 340B drugs to non eligible patients, contract pharmacies utilize a replenishment model in which a 340B drug is re ordered only after it has been dispensed to eligible patients and once a full package size with corresponding 11 digit NDC has been reached. PCHC in house pharmacies maintain separate, segregated inventories and ensure with each prescription that 340B medications are only dispensed for 340B eligible prescriptions. 2. To prevent diversion of 340B drugs to non eligible patients, internal audits of in house and contract pharmacy dispensing records verify prescriptions deemed 340B eligible are not written for individuals failing to meet 340B patient definition. 3. To prevent diversion of 340B drugs, internal audits of contract pharmacy dispensing records verify prescriptions written by non PCHC providers are disqualified from participation in PCHC s 340B contract pharmacy program. 4. To prevent duplicate discounts, internal audits of contract pharmacy dispensing records verify that prescriptions reimbursed by Medicaid exclude. When implementing a new contract pharmacy arrangement, an initial audit of 5% of all scripts per pharmacy site (with a minimum of 10 prescriptions) is selected from all 340B prescriptions dispensed each month. This audit is conducted to ensure that there are no prevalent issues. To ensure continuing compliance, additional audits are conducted every months; these audits verify that 340B drugs are dispensed to individuals who meet the definition of patient per the Federal Register: Vol. 61, No. 207 (October ). A material breach assessment will be conduct by the Compliance Officer and the Director of Pharmacy in the event an prescription error variance rate of 5% or more within reviewed period of 3 months or greater or for inventory discrepancies (more which cannot able to be resolved at point of identification) of 5% or. All issues determined to substantiate material breach will be reported to OPA and the appropriate manufacturer. Auditing Procedure Overview Procedures have been developed to verify the following: 340B Regulation Audit Methodology 1. The individual receives a health care service or 1. Verify that the 340B drug is the result of range of services from the covered entity service provided at the health center, and that consistent with the service or range of services the service is within the approved scope of the for which grant funding or Federally Qualified center s program. Health Center status has been provided. 2. The individual receives health care services from a health care professional who is either employed by the covered entity or provides appropriate health care (e.g., referral for consultation in house prescriptions only) such that responsibility for the care provided remains with the covered entity. 2. Verify that the prescriber is employed or otherwise authorized by the health center at the time the prescription was written.
3 3. The covered entity has established a relationship with the patient such that the entity maintains records of the individual s health care 4. Situations are prevented in which a drug is subject to both the 340B discount and a Medicaid rebate claim. 5. Auditable records are maintained to demonstrate ongoing 340B Program compliance. 3. Verify that the patient has a medical record at the health center. 4. Perform monthly review of contract pharmacy dispensing reports to ensure exclusion of all prescriptions where a claim is submitted to Medicaid. 5. Perform monthly review of detailed dispensing reports for all 340B prescriptions from the Management Service Provider (for the contract pharmacy or in house pharmacy); verify that the contract pharmacy dispensing system is auditable based on terms stipulated in the Pharmacy Service Agreement. Contract Pharmacy Audits: Monthly: 5% of all qualifying 340B contract pharmacy claims (minimum of 10 claims) will be randomly selected and audited to ensure program compliance. Quarterly: All monthly 340 contract pharmacy audits will be reviewed quarterly as an aggregate and by 340B program vendor to identify issues for trends and for identification of a material breach (defined as 5% of or more of ineligible claims processed during a defined review period) Annually: All monthly contract pharmacy claim audits will be reviewed annually as an aggregate and by 340B program vendor to identify issues for trends and for identification of a material breach (defined as 5% of or more of ineligible claims processed during a defined review period) Audits will be completed for 340B contract pharmacy claims to ensure program eligibility. Audits will be conducted using the following metrics to ensure program compliance: Audit Details: Site: Covered Entity Name, Contract Pharmacy 340B Program Vendor & Pharmacy Locations, Total Sample Size, Number of Scripts Audited (5%), Auditors: Person(s) Conducting Audit, and Period Covered: to ( interval = 1 month) Prescription Claim Details: Patient Name, Date of Birth, Date Written, Date Filled, RX #, NDC, Drug Name and Quantity dispensed Eligibility Verification Details: Prescription Present in EMR: Verify that prescription was documented in EMR Provider Eligible: Verify that prescription was written by an eligible provider (health center employee). Service Location Eligible: Verify that last date patient seen at the health center is within one year of script s written date. Billed MM: Verify whether or not script is subject to any other drug discount / rebate mechanism, per state Medicaid guidelines and other program parameters.
