340B health systems have been under increasing scrutiny and regulatory oversight in recent years. The Health Resources and Services Administration (HRSA) has indicated that it plans to increase the number and complexity of 340B program audits it conducts. Here’s how your health system can prepare every aspect of your 340B program for compliance reviews.
340B Compliance Overview
In general, there are three broad initiatives that all covered entities can undertake to ensure they maintain 340B compliance in the new regulatory environment:
Fortify your hospital’s internal 340B policies and procedures
- Review and update your policy manuals to incorporate the latest 340B program requirements and options.
- Have your 340B team conduct regular compliance-education and training for your hospital’s providers and staff.
- Routinely conduct self-audits to identify and address any compliance gaps in your 340B program.
Upgrade your 340B documentation practices and technology
- Take every necessary step to ensure the accuracy of your records for 340B patient eligibility and drug dispensing.
- Automate your 340B program with customized software that can streamline documentation and reporting, while providing analytic insights that enable you to identify trends impacting your program’s compliance and optimization.
Engage in proactive communications with 340B program stakeholders
- Maintain transparent relationships with drug manufacturers and wholesalers, to demonstrate your commitment to full 340B program compliance at all times.
- At the same time, stand-up for your hospital’s legal 340B rights by supporting 340B advocacy associations and supportive legislative initiatives.
Our detailed 2025 checklist for maintaining 340B program compliance
It goes without saying that the 340B program is complicated. So complicated, in fact, that we’ve yet to serve or encounter a 340B health system with the in-house capabilities necessary to optimize their program’s savings and revenue, while maintaining full compliance; and that includes covered entities with multiple employees managing and monitoring their 340B program full-time.
Since late 2019, VytlOne has managed the 340B programs of 21 health systems — collectively generating well over $500 million in savings for our clients — and not once has a client of ours ever been fined for a 340B violation.
Below is our team’s 340B compliance checklist:
POLICIES AND PROCEDURES
- Establish a 340B committee representing multiple levels of hospital cohorts and departments, to understand and issue guidance on 340B-related issues.
- Ensure that all personnel serving your hospital’s 340B patients (and/or dispensing 340B prescriptions) have access to your health system’s written 340B program policies and procedures.
- At the same time, make sure that your 340B-related program’s policies are consistent with your health system’s general policies and procedures.
- Keep current, at all times, on the latest information published on the HRSA 340B database.
- Routinely reference 340B news and thought-leadership resources for any and all updates to 340B legislation and regulation.
- Develop active information-sharing relationships with other 340B health systems equally committed to maintaining compliance best practices.
- Establish a regular schedule for reviewing and updating your 340B policies and procedures.
STAFF SUPPORT AND EDUCATION
- Educate your providers and support staff members on 340B program regulations, as well as your hospital’s policies and procedures.
- Create a Governance Committee that meets regularly to review all aspects of your 340B program.
- Maintain open lines of communication between your 340B compliance experts and your providers, ensuring that physicians and staff can get answers whenever they need them.
TECHNOLOGY AND DOCUMENTATION
- Install and maintain specialized 340B software — ensuring that all data regarding your billing units and other mapping functions is constantly kept up-to-date.
- Take whatever steps are necessary to ensure the accuracy of your provider files, as well as National Drug Code crosswalks and location maps for all 340B contract pharmacies in your network.
- Conduct regular checks to ensure that your 340B inventory management and tracking procedures are compliant.
- Conduct regular chart audits to prevent inadvertent diversions or duplicate discounts. Remember: 340B prescriptions are not eligible for additional Medicaid pricing discounts.
- When applicable, ensure that your program is compliant with HRSA’s 340B GPO prohibition.
- Make sure all patients given 340B prescriptions are eligible. For more information on patient eligibility, click here to review our article on the topic.
PROGRAM IMPACT / PUBLIC RELATIONS
- Thoroughly document the value of your 340B program, both to your health system and to the community you serve.
- Moreover, keep detailed records of the additional healthcare services your 340B revenue has enabled your health system to offer your patients.
AUDIT PREPARATION
- Routinely conduct internal audits of your 340B program.
This final point is worth repeating: Routine self-audits are critical to ensuring your program’s compliance. Those audits should include all contract pharmacies in your program — as well as your in-house retail and specialty pharmacies. You should also review your 340B database quarterly, and consider conducting mock HRSA audits, at a minimum, annually.
What to do when internal 340B audits identify non-compliance issues
Your first step will be to reach-out to impacted manufacturers. Before you do, proactively prepare solutions to the issues you’ve uncovered; solutions for the manufacturers and their wholesalers. This not only demonstrates your commitment to compliance, it significantly increases the likelihood of a speedy and amicable resolution.
At the same time, you’ll need to send the HRSA Office of Pharmacy Affairs a written report of your 340B audit findings. That report should include the following:
- Your 340B ID
- The violation(s) you uncovered, and what caused the non-compliance
- A detailed corrective action plan (CAP) for addressing the problem, and preventing its recurrence moving forward
- Your plan for informing affected manufactures, including proposed financial remedies and a timeline for implementing your CAP.
How likely is it that your 340B health system will be audited?
