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Five value pillars of 340B Program compliance

For 340B Program directors, knowing in real time if their employer complies with the U.S. Health Resources & Services Administration’s requirements (and could pass a HRSA audit) is top of mind, all the time. That’s because maintaining their employer’s 340B Program benefit directly correlates to profitability.

Complying with the program means focusing on ever-changing guidelines and regulations. Along with protecting profits and monitoring changing requirements, 340B Program managers also hear politicians, pharmaceutical makers and the press call for more oversight by the federal government. Drug makers are concerned how rapidly the program has grown. For example, in 2000 there were 8,100 participating hospitals and pharmacies. By 2020, the number participating soared to 50,000. According to HRSA, discounted purchases under the 340B Program hit $44 billion in 2021, a 16-percent uptick from 2020.

While healthcare CFOs participating in the 340B Program know how drug discounts boost their employer’s profitability, they’re typically unaware of what happens behind the scenes to stay eligible. CFOs are also unlikely to know the risk to their healthcare system’s net income if their 340B Program manager made a mistake accounting for drug discounts and had to pay back a pharmaceutical company. Compounding the CFO’s challenge are 340B Program managers and staff who lack resources to comprehensively track transactions and contracts across their healthcare system.

Complexities in tracking discounts abound. For instance, when a covered entity’s doctor prescribes a drug to a Medicaid patient, drug makers must provide a rebate through the Medicaid Drug Rebate Program or a discount through the 340B Program but not both. As part of the 340B Drug Pricing Program, manufacturers and the federal government can audit covered entities to ensure they’re complying. If a covered entity fails an audit, drug makers can hold the covered entity liable for a refund of these discounts.

What’s needed to help 340B Program directors and CFOs?

For starters, covered entities and their executives need real-time information about their program’s compliance with HRSA requirements instead of waiting to react to issues. With so much at stake for healthcare systems and patients, giving 340B Program managers situational awareness about their relationship with contract pharmacies is critical. Tracking licenses and OPAIS discrepancies are just two areas that program directors say they would like to automatically monitor each day. Having a tighter rein on claims would also help 340B Program managers avoid the duplicate discounts mentioned above. Ensuring documentation compliance and centralizing compliance data would give managers and CFOs clarity about their 340B Program’s status.

Five pillars of Continuous Program Compliance®

Being able to see–right now–if your 340B Program is compliant requires achieving the five value pillars of continuous program compliance: standardization, accountability, visibility, efficiency, and sustainability.

340B Program Compliance Standardization


In the absence of organization-wide standards, each covered entity may manage compliance tasks a bit differently. And when each of the covered entity’s TPAs employ their own audit procedures, rolling up audit data in one place and applying the same rules consistently across the entire data set can be a challenge if not impossible. With compliance management software like SectyrHub® 340B, program directors can employ standard compliance procedures for all covered entities in the system. They can also get a consolidated view of TPA transaction data. Compliance software can reduce variability and improve predictability by standardizing processes. With software like this, a covered entity’s program director and CFO know the expectations and can measure and track things across their organization.

340B Program Compliance Accountability


With multiple stakeholders, 340B Program directors often struggle to tap who owns tasks and outcomes. Manual processes cause program managers to waste time analyzing data only to find what they’ve collected is incorrect or out of date. By automating the management of documents with compliance software, a director can assign tasks to each responsible party and verify the owner completes the job. Accountability is further improved when each team member can see their tasks, what’s expected, and when it’s due.

340B Program Compliance Visibility


A 340B Program director can only manage what they can see. Too often, managing 340B compliance is a laborious practice that rarely gives directors the high-level visibility to spot trouble quickly or see around corners. When stakeholders ask if the covered entity’s program is compliant, directors often make an educated guess. These blind spots cause program directors to teeter between worry and exposure to lost revenue, fines or worse. Compliance software like SectyrHub 340B gives program directors around-the-clock visibility into a covered entity’s level of compliance. That, in turn, facilitates the insight to work with confidence.

340B Program Compliance Efficiency


When a covered entity employs spreadsheets and calendars to input, track, and monitor 340B compliance requirements, time becomes a casualty. Program directors lament how there isn’t enough time in their day to record, assign, and follow up on their program’s work. Much of the work is repetitive and tedious. Creating a digital dashboard for all stakeholders to tap into means no more guessing about what 340B team members need to do to maintain compliance. Digitizing the compliance process automatically assigns tasks and notifies team members about their program’s status.

340B Program Compliance Sustainability


It’s not uncommon to hear 340B Program directors say they’re dependent on a few key people. If a member of the team takes a vacation, things can stand still. And if a team member retires or resigns from the organization, the 340B Program director loses institutional knowledge. Without that know-how, newer members of the team can find themselves reinventing a process each time they prepare for an audit. By automating 340B compliance processes and centralizing the management of dashboards, documents, audits, and compliance performance, everyone across the organization gains working knowledge of how to comply with HRSA requirements.

Read our Five Pillars of 340B Program Compliance blog series where Craig Frost dives deeper into these values.