340B Program Contract Pharmacy Self-Audit Tool: Diversion

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1 Page 1 Purpose: The purpose of the Contract Pharmacy Self-Audit Tools is to improve contract pharmacies compliance with the 340B Program requirements. Covered entities remain responsible for the 340B drugs they purchase and dispense through a contract pharmacy. Covered entities are required to ensure ongoing compliance and the timely recognition of any 340B Program compliance problems at all contract pharmacy locations, while maintaining auditable records. The contract pharmacy self-audit tools are divided into three compliance elements: 1. Contract Pharmacy Eligibility 2. Contract Pharmacy Prevention of 3. Contract Pharmacy Prevention of Duplicate Discounts These tools are applicable to all types of covered entities that have contract pharmacy operations. Contract pharmacies must meet eligibility requirements to participate in the 340B Program and prevent diversion and duplicate discounts. The completed self-audit tools can demonstrate routine monitoring of 340B Program operations and serve as an auditable record. This Contract Pharmacy Self-Audit Tool provides a self-examination of an entity s compliance with prevention of diversion at the contract pharmacies. Instructions: Covered entities are encouraged to complete this tool quarterly for each contract pharmacy service organization. Proceed through the steps as follows: 1. Identify the staff member to complete this self-audit tool. 2. Identify and collect relevant data for the most recent 3-month period, as follows: a. List of eligible covered entity locations (clinics/departments/service units) b. List of eligible providers c. Proof of provider eligibility (contract/employment records, referral for consultation) d. Patients health care records. e. Contract pharmacy 340B purchasing invoice f. 340B dispensing records (including signature capture records) g. NDC crosswalk (for virtual inventory) h. Pharmacy accumulation report (for virtual inventory) i. Pharmacy inventory report (for physical inventory) j. For grantee: grant that qualifies the grantee to participate in the 340B Program 3. Select audit samples a. Select 20 contract pharmacy invoices, as follows: 10 invoices with the highest volume (number of lines) and 10 invoices with the highest total cost. b. Randomly select 20 different drugs from the 340B purchasing invoices identified in step 3a (recommend one per invoice). c. Randomly select 1 dispensation for each of the 20 different drugs identified in step 3b. d. Randomly select 5 prescriptions returned to stock (not picked up) from contract pharmacy dispensing records. 4. Complete Tables 1 through 5 and answer the corresponding assessment questions. 5. Complete the Summary of Results. a. This section is a brief summarizing statement of the self-audit results for senior leadership and other key 340B stakeholders.

2 Page 2 6. Review the results with the 340B Steering Committee (or other compliance oversight committee as determined by entity s compliance program or policies and procedures). a. Assess whether the results are indicative of a material breach (refer to Establishing Material Breach Threshold Tool) ach_threshold.pdf 7. Develop a corrective action plan, if applicable. a. Attach a corrective action plan that addresses the compliance issues identified in this self-audit. This document has been formatted so that the tables are on one page. There may be intentional white space at the end of some pages.

3 Page 3 1. Entity s Name 2. Entity s 340B ID 3. Document the name of the contract pharmacy organization(s) (not locations) being audited. (A contract pharmacy organization may be a chain or an independent pharmacy and have multiple service site addresses.) 4. Date of the LAST self-audit. 5. Audit sample period of THIS self- audit. (Note: First day of audit sample period should be the day after the last day of the previous audit sample.) 6. Date of THIS self-audit. 7. Name and title of individual completing THIS selfaudit. 8. Summary of Results: Note areas for improvement identified. Covered Entity & Contract Pharmacy Information 9. Actions to be taken:

