Hospital 340B Drug Pricing Program Compliance & Optimization

Hospital 340B Drug Pricing Program Compliance & Optimization

The 340B Drug Pricing Program allows eligible covered entities — including disproportionate share hospitals, children's hospitals, critical access hospitals, and rural referral centers — to purchase outpatient drugs at significantly discounted prices. For qualifying hospitals, 340B savings can represent tens or hundreds of millions of dollars annually — savings that the statute requires be used to provide more comprehensive services to more patients and enhance the hospital's ability to cross-subsidize care for low-income patients.

Hospital 340B programs are more complex than those operated by FQHCs and other covered entities — because hospitals have multiple patient care sites, complex patient definition rules, and the challenge of managing 340B eligibility across a large and geographically distributed outpatient network. HRSA audits of hospital 340B programs have found high rates of noncompliance — primarily related to patient definition, duplicate discount prevention, and contract pharmacy oversight — making proactive compliance management essential.

Service Areas

340B Eligibility Assessment & Program Structure

Assessment of your hospital's current 340B covered entity eligibility, identification of all eligible covered entity types (DSH, children's hospital, CAH, rural referral center), and evaluation of your current program structure relative to HRSA requirements.

Child Site Registration & Management

Hospital 340B programs can extend to off-site outpatient clinics and provider-based departments — but only if those sites are properly registered with HRSA as child sites of the parent covered entity. We assess your current child site registration, identify unregistered sites that may be eligible for inclusion, and manage the child site registration process.

Patient Definition Compliance

The 340B patient definition for hospitals is more complex than for other covered entities — requiring that the patient have a visit with a provider who is employed by or under arrangement with the hospital, and that the hospital be responsible for the care provided. We conduct patient definition compliance audits and build the monitoring systems needed to ensure that 340B drug purchases are made only for patients who meet the definition.

Duplicate Discount Prevention

The duplicate discount prohibition — which prevents manufacturers from providing both a 340B discount and a Medicaid rebate for the same drug transaction — requires that hospitals have systems to prevent 340B drugs from being billed to Medicaid fee-for-service in a way that triggers a rebate. We assess your current duplicate discount prevention systems and implement compliant carve-in or carve-out billing strategies.

Contract Pharmacy Compliance

Hospitals that use contract pharmacies to dispense 340B drugs must have written agreements, oversight systems, and monitoring processes that meet HRSA requirements. We assess contract pharmacy arrangements, review third-party administrator oversight, and build the compliance monitoring framework needed to manage contract pharmacy relationships defensibly.

HRSA Audit Readiness

HRSA audits of hospital 340B programs are structured and document-intensive. We conduct mock HRSA audits — reviewing the documentation, data systems, and program management practices that HRSA auditors examine — and produce a written readiness report with specific corrective actions.