Comprehensive Pharmacy Services Issues Advisory on Recent OIG Report Critical of 340B Providers with Contract Pharmacy Arrangements

Wednesday, February 12, 2014 10:00:00 AM

340B Providers Bracing for Increased HRSA Audits, New Regulation ("Mega-Reg"), and Congressional Pressure

Memphis, TN – February 12, 2014: The U.S. Office of the Inspector General (OIG)
issued a report last week finding that most healthcare providers surveyed do not follow
recommended independent audit oversight guidelines when contract pharmacies are
used as part of the federal 340B Drug Pricing Program. In addition, OIG found that there
are inconsistencies in identifying prescription eligibility at contract pharmacies, and how
providers avoid duplicate discounts between the 340B program and a state Medicaid
program. The OIG findings led Comprehensive Pharmacy Services (CPS), the nation’s
largest pharmacy services provider that has been involved in the 340B program since its
inception more than 20 years ago, to issue an advisory to help qualifying healthcare
providers cope with what is anticipated to be an increase in audits by the Health
Resources and Services Administration (HRSA) and stricter federal regulations already
in development and expected as soon as June 2014.

"The OIG report has motivated covered entities to find independent auditors and 340B
management experts to assist them in identifying areas of non-compliance and to
recommend corrective actions to help avoid potential penalties and even disqualification
from the 340B program," said Sherry Umhoefer, R.Ph., MBA, Vice President,
Compliance & Regulatory Services for CPS. "In response, the CPS team of 340B
experts issued an advisory on strategies that covered entities can utilize to prepare for
the increased scrutiny and requirements that the OIG report is expected to generate."

CPS is advising all 340B covered entities to consider taking action across three fronts as
the 340B landscape continues to change:

Independent Audits and Reporting: Immediately seek out an independent 340B
auditor, as HRSA guidelines indicate, to audit the 340B program overall, with
additional attention to contract pharmacy arrangements, and require compliance
reports;

Turnkey 340B Management: 340B is complex to manage, administer and comply
with regulations, so healthcare entities that don’t have the in-house expertise
should find an end-to-end management solution for the 340B program, including
preventing diversion and duplicate discounts, providing a complete 340B drug
purchasing and inventory control system, compliance-based software to bring it
all together, and a team of focused program experts; and

Full Retail Pharmacy Outsourcing: For those covered healthcare entities with the
right set of circumstances, it can be advantageous to bring in experts to run an
internal outpatient pharmacy that the healthcare provider owns, thereby avoiding
the need to contract with an outside pharmacy where there is less control over
340B program compliance.


Ms. Umhoefer explained that 340B qualified healthcare providers may contract with
outside pharmacies to fill their patients’ discounted 340B prescriptions, and those
arrangements have rapidly increased in the past few years. According to the OIG,
HRSA's audits have found that some contract pharmacy arrangements violated 340B
program rules. Although the OIG didn't make recommendations in this report, HRSA
has announced plans to propose new regulations, the "Mega-Reg" for the 340B Program,
which may come out as soon as this June.

About Comprehensive Pharmacy Services and 340B Credentials:

Employing over 1,800 pharmacy professionals, CPS is the nation’s largest provider of
pharmacy services to more than 400 hospitals and healthcare facilities leading to
sustainable improved quality and reduced cost. CPS services include pharmacy
consulting, inpatient and outpatient pharmacy management, telepharmacy, transition of
care services, 340B compliance consulting and 340B split inventory management
software. CPS has been actively involved with the 340B program since its inception in
1992, including active participation in Congressional advocacy. As a Corporate Partner
to the Safety Net Hospitals for Pharmaceutical Access (SNHPA), the only organization
devoted to advocacy on behalf of 340B-covered entities, CPS fully supports SNHPA’s
activities aimed at the protection of the program’s integrity. For more information, visit
www.cpspharm.com.

Contact:

Greg Wenthe
Vice President, Marketing
Comprehensive Pharmacy Services
greg.wenthe@cpspharm.com
(901) 748-0470