4 Page 4 Compliance Element: PREVENTION OF DIVERSION All 340B drugs purchased are dispensed to eligible patients or otherwise accounted for. Section 340B of the Public Health Service Act prohibits the resale, or other transfer, of a 340B drug to a person who is not a patient of the entity. Covered entities are responsible for maintaining an accurate patient eligibility determination system at their contract pharmacies, including tracking and accounting all of 340B drugs at the contract pharmacies to ensure that diversion has not occurred. PATIENT ELIGIBILITY VERIFICATION Table 1 For each of the 20 prescriptions selected in step 3c of instructions (page 1), and for the date range selected in step 2 (page 1) of instructions, verify patient eligibility by validating the contract pharmacy dispensing record against the entity s health care record. Validate that the prescription is the result of a health care service provided to a covered entity patient at an eligible site by an eligible provider such that the covered entity documents its responsibility for care in its health care record. Table 1 Contract Pharmacy Patient Eligibility Verification Time period tested: begin date to end date. (attach actual data to substantiate eligibility for each Rx#) (1) Contract pharmacy location (2) Rx # (3) Date filled (4) Drug prescribed from 340B ELIGIBLE location? (5) Drug prescribed from LOCATION with a 340B ID? (6) ELIGIBLE Provider (A) Employed/ Contracted? (B) Documented referral? (7) DOCUMENTED PRESCRIPTION in hospital/ grantee health care record? (8) Dispensing record accurately reflects data on prescription? (9) GRANTEES ONLY Prescription from services included in scope of grant? YES NO YES NO YES NO YES NO YES NO YES NO YES NO

5 Page 5 Table 1: Assessment Questions Yes No N/A Unsure 1) Were all prescriptions tested in Table 1 filled at a contract pharmacy location registered on the 340B Database? Identify the contract pharmacy organization locations of this self-audit. List location where the prescription was dispensed. Compare the location where the prescription was dispensed to the hospital/grantee s HRSA 340B Database registered contract pharmacy list. Answer YES to the question only if all contract pharmacy locations are listed on the 340B Database. If response is No or Unsure, indicate Rx # and explain: 2) For each prescription tested in Table 1, did each patient receive the prescription from an outpatient service at an eligible site/department registered on the 340B database? Identify the service/visit from which the prescription was written. Match the service/visit location with an eligible clinic/department registered on the 340B Database. Answer YES to the question only if all answers are YES in the columns titled Drug prescribed from 340B eligible location and Drug prescribed from location with a 340B ID in Table 1. If response is No or Unsure, indicate Rx # and explain: 3) For each prescription tested in Table 1, did each patient receive the prescription from an eligible provider employed or contracted with the hospital/grantee? Identify prescriptions that originated from a hospital/grantee site registered on the HRSA 340B Database. List provider who prescribed the medication deemed 340B eligible. Compare the prescribing provider to the eligible provider list. Determine the eligibility of provider. Answer YES to the question only if all answers are YES in the column titled Eligible Provider: Employed/contracted in Table 1. If response is No or Unsure, indicate Rx # and explain:

6 Page 6 4) For any prescription tested in Table 1 that originated from referral: Does a referral for consultation and referral visit summary exist in the patient s health record for each prescription not written from a hospital/grantee site registered on the HRSA 340B Database? Identify prescriptions that did NOT originate from a hospital/grantee site registered on the HRSA 340B Database. Determine the hospital/grantee referring provider. List providers who prescribed the drug deemed 340B eligible. Locate a documented referral for consultation to the outside provider. Locate a documented summary of the referral visit from the outside (referred) provider. If no prescriptions arose from referral for consultations, indicate N/A. Otherwise, answer YES only if all answers are YES in the column titled Eligible Provider: Documented Referral in Table 1. If response is No or Unsure, indicate which Rx # and explain: 5) Was each prescription tested in Table 1 documented in the patient s health care record? (Demonstrates that the hospital or grantee maintains responsibility for the care of the patient.) Answer YES to the question only if all answers are YES in the column titled Documented in the health care record in Table 1. If response is No or Unsure, indicate which Rx # and explain: 6) For Grantee Only: Was each prescription tested in Table 1 a result of a service consistent with the scope of grant funding? Identify which services are included within the grant. Answer YES to the question only if all answers are YES in the column titled Services included in scope of grant in Table 1. If response is No or Unsure, indicate which Rx # and explain: 7) For each prescription tested in Table 1, does the contract pharmacy s dispensing record accurately reflect the data on the prescription? (Demonstrates accurate tracking and accounting of 340B drugs.) Compare the electronic dispensing data (date written, patient, prescriber, drug name, strength, quantity, and days supply) with the actual prescription (paper or electronic copy). Answer YES to the question only if all answers are YES in the column titled Dispensing record accurately reflects data on prescription in Table 1. If response is No or Unsure, indicate which Rx # and explain:

