Crafting Compliant 340B Policies and Procedures

Crafting Compliant 340B Policies and Procedures

The success of a Federally Qualified Health Center's (FQHC) 340B Program hinges on robust and compliant policies and procedures. These foundational documents guide day-to-day operations and are crucial in defining 340B eligibility, addressing potential breaches, and establishing monitoring processes. Our team conducts comprehensive reviews for FQHCs to strengthen their 340B compliance through definitive policy and procedure language.

Policy vs. Procedure: Striking the Right Balance

FQHCs must strike a delicate balance when drafting policies and procedures. Policies should be high-level, articulating overarching principles that remain consistent over the long term. On the other hand, procedures delve into the specifics of daily operations, providing detailed guidance.

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Material Breach Threshold: Setting the Bar

HRSA expects covered entities to establish a material breach threshold and comply with the parameters they have outlined in policy. Some may opt for a fixed dollar amount, while others choose a percentage-based strategy tied to annual 340B drug spend. A commonly used material breach threshold is 5% of annual 340B drug spend that does not self-correct within six months. If an instance of 340B non-compliance is identified, it should be tested against the material breach threshold in the entity’s policy to determine if the violation needs to be reported to HRSA. It is important to note that any diversion or duplicate discount violations must be resolved with the manufacturer. However, only those that match the covered entity’s definition of a material breach need to be reported to the Office of Pharmacy Affairs to implement a corrective action plan.

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Nuisance Threshold: Drawing the Line

Another often-overlooked element for inclusion in policy is the nuisance threshold, a concept that can be adapted from manufacturer practices. Defined separately from the material breach threshold, the nuisance threshold allows covered entities to define a level of repayment that becomes a nuisance for the manufacturer. Operationally, this may look like tracking deviations of $5 or$10 until they accumulate to meet the nuisance threshold of $100 before initiating repayment with the manufacturer.

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340B Eligibility: Beyond the Basics

Defining an organization's 340B eligibility goes beyond merely stating eligibility criteria. FQHCs must register their sites on the OPAIS database, ensuring alignment with the Electronic Handbook (EHB) and proper documentation of services categorized under EHB Forms 5A, 5B, and 5C. It is important to note that sites that fall under Form 5B are registrable on the OPAIS database, so if340B drugs may be prescribed from or administered in a location listed on Form5B, that location should be registered on OPAIS in the next quarterly registration window. Compliance with these forms, especially outside of physical locations, such as scope of services listed on Form 5C, requires meticulous record-keeping to substantiate 340B eligibility during HRSA audits.It is crucial to ensure that you are qualifying these prescriptions as 340B eligible through documentation in the medical record to demonstrate your ongoing responsibility of care for your patients in the event of an HRSA audit.

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Adapting to Emergencies: State of Emergency Policies

In response to the COVID-19 pandemic, HRSA added expectations for covered entities to address emergencies in their 340B policies and procedures. This area is now a policy requirement specifically called out in the HRSA audit Data Request List (DRL).The Office of Pharmacy Affairs published information that covered entities could use to help adapt policies and procedures in response to the nationwide emergency, including addressing abbreviated medical records, volunteer health care professionals and their credentials, and offering services from non-registered sites, such as parking lots. Special 340B registration windows may open during emergencies, enabling covered entities to expand their program and allow flexibility during uncharted times.

In addition, theCOVID-19 pandemic highlighted the importance of tele health. FQHCs should explicitly state that tele health is an appropriate care delivery method in their policies and procedures, provided it aligns with their scope of grant.Telehealth can make prescriptions eligible for 340B during public health emergencies, emphasizing the need for documentation to meet program requirements.

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Entity-Owned Pharmacy Policies: A Legal and Contractual Imperative

 Crafting specific policies and procedures for entity-owned pharmacies is crucial. Some are required by law, and others are required by contracts with pharmacy benefit managers, also known as PBMs. We recommend implementing access and security policies first and foremost. Access and security policies must be clear, ensuring only authorized personnel have entry. Additionally, pricing policies should align with 340B requirements, with considerations for state, federal, and local laws. If available within your covered entity’s pharmacy software, automation of pricing methods can streamline compliance efforts, reducing the often very labor-intensive and manual pricing methods.

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With decades of expertise in FQHCs, our team offers compliant policy and procedure templates to guide you through this critical aspect of 340B Program management. Contact us today to learn more about these templates and to ensure your FQHC's continued success in navigating the intricacies of 340B compliance within your policies and procedures.

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_{FQHC 340B Compliance is the dedicated partner for Federally Qualified Health Centers seeking assistance with the 340B Program. Their mission is to provide the necessary resources to secure and optimize the 340B Program, enabling health centers to offer more comprehensive services to those in need. With a focus on improved compliance and oversight, they act as more than just consultants or automated systems, tailoring their services to meet your health center's unique needs. Visit their website, call (760) 780-7469, or email admin@fqhc340b.com to learn more about FQHC 340B Compliance and how they can help your health center thrive.}