Three Actions Entities Can Take to Improve the HRSA Audit Process.
I have been really reflecting on the burden/stress that HRSA’s audits have on covered entities—something that gets lost in all of the misinformation campaigns about non-compliance and lack of oversight—and want to elaborate on it more. First, Rx|X works with around 100 hospitals, primarliy Academic Medical Centers (AMCs) that are large and very complex. The investments these clients, along with the industry at large, have made toward program compliance is intense. There are so many moving parts and details in 340B that those involved in program operations have to understand rules and regulations far beyond 340B. For example, our clients need to understand how cost reports are calculated, how the IPPS and OPPS billing programs work, and how professionals are credentialed, just to name a few. When a client receives a HRSA audit notice, it is all hands on deck for an average of 6 weeks to prepare for the two day on-site audit. Although HRSA is very focused on issuing findings on things that are black and white (addresses and NPIs) versus things that are up for interpretation, it does not mean that the audit is not still intense. The threat of a HRSA audit definitely achieves its goals in keeping 340B entities on their game.
But, things could be better for all stakeholders. Entities need more details on the test and how to succeed. I do not know a single entitiy who would not want an “A+”. With clear expectations and metrics, HRSA auditors could have an easier time on-site when tracking information and communicating it to HRSA. Manufacturers are requesting transparency into HRSA’s oversight.
Here are three actions aimed at a more productive audit process that I would love to see from 340B Covered Entities:
Advocate for better training and resources from HRSA on audit expectations. This is particularly critical for OPAIS Registration and the Medicaid Exclusion File, the two biggest issues cited. HRSA should be actively engaged with entities so that they pass what should be an easy test. Have educational webinars. Allow for more technical support around specific questions that can’t be answered with a Standard Response Guide. For example, hospitals stuggle to draw clear lines when registering child sites when HRSA uses the term “clinic/service/department” interchangeably. We have some clients with findings for not registering services separately while one just got a finding for being “too detailed” in their registration!
There is further zero guidance about how to decide when to add out of state Medicaid. Most entities are crowd sourcing claims with Billing and adding States to cover their bases, but do not have any feedback on what is even recommended from HRSA. It is not worth rostering a State with a one-off Medicaid claim; however, the risk is HRSA finding the exception and issuing a finding. One client is currently challenging an interesting situation where there was one inpatient claim billed to an out of state Medicaid plan not listed on the MEF. The State itself confirmed, “this is an inpatient claim where no line item is billed and where no rebate is expected.” Yet the entity needs to invest precious time and resources that could have been avoided had HRSA just said what they expected.
Share information on audit experience to help dispel misconceptions of systemic fraud and abuse. HRSA‘s published audit findings provide no context on severity or impact, thus perpetuating this idea that every finding is weighted equally. We know it might be difficult to publicly discuss your audit, but communicating through advocacy groups or anonymized through your consultant, we can bring more awareness to what is really being “found”. It would also be very helpful to track costs for audit preparation to estimate the burden of a HRSA audit versus what was found. There is too much noise around entities not investing in program compliance when the reality is the opposite.
Challenge findings, regardless of size. It is important to have your voice and experience as part of the record, whether they are reversed or not, or whether such challenge is public or not. HRSA often issues findings of “Potential Duplicate Discount—Incorrect MEF listing” but, has not (since 2012) even sent an inquiry to the potentially impacted State to validate whether there actually was a problem. There is not a check between sister agencies. Instead, they leave this responsibility to the entities, so this type of finding needs to be investigated and pushed back against. We have found that, at the very least, HRSA can reduce the finding to “Incorrect MEF listing, no duplicate discounts.”
For example, we are fighting a finding for a client with an out of state Medicaid claim for a drug that the State has formally declared is not covered by Medicaid and where a public search of a CMS website shows that zero rebates were requested for that State and NDC. Covered entities have complicated billing requirements they need to follow, so clear and concise guidelines from HRSA should be posted on the website along with training manuals.
340B oversight is alive and well, but these actions could really help to improve the process for all stakeholders.