HRSA Audit Updates: Why is this Important?

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HRSA Audit Updates: Why is this Important?

An update about new demands from HRSA for 340B Covered Entities in 2019

HRSA changed a few things required of Covered Entities (CE) during audits. Here is the list of changes:

  • Hard Copies (faxed, emailed) of all contract pharmacy prescriptions being audited.
  • In mixed use - UB04 form used to bill a Medicaid bill, one auditor asked for one example for each state billed.
  • Review of providers seen in audited records for eligibility during the audit period.
  • Require the Primary Contact (PC) demonstrate knowledge of maneuvering in OPA website, add/change child site.
  • Extensive Review of Internal Auditing, matching process with P&P.
  • Review of Accumulators
  • Copy of an invoice from all accounts
  • A List of blocked Drugs in the split billing software.
  • Review BUPP (unit of dispense) to see if it matched usage.
  • An accumulator review.

Knowing what HRSA is likely to review helps each CE be better prepared when they are audited.  In addition, several of the new items require close cooperation with your billing/business office, and expands the numbers and types of disciplines involved in the actual audit. (Previously the business office was not always involved.)

So, please take a few minutes to review this blog, and determine what, if anything, your CE needs to do to be ‘Audit Ready’.

General and MCR/OPA Website Info

Familiarity with the OPA Website

In recent audits, the Auditor asked the Primary Contact to log into the OPA website and show how they would make a child site addition or change. 

Medicare Cost Report

Although crosswalks between the trial balance and the MCR have been requested for a while, this is what HRSA says now.   “The DRL defines the trial balance crosswalk to include “the name of each offsite outpatient facility, the routine service line number on the MCR Worksheets A and C, the department code, and the location code or shorthand used to identify the site in the electronic health record (EHR).”

The Government Official

The new focus on the Government Official is best defined here, “Provide a copy of the contract with the government to provide care to low-income people and “if the hospital is owned or operated by the government or granted governmental powers, to include documentation showing the ownership or government powers.

Be careful to pay particular attention to this.  We’re finding a fair number of Entities do not have updated agreements in place, and this is a mandatory requirement to participate in 340B.


More Hard Copies Are Requested 

Contract Pharmacy Prescriptions

On the morning of the first day of the audit, the auditor will provide a list of contract pharmacy prescriptions and request a copy of each prescription to be emailed/faxed from the contract pharmacy.  This is new, in that the auditors are asking for all copies, not a sampling as they had done in the past.

Copies of Bills

The auditor will also ask for a copy of a bill (UB04 form) from each clinic/child site/parent billing CMS.  This proved somewhat problematic for a few entities we know.  We urge everyone to discuss this new requirement with your billing/business office to ensure there is a mechanism in place to generate these forms when requested.

Copies of Invoices

We are seeing some requests for a single invoice from each wholesaler account.  The auditors use this to verify the shipping/billing address.

Provider Records

In a recent audit, the HRSA auditor validated each provider from the Transaction Review.  Although there were a total of sixty-six transactions, repeat Rx’s by providers dropped that number down to a review of only twenty-one providers in Medical Affairs.  The validation was that the provider was an active provider at the time of the transaction.  We encourage you to discuss this with your Medical Affairs manager so they may anticipate being called on in an audit.


A Closer Review to Validate the Staff Adheres to the P&P

Sometimes it seems we stress the Policies and Procedures a lot, but the HRSA auditors put a tremendous value on the P&P and they are spending more time verifying if processes match the P&P. In one recent audit, the Auditor asked one of the clinic buyers what they did if their high-cost item count (non-controlled) did not match what the inventory program said it should be, and they buyer ‘blanked’ on an answer.  The fact was, that had never happened to the buyer, and she forgot she would just tell her manager, which was what the P&P specified. We expect to see a CAP to show how to the processes may better fit the P&P.

This is especially important in adhering to the P&P for internal auditing.  In recent audits, more attention was spent on checking that the internal audit process matched the P&P. 


And Speaking of P&P

Speaking of P&P:  We pointed out in a broadcast email on October 16, 2018 that these changes were going into place, and now they are:

  1. Definitions for exclusions to the definition of a covered outpatient drug (covered by our blog at this LINK.)
  2. Documentation of how you manage wastage of drugs – you can get some pertinent info at this blog LINK.

Contract Pharmacy Changes

There are new details required on the Agreement between the Entity and the Contract Pharmacy. HRSA wants the agreements to be very specific.  This is handled by: “Provide the current contracts that individually identify each [covered entity (CE)] location by name and address or have a general statement that inclusively identifies the parent and all CE location(s) participating in the contract pharmacy arrangement”.

This means either a new agreement or an addendum.  We’ve heard of pushback from two or three contract pharmacy systems, but refer them to your CPS 340B Consultant if they have questions.


Split Billing/Third Party Administrator Software

There is an increasing amount of attention paid to how well staff manages the TPA/split billing software.  Auditors will ask to see the accumulators, what drugs are blocked, what cost centers are blocked, and how mismatched NDCs are managed.  They also checked a few units of dispense (BUPP) to validate there was no over/under accumulation from a bad multiplier. There was also a match of usage to purchases over a multi-month time period.



While some of these changes seem less than urgent, they are requirements of the 340B program, and as such, need to be addressed as soon as your workload allows.  And as always, please reach out to your Friendly Neighborhood CPS 340B Consultant for questions.


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