Data-Driven Insights

Troubling Results of HRSA’s 2015 Program Integrity Audits Posted on November 25

December 16, 2015   |   Dave Weiss

While we applaud the Health Resources and Services Administration (HRSA) for its efforts to create more transparency in the 340B program through its proposed guidance and program integrity initiative, a quick inspection of the 2015 audit results posted on the Office of Pharmacy Affairs (OPA) website is deeply concerning.

As part of this report, HRSA audited 137 covered entities in 2015, which was a 30% increase above 2014. If the results are extrapolated to the universe of 30,000+ covered entities (and their associated contract pharmacies) then the level of potential abuse is far worse than even its harshest critics could have guessed.

Only 40 of the 137 audited entities (29%) had no adverse findings. Of the remaining 97 covered entities, there were approximately 160 adverse findings or nearly two findings per audit. The chart below summarizes the types of adverse findings encountered.  Clearly, manufacturers need to be aware of the high levels of diversion, duplicate discounts, and Group Purchasing Organization (GPO) prohibition violations encountered in the program.

2015 OPA Audit Results

340B table             

While it is difficult to quantify the total value lost, IntegriChain encourages each manufacturer with significant 340B business to start monitoring channel sales transactions and chargebacks activity more closely for potential malfeasance. Though the master data work is substantial, the benefits of visibility, prioritization of manufacturer audits, and potential revenue recovery would be substantially greater than previously thought.

IntegriChain has made a number of investments in data science techniques and master data management to fill in gaps in the 867 reporting of 340B transactions. In addition we provide analytical dashboards that show the purchase trends of both the 340B and commercial lines of business within covered entities, classes of trade, and individual outlets including contract pharmacies. Please contact me or your IntegriChain representative for more information.

 

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