4 Pass/Fail Remediation: Document remediation action (claim reversal) in the event a non qualifying claim is identified PCHC In House Pharmacy Audits: Daily: Prescription audits will be performed in each PCHC pharmacy on a daily basis with the exception of when the Pharmacist In Charge is not present for the end of the day. In this case, all daily audits will be completed at the end of the week. Any discrepancies noted during the audit process will be corrected through claim reversals and appropriate inventory adjustments. 340B Medicaid Exclusion Audit: This report is run through the QS1 pharmacy software system. Prescription claim details for all Medicaid (MaineCare) claims and the corresponding medication with inventory identifiers, tilde (~) to identify 340B inventory and backslash (/) to identify non 340B inventory. Claims are reviewed to ensure only non 340B inventory was dispensed for prescriptions billed to Medicaid. In the event an incorrect claim is identified, the claim will be reversed and inventory correction made at that time. (See 340B MaineCare Exclusion Audit procedure for step by step report directions.) : Inventory Audits will occur in each PCHC pharmacy on a weekly basis to ensure that 340B medication is not being diverted. Inventory Assurance Audits: This audit will be performed on a weekly basis. Between 2 and 4 medications will be selected each week for a total of 8 10 audits per month. QS1 Medication NDC specific inventory reports of monthly usage will be compared to the wholesaler NDC specific inventory monthly usage report to verify that the quantity dispensed corresponds with the quantity received and that remaining in inventory to ensure that 340B medication is not being diverted. Medications may be selected at random but should reflect both high and low cost medications. (See 340B Medication Audit Process for step by step report directions.) In the event that an issue is identified, an investigation will be conducted to determine the source of the issue and corrective mechanism applied. Monthly: Provider Referral Audits will occur on a monthly basis in each PCHC pharmacy to ensure that 340B medication is not dispensed for ineligible prescriptions. PCHC providers will be designated in the QS1 system for identification at the time of order entry. Staff will verify prescriptions from outside providers have corresponding EMR referral documentation and consult report. This information will be documented in the prescription details in QS1 and used for audit purposes. 340B Referral Provider Audit: This report is run through the QS1 pharmacy software system. Prescription claim details for all prescriptions written by non PCHC providers and the corresponding referral documentation code (RF) are generated for the selected month. Any prescription identified which does not have the RF code documented must be audited by pharmacy staff. EMR review will be conducted to determine if a referral is in fact on file and documentation in QS1 was missed. If no corresponding referral documentation is present in the EMR, the claim will be reversed and inventory correction made at that time. (See Audit procedure to make sure 340b prescriptions dispensed, written by non PCHC provider, confirmed referral/consult in chart and Identification of Referral / Consult in Electronic Medical Record for 340B Use for step by step directions)
5 PCHC 340B COMPLIANCE REVIEW The 340B Compliance Review summarizes all activities used to ensure comprehensive review of 340B compliance at PCHC. PCHC Staff is responsible and accountable for overseeing this review process, as well as taking corrective actions based upon findings. Area of Focus Activity Review of all OPA database information for PCHC, indigent care agreement with state/local government PCHC Staff responsible:, Felicity Homsted, Director of Pharmacy Review of 340B Self Audit Reports PCHC Staff responsible: PCHC site Pharmacist In Charges, Felicity Homsted, Director of Pharmacy & Amy Shawley, Pharmacy Administrative Assistant Inventory Assurance Audits, 340B Medicaid Exclusion Audit, 340B Referral Provider Audit Contract Pharmacy Audits Review of quarterly contract price load PCHC Staff responsible: Michael Warmuth, Pharmacist In Charge Frequency Annual Daily Monthly Quarterly Entity Eligibility No Diversion No Duplicate Discount Update (minimum) of prescriber and patient eligibility files with PBM/contract pharmacy PCHC Staff responsible: Felicity Homsted, Director of Pharmacy & Amy Shawley, Pharmacy Administrative Assistant 3 rd Party Vendor External Audit of Entity/Contract Pharmacy: PCHC Staff responsible: Felicity Homsted, Director of Pharmacy and Christine Finn McLaughlin, CFO Annual
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