7 Page 7 INVENTORY PURCHASE AND DISPENSATION RECONCILIATION Table 2 For each of the 20 drug audit samples selected in step 3b (page 1) of the instructions and for the date range selected in step 2 (page 1) of the instructions, use purchasing, dispensing, and inventory records to reconcile inventory units. Note that inventory units refers to either the number of units in stock (actually on the shelves if using physical inventory) or number of units in the accumulator (if using virtual replenishment). Any identified variance will need to be resolved and documented to demonstrate that the 340B drug was not diverted. (1) 340B drug name and strength (2) NDC (if virtual inventory) (3) Date range selected through today s date Table 2 Purchases and Dispensations Reconciliation Time period tested: begin date to end date (attach data to substantiate reconciliation for each sample) (4) Beginning inventory (units) (5) (-) Dispensed (units) (6) (+) Purchased (units) (7) (=) Ending Inventory (units) (8) Reconciled? (9) Variance resolved? YES NO YES NO

8 Page 8 Table 2: Assessment Questions Yes No N/A Unsure 1) For the drugs tested in Table 2 during the defined time period, does the number of units purchased and dispensed reconcile to the number of units left in inventory? Answer YES to the question only if all answers are YES in the column titled Reconciled in Table 2. If response is No or Unsure, explain: 2) For the drugs tested in Table 2 during the defined time period, were all identified variances resolved and documented? (Demonstrates that variances were not the result of diversion) Answer YES to the question only if all answers are YES in the column titled Variance Resolved in Table 2. If response No or Unsure, explain: (Identify and discuss each outlier) 3) If a virtual inventory is used, is the accumulator manually adjusted when an NDC ordered is not available and the wholesaler ships a substitution? Answer N/A if a physical inventory is used. Identify actual invoices when substitutions occurred. Verify that a manual adjustment to the accumulator was made. Answer YES to the question only if substitutions were made and a manual adjustment to the accumulator was documented. If response is No or Unsure, indicate Rx # and explain: (Identify and discuss each outlier) (continue on next page)

9 Page 9 VIRTUAL INVENTORY ACCUMULATION AND REPLENISHMENT RECONCILIATION Table 3 Randomly select one (1) day of accumulations for each of the 20 drugs selected in step 3b of the instructions (page 1). Use the NDC crosswalk and pharmacy accumulation report to ensure that the accumulation and replenishment process uses an exact 11-digit NDC match for each drug. (1) Sample ID (2) Accumulation identifier or record associated with prescription number or dispensation tracking number TABLE 3 Accumulation and Replenishment Reconciliation Table Time period tested: begin date to end date (attach data to substantiate reconciliation for each sample) (3) Date of accumulation (4) Drug NDC quantity dispensed matches quantity accumulated? (5) NDC billed matches NDC accumulated? (6) Drug NDC and quantity ordered match drug NDC and quantity deducted from 340B accumulator? (7) Drug NDC and quantity received match drug NDC and quantity ordered? YES NO YES NO YES NO YES NO

10 Page 10 Table 3: Assessment Questions Yes No N/A Unsure 1) For the drugs tested in Table 3, was the dispensed quantity of medication correctly accumulated? Answer N/A if a physical inventory is used. Answer YES to the question only if all answers are YES in the column titled Drug NDC quantity dispensed matches quantity accumulated in Table 3. If response is No or Unsure, indicate Rx # and explain: (Identify and discuss each outlier) 2) For the drugs tested in Table 3, did the 11-digit NDC billed match the 11-digit NDC accumulated for each accumulation sample? Answer N/A if a physical inventory is used. Answer Yes to the question only if all the answers are YES in the column titled NDC billed matches NDC accumulated in Table 3. If response is No or Unsure, indicate which Rx # and explain: (Identify and discuss each outlier) 3) For the drugs tested in Table 3, did the drug NDC and quantity ordered on the pharmacy s 340B account match the drug NDC and quantity deducted from the 340B accumulator? (Quantity in accumulator are based on billing units per package [BUPP].) Answer N/A if a physical inventory is used. Answer Yes to the question only if all answers are YES in the column titled Drug NDC and quantity ordered matches drug NDC and quantity deducted from 340B accumulator in Table 3. If response No or Unsure, indicate Rx # and explain: 4) For the drugs tested in Table 3, did the drug NDC and quantity received match the drug NDC and quantity ordered? Answer N/A if a physical inventory is used. Answer YES to the question only if all the answers are YES in the column titled Drug NDC and quantity received matches drug NDC and quantity ordered in Table 3. If response No or Unsure, indicate Rx # and explain: (Identify and discuss each outlier)

