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340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.
Speaker 1 (00:04):
Welcome to 340B Insight from 340B Health.
David Glendinning (00:13):
Hello from Washington, DC, and welcome back to 340B Insight, the podcast about the 340B Drug Pricing Program. I'm your host, David Glendinning with 340B Health. Our guest for this episode is Mark Capuano with New York City Health and Hospitals.
(00:29):
Although we have referenced 340B audits numerous times on the podcast, we have not yet done a deeper dive into what that audit process looks like for a 340B hospital. The Health Resources and Services Administration audits 200 covered entities each year to ensure compliance with 340B rules, and it is one of the most important elements of the agency's oversight of 340B. We wanted to speak with someone who has significant experience with 340B audits to find out how they work.
(01:00):
Mark is the Senior Director of the Corporate Pharmacy 340B Program and Supply Chain Services at New York City Health and Hospitals. He was one of the experts who spoke about 340B audit readiness during the workshop preceding the 340B Coalition Winter Conference in San Diego. We sat down with Mark after the workshop to get an audit primer for our listeners. Here's that conversation.
(01:24):
I am here with Mark Capuano with New York City Health and Hospitals. We're here at the Exhibit Hall at the 2024 340B Coalition Winter Conference in San Diego. Mark, thank you very much for being here and welcome to 340B Insight.
Mark Capuano (01:39):
Thank you, David. Really appreciate you having me here.
David Glendinning (01:41):
Tell us a little bit, if you could, about New York City Health and Hospitals and the patients you serve.
Mark Capuano (01:48):
New York City Health and Hospitals is the largest municipal healthcare center in the United States. We serve over 1 million New Yorkers annually at our 11 acute care facilities, five post-acute care facilities, and large FQHC network. We also have home healthcare, correctional health, and a health plan called MetroPlus.
(02:10):
The mission at New York City Health and Hospitals is really to provide high-quality healthcare services regardless of a patient's ability to pay, and 70% of our adult population is either on Medicaid or has no insurance at all. We treat a diverse cross-section of New Yorkers, more than 70% of which identify as African-American, Black, Hispanic, or Asian.
David Glendinning (02:34):
This health system is near and dear to my heart. My parents actually met when they worked for Bellevue Hospital in the city in the 1960s, so it's wonderful to have you here representing them.
(02:46):
We're here to talk about something that keeps a lot of covered entities up at night, and that is 340B audits. What can a hospital expect when it first finds out about an audit?
Mark Capuano (03:00):
When a hospital first receives an official HRSA audit notice from the Bizzell Group, this is really the first contact that the organization is going to get, and it will typically go to the authorizing official or primary contact. You'll be asked to fill out an information request form and schedule a pre-site visit call. You'll also be provided the data request list for the information that the auditor is seeking. This is the first notice to the organization that you're going to be having the government on site for a HRSA audit.
David Glendinning (03:30):
Okay. So some of our listeners have gone through audits, some of them maybe not just yet, but give it some time. So let's take each of those elements that you mentioned one at a time if we could. What is the purpose of the information request form that you mentioned?
Mark Capuano (03:44):
It's really a list of questions that the auditor has before the welcome call. It includes items such as what 340B IDs are involved, who's the main contact person for the organization, who's going to be doing the data upload to the NIH portal. It has a number of these housekeeping issues that are in their information request form.
(04:06):
It also allows the hospital to confirm the date of the audit and the details of the on-site visit, and this is really a great platform. If there's major construction going on in your organization, there's something going on that people are going to be out of office, now's your chance to ask the auditor and to kind of relay that information about some sort of extenuating circumstance that you want to let the auditor aware of.
(04:28):
I always recommend that for this type of form and when you're completing this information that you answer timely, accurately, and concisely. This is an opportunity now for you to inform the key stakeholders at the organization. Let those subject-matter experts know, and really start to get folks engaged.
David Glendinning (04:47):
And before that site visit that you mentioned happens, you said there's a call to discuss the audit, presumably. How should a hospital prepare specifically for that pre-visit call?
Mark Capuano (04:59):
The most important thing is to make sure you have the right people on this call, and having the right support on that call. So, for instance, having the authorizing official, primary contacts, just to name a few, hospital billing, reimbursement, legal, compliance, credentialing. But really anybody that's going to be playing a major role in your 340B Program or could add some color to some of these questions, I think that's a good place to start.
