Once a 340B Drug Pricing Program covered entity has demonstrated eligibility, the next areas of focus for self-monitoring are diversion and duplicate discounts. During a 340B Program integrity audit the Health Resources & Services Administration (HRSA) assesses compliance with diversion and duplicate discount expectations through transactional testing of a random and targeted sample selection of 340B drug administrations and prescriptions. HRSA audit findings in both categories have been trending downward since 2018, due in part to changes in HRSA’s audit methodology but largely as a result of increased self-monitoring efforts and improved operational structures for covered entities.
Sanctions rendered by HRSA for findings of diversion or duplicate discount are typically in the amount equivalent to the difference between the group purchasing organization (GPO) or wholesale acquisition cost (WAC) price and the 340B price. After identification of a finding, the covered entity is responsible for determining the full scope of noncompliance beyond findings noted by HRSA. All instances of noncompliance found are subject to the sanction, and entities must develop corrective action plans to prevent additional occurrences.
Self-monitoring to confirm prevention of diversion and duplicate discounts can take many forms. At a minimum, covered entities should be conducting transactional testing on a sample of 340B drug administrations and prescriptions on a routine basis. Advancements in technology and the increased use of data analytics are allowing covered entities to monitor more transactions at a greater frequency. Self-monitoring programs should be tailored to the covered entity with consideration given to transaction volumes, high-risk areas, and frequency with which monitoring efforts can occur.
Per Section 340B(a)(5)(B) of the Public Health Service Act, covered entities are prohibited from reselling or otherwise transferring a 340B covered outpatient drug to a person who is not a patient of the entity. Common examples of diversion include:
- Dispensation of a 340B drug to an individual who is not an eligible patient of the covered entity
- Dispensation of a 340B drug through administration or prescriptions in an area or location that is not eligible
- Dispensation of a 340B drug that is not supported by the medical record
Assessment of the following at the time the drug was administered or prescribed is key in confirming prevention of diversion:
- Patient status
- Healthcare professional
- Responsibility of care
- Project scope (nonhospital) for services received
The most common self-monitoring practice to assess compliance with diversion prevention is sample testing of 340B drug administrations and prescriptions. Recommended sample sizes range from 20 to 30 transactions monthly, per operational model, and can be narrowed each month to focus on different areas of risk. Variety in sample selection facilitates a comprehensive review of diversion prevention throughout the organization. Covered entities can optimize their self-monitoring efforts by including the following in their sample selection:
- High-risk areas, including locations with manual documentation, billing on dispense, or clean-use areas
- High-risk drugs, including medication given during codes, from multidose vials, or in unusual or suspect quantities
- A variety of locations from across the organization
- Referral prescriptions
- Locations and drugs with the highest or lowest utilization volumes
Diversion extends beyond the patient healthcare encounter for a 340B virtual inventory. Managing the accumulation and replenishment process incorrectly could have diversion implications. The entire quantity of 340B drugs accumulated, including any drug waste, must be accounted for by auditable records demonstrating the drug was administered in its entirety to an eligible patient.
Diversion is a key area for using data analytics to complete a more comprehensive compliance review. Areas where 100% of 340B-eligible transactions can be assessed with data analytics include:
- Patient status
- Responsible healthcare professional
Covered entities can confirm diversion compliance in the following ways through data analytics:
- Compare the list of eligible healthcare professionals to the 340B-eligible transactions to confirm all drug administrations and prescriptions were the result of care provided by an eligible healthcare professional.
- Compare the list of eligible locations to the location of the 340B-eligible transactions to confirm all locations of drug administrations and prescriptions were reimbursable to the covered entity.
- Check patient status at the time of drug administration to confirm 340B medications were administered to outpatients.
- Compare the quantity administered to the quantity accumulated in the 340B virtual inventory to confirm purchasing compliance.
Data analytics might not cover all components needed to prevent diversion but can provide greater insight into areas of risk or gaps in processes. In addition, data analytics can help identify systemic issues that might not be as apparent when completing a sample-based, transactional testing audit.