11 Page 11 PHYSICAL INVENTORY Answer Assessment Questions Yes No N/A Unsure 1) If a physical inventory is used, are 340B drugs on the shelves identifiable or isolated from non-340b drugs? Answer N/A if a virtual inventory is used. To answer this question, the reviewer will be required to visit the medication storage area of the contract pharmacy involved in the self-audit. If response is No or Unsure, explain: 2) If a physical inventory is used, does a system exist to validate that the drug name, strength, and quantity on the wholesaler invoice are received at the contract pharmacy? Answer N/A if a virtual inventory is used. For each drug listed in Table 2, choose one invoice date to test. Identify and reconcile the actual wholesaler packing slip with actual invoice. If response No or Unsure, explain: (Identify and discuss each outlier)

12 Page 12 RETURN TO STOCK VERIFICATION Table 4 For each of the 5 prescriptions selected in step 3d of the instructions (page 1), verify that the accumulator or physical on-hand amount was manually adjusted to reflect the return of inventory to stock. (1) Prescription # TABLE 4 Return to Stock Process Verification Table Time period tested: begin date to end date (attach data to substantiate inventory adjustment for each sample) (2) Date filled (3) Date returned to stock (4) Manual adjustment of accumulator or physical on-hand amount? YES NO (5) Date manual adjustment documented Table 4: Assessment Question Yes No N/A Unsure 1) For the drugs tested in Table 4, was the accumulator or physical on-hand amount manually adjusted for return to stocks? Identify when a prescription was returned to stock. Verify that a manual adjustment to the accumulator or physical on-hand amount was made. Answer YES to the question only if all answers are YES in the column titled Manual adjustment of accumulator or physical on-hand amount in Table 4. If response is No or Unsure, explain:

13 Page 13 CONTRACT PHARMACY PURCHASING ACCOUNTS Table 5 List contract pharmacy purchasing accounts for each contract pharmacy location. (1) Contract Pharmacy Location TABLE 5 Contract Pharmacy Purchasing Accounts Table Date documented (2) 340B (Wholesaler/ Direct/Account #) (3) WAC (Wholesaler/ Direct/Account #) (4) GPO (Wholesaler/ Direct/Account #) Table 5: Assessment Question Yes No N/A Unsure 1) DSH, PED, CAN: For contract pharmacies listed in Table 5, are all the hospital s drugs shipped to the contract pharmacies ordered through either a 340B account or WAC account? List contract pharmacy purchasing accounts for each contract pharmacy location. Verify that the covered entity drugs are not purchased using a GPO account at contract pharmacy. Answer N/A if covered entity is not subject to the GPO Prohibition. Answer YES to the question only if accounts are listed in the columns titled 340B and WAC in the contract pharmacy purchasing accounts. If response is No or Unsure, explain: This tool is written in collaboration with the HRSA 340B Peer-to-Peer Program to align with Health Resources and Services Administration (HRSA) policy, and is provided only as an example for the purpose of encouraging 340B Program integrity. This information has not been endorsed by HRSA and is not dispositive in determining compliance with or participatory status in the 340B Drug Pricing Program. 340B stakeholders are ultimately responsible for 340B Program compliance and compliance with all other applicable laws and regulations. Apexus encourages each stakeholder to include legal counsel as part of its program integrity efforts Apexus. Permission is granted to use, copy, and distribute this work solely for 340B covered entities and Medicaid agencies.

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