(05:27):
Also, you're going to want to be ready with necessary background information about your 340B program and about the pharmacy operations, and be prepared to answer questions and provide follow-up if needed. So if there's a question that you're unable to answer at that time, that's okay. You can get back to the auditor. It's not like everything has to come out during this one call. You'll have the opportunity to provide that information.
(05:50):
One last piece that I would also add is the auditor may be coming from a completely different part of the country. They may be very unfamiliar geographically where you're located. So providing them a plan, a path for that day, who to meet, who was going to greet them at the door when they come in, I think that's really crucial to help set up for a successful audit.
David Glendinning (06:12):
You mentioned the data request list, or DRL. I know that's one of many acronyms we have to deal with in the 340B world. What are some of the kinds of information that these auditors are requesting on that DRL?
Mark Capuano (06:25):
The 340B policies and procedures is definitely a main component of this data request list. This is going to include documentation around how you determine 340B eligibility, what your unique patient definition is, how you avoid diversion, material breach, things of that nature. So the 340B policies and procedures is a document that you should be working on kind of continually, constantly tinkering with, adding. It's a work in progress.
(06:51):
In addition to the policies and procedures, the 340B universe is... This is a very important component of the data request list. What is a 340B universe? It's really anywhere that you're going to have 340B claims. You may have an outpatient pharmacy that fills 340B prescriptions, contract pharmacy, mixed-use area, clean site area. All of these type of areas where there's going to be 340B claims, those are going to make up your 340B universes, and those are going to be where the auditor pulls from the sample.
(07:23):
In addition to the universes, you're going to be requested for provider listings, so NPIs, and that'll be important to stay close with credentialing, purchasing documentation, in-house pharmacy documentation, contract pharmacy documentation, so we're talking about pharmacy service agreements and all the amendments that go along with them. Also, Medicaid fee for service billing documentation to ensure there are no duplicate discounts. And if you're billing out-of-state Medicaid, you'll be required to submit examples of those claims as well.
(07:53):
And the final component, if this is a re-audit, you will also be asked to submit even more documentation, especially if this re-audit was for a previous audit that had significant findings. So you may be asked to have the previous cap and what was involved with manufacturer repayments. So gathering all of that information will be labor-intensive, but it's something you can do in preparation if you know you're having a re-audit.
David Glendinning (08:20):
A lot of paper to wrangle, it sounds like.
(08:22):
I know the site visit itself, very important element of the whole audit process. So what should a hospital do to prepare for that on-site visit?
Mark Capuano (08:31):
Yeah, once you find out that you're having the audit, I think it's a great idea to start securing the conference room, securing the space that you need to have a successful day.
(08:41):
In addition to securing the space, you're also going to want to have IT make sure that the room is set up for success. So, do you have a conference line? Do you have computers? Do you have all of the IT needs that you're going to have to have? Making sure that there's room for key stakeholders to come in and out. You're really going to want to make sure you have the space part down.
(09:03):
Also, three days before the audit, you're going to get the audit samples from the auditor. At this point, now you're going to start digging into those samples, finding out if the 340B eligibility around those samples, developing that narrative and story so that you understand each of those claims, and you can move seamlessly through them with the auditor.
(09:24):
The last part would be to visit key areas of the hospital and the pharmacy that the auditor is going to be going through. So meeting with those folks beforehand, letting them know, and asking them some preparatory questions so that they can be prepared.
(09:39):
Also, having a contingency plan in place. Somebody may call out sick that day, and the person you were expecting to do some of the heavy lifting may not be available. So having a backup, I think, is a great idea and a great process to have in place.
David Glendinning (09:53):
So hopefully, a hospital has prepared as much as possible for that site visit.
(09:59):
When it comes to that big day, what can a hospital expect to happen?
Mark Capuano (10:03):
Yeah, so the auditor will come on site. They'll start tracing those samples to see the journey of a 340B drug to a patient. He or she will dig into those samples and go through them. You're going to want to have all of the key stakeholders available at some point during that day in case there are additional questions. Also, the auditor will assess whether you are following your PMP and how closely and accurately your PMP matches to the operations of your program.
David Glendinning (10:31):
This sounds to me like a lot might be at stake, and there's much to think about. How stressful can the whole process be for a hospital and the 340B staff there when they receive the audit notice?
