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    Helping Small Organizations Meet the 340B Challenge

    Shannon Sumner, CPA, CHCComplying with all the provisions of the 340B Drug Pricing Program (340B) is a complex, rigorous undertaking – even for large, well-staffed hospitals and health systems. It’s equally burdensome for facilities that are small and have limited resources such as critical access hospitals (CAHs), federally qualified health centers (FQHCs), HIV/AIDS program grantees, and others.

    Many of these smaller organizations rely on the 340B program in order to continue serving their communities – and they can’t afford the penalties for noncompliance, like having to make repayments to drug manufacturers or possibly being removed from the program entirely.

    FQHCs provide vital services to the homeless, migrant workers, and residents of so-called “pharmacy deserts” – communities that lack even a single retail or clinical pharmacy. CAH facilities are aptly named because they provide critically needed access to care for rural patients – and many don’t have the resources for an onsite pharmacy. Both types of covered entities frequently contract with retail pharmacies, which sends up red flags for possible audit of their 340B programs.

    Unfortunately, 340B compliance is getting more complicated and time-consuming every year. The Health Resources and Services Administration (HRSA) will soon be finalizing its 340B “Mega Guidance,” which will make the task even more challenging.

    But here’s the good news for these smaller organizations: they just need a little help on the front end in order to become self-sufficient in 340B compliance. Once a control structure is in place, the job gets much easier. But it’s imperative for these organizations to get the baseline assessment and training needed to create a strong foundation for compliance.

    How The Program Has Evolved

    The 340B program establishes a mechanism for eligible safety-net healthcare providers to purchase drugs for certain outpatients at a significant discount. The safety-net providers get the benefit of any savings and revenue from the discount. Drugs purchased at the reduced prices may be provided only to eligible patients.

    Critics of the program contend it is not currently serving its purpose because some of the providers who participate (and benefit from the savings and revenue) actually provide little benefit to indigent populations. The program’s supporters, on the other hand, generally support a tightening of program oversight, but maintain that the program does in fact provide additional revenues to safety-net providers so they can better serve their communities.

    Shannon Sumner, CPA, CHC
    Shannon Sumner, CPA, CHC, is a consulting principal at PYA (Pershing Yoakley & Associates), a healthcare consulting firm serving clients ...

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