Mark Capuano (10:45):
It can be very stressful. It's a big deal. It's a major deal for the organization to have the government come on site for a HRSA audit.
(10:52):
What I would say, the best thing you can do is to reframe this. You want to take this as a great opportunity to showcase all of the good work, all of the great things you do to stay compliant all year long, and take that and showcase that to the auditor, in addition to completing all of these tasks that we've talked about. But really reframing it. You have an opportunity here to really hit it out of the park and to do a great job for your organization, for your patients, and to showcase that to the HRSA auditor.
(11:23):
It's very difficult to have an audit without any findings, so just understand that it's a possibility. You could very well have a finding, and that's okay. You'll work through it, and it won't be the end of the world.
David Glendinning (11:35):
I really like that philosophy you mentioned about showcasing all the good work you're doing in the 340B space.
(11:42):
Let's discuss that possibility you talked about with the findings. Obviously, a hospital hopes it never happens, but it probably will if you do this long enough. What happens if a hospital receives findings? What happens after that point?
Mark Capuano (11:56):
Yeah, great question. If a hospital does have a finding, they will have to implement and complete a corrective action plan. HRSA has a great template that they have as a starting point to draft a corrective action plan, and begin that process. I always recommend when drafting these corrective action plans that you involve legal, compliance, potentially outside counsel, and/or 340B consultants. It's never a bad idea when a document is going to the government to have legal take a look. So you're going to want to have a number of different eyes on this document.
(12:32):
Ultimately, you'll provide information about how you can prevent this from happening again. What's the education strategy? What's the communication strategy moving forward to prevent this type of a finding from happening in the future?
(12:45):
Once you create your corrective action plan, and you have it the way you want to have it, you'll submit it to HRSA, and they will either approve or reject the document. If they approve it, you'll move forward. If they reject it, you'll make those minor changes, and you'll update it and resubmit it.
(13:01):
And once HRSA approves your corrective action plan, you then have to go implement that corrective action plan and then submit proof that you've completed it to HRSA.
David Glendinning (13:11):
How many audits have you gone through personally representing New York City Health and Hospitals?
Mark Capuano (13:17):
I've been a part of four HRSA audits now at New York City Health and Hospitals. It's been a really rewarding experience for me. Overall, we've done very well, and I think it is just been a very great learning experience for me.
David Glendinning (13:30):
So, having gone through this a bunch of times, is there any other audit advice you have for health systems and hospitals that receive that notice and go through this?
Mark Capuano (13:40):
What I would say is do as much preparation as you can. You want to pull together all the necessary resources and people. It's going to take a team effort to get this, and to do it the right way. Do test runs of the audit ahead of time, whether that's using your internal processes and strategy or using external auditors, and set clear achievable goals and check-ins along the way.
(14:04):
One of the first things I do is create a tracker of all the information that we have to put together. We have weekly meetings. We track our progress, where we need to improve, where we need to go.
(14:14):
Understanding your role and your team's role, I think, is really important. You have the playbook. You know what's going to be asked of you, so you can do a lot of preparation, and you're relying on your team to be successful.
David Glendinning (14:27):
Excellent. Well, very much appreciate that sage advice. I hope you've put at least some of our listeners at ease about these audits and the prospect of facing them. So Mark, thank you very much for being with us today.
Mark Capuano (14:40):
Thank you so much, David. Really appreciate it. Thank you for having me.
David Glendinning (14:43):
Our thanks again to Mark Capuano for his comprehensive and comforting advice to hospital professionals about 340B audits. We are glad to hear about all the professionals out there who take their 340B compliance commitments so seriously, and we applaud them for this important work.
(15:01):
In an upcoming episode, we will take a closer look at how hospitals work to avoid duplicate discounts, which is one of the key areas of focus for a 340B audit. In the weeks ahead, we will be rolling out that episode and the rest of the interviews we recorded at the 340B Coalition Winter Conference. So please take a moment now to make sure you have subscribed to the podcast, so you can hear those episodes as soon as we release them. We will be back in a few weeks. In the meantime, as always, thanks for listening, and be well.
Speaker 1 (15:37):
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter at 340B Health, and submit a question or idea to the show by emailing us at podcast@340bhealth.org.