Since 2015, HRSA has conducted roughly 200 340B audits annually. That said, HRSA reported on June 17 that it had conducted 163 audits — which would equate to 356 audits for all of 2025, assuming it maintains its current rate for the rest of the year.
Manufacturers are legally entitled to audit 340B entities. However, since those audits require HRSA approval, they’re extremely rare. Another likely reason for the rarity of those audits is the potential for manufacturers to expose themselves to being audited. In fact, according to an article published June 10 by 340B Report, HRSA has conducted three audits of drug manufacturers this year, and — in every instance — found that the manufacturers audited were overcharging 340B entities.
What are the consequences of 340B non-compliance?
In addition to the aforementioned repayments to manufacturers and the required CAP report, HRSA publicly discloses audit findings on its website — which can harm your health system’s reputation; particularly with other providers, partners and grant funders.
Moreover, if HRSA suspects your hospital of fraud or criminal misconduct, it can refer the case to the following authorities:
- HHS Office of Inspector General (OIG)
- Department of Justice (DOJ)
- State Medicaid programs
In cases of egregious or repeated violations, HRSA may remove the entity from the program altogether. Needless to say, termination can seriously impact the financial viability of a covered entity — especially safety-net providers.
The good news for 340B entities
While non-compliance findings are actually fairly common among entities subjected to HRSA 340B Audits, termination of those entities from the 340B program are extremely rare. In fact, since 2020, only one health system has been removed from the 340B program (The University of Chicago Medical Center) — while the handful of other entities subjected to termination were typically limited to contract pharmacies or off-site facility registrations.
Additional factors impacting 340B compliance in 2025
Technology and 340B data transparency requirements
New scrutiny from lawmakers and regulatory agencies is prompting calls for better recording, tracking and reporting of 340B drug use and patient eligibility — making it even more complicated for 340B health systems to maintain full compliance.
More than ever, hospitals need to be ready at all times to document how their 340B programs align with patient care goals and the overall intent of the 340B law. All of which is why the need for customized, analytics-driven technology has never been more critical to ensuring 340B compliance, while still optimizing prescription savings opportunities. At the same time, the need for seasoned experts managing your health system’s technology — as well as your 340B program — has never been greater.
Learn More:
Empower Your Health System’s 340B Program With Analytics
Specialized Software Can Only Do So Much For 340B Programs
On-campus retail & specialty pharmacies
Operating an in-house retail or specialty pharmacy can dramatically enhance your hospital’s 340B savings, while keeping more of your 340B prescriptions, and your compliance efforts, under your direct control. Just as importantly, owning in-house retail and specialty pharmacies ensures that care for your 340B patients, and your employees, stays local — within your system, in your own community — which is where it should be.
To learn how your health system can fund and manage successful on-campus 340B retail and specialty pharmacies, click here
Compliance and operational strategy
340B hospitals with in-house pharmacies (particularly specialty pharmacies) are in a stronger position than those using contract pharmacies — both with compliance and operational strategy — but it’s critical to stay proactive.
For instance, you can proactively strengthen your 340B program’s position in audits by demonstrating that your retail and specialty pharmacies enhance your health system’s Patient-Centered Services — by, for instance, supporting improved adherence, lowering your total cost of care, and improving outcomes.
READMISSION REDUCTION
One proven step your hospital can take is to implement an effective program for reducing your rate of 340B patient readmissions.
For Further Reading:
How To Achieve Readmission Reduction, One Patient At A Time
340B PROGRAM INTEGRATION
By fully integrating your 340B program into your health system’s continuum of care, you can expand and improve on your mission of supporting better health for your entire community.
For Further Reading:
How To Use Your 340B Program As a Community Health Engine
VytlOne’s checklist for onboarding 340B hospital clients
Carve-in or Carve-out?
If you haven’t already registered your entity for the 340B program, you’ll be asked to choose to Carve-In or Carve-Out for Medicaid fee-for- service (FFS) — a decision which will apply to all of your Medicaid FFS patients. Choosing Carve-In means you will use 340B-priced medications with your Medicaid FFS patients. Carve-Out means you won’t use 340B-priced medications with your Medicaid FFS patients. In each situation, you must challenge your team to adhere to policy, and minimize any likelihood of duplicate discounts.
Connecting with your system’s providers
In most 340B hospitals, in-house personnel are simply incapable of managing all the responsibilities that produce well-run 340B programs. Many of the health systems we now serve had provider lists that were years outdated. When we initiate 340B support for a new health system, we review their current provider list, then:
- Confirm which providers on the list are still working with the hospital.
- Eliminate any providers no longer with the system.
- Identify all system providers not on the list.
- Reach-out to every provider on the updated list, helping ensure they understand how to take full advantage of the 340B savings opportunities available to them and their patients.
- Send the newly-updated provider list to all of the hospital’s TPAs.
Retrieving your 340B eligible-script data
During this phase, our data team works with your data team to assemble and deliver your historical 340B-program files. Once that process is complete, your hospital’s script data is automatically fed into our system in a format ready to be qualified OR (in many instances) re-qualified. VytlOne will then re-qualify all of your past 340B prescriptions that are worth re-qualifying, as far back as 12 months prior to our onboarding.
Establishing communication lines between our 340B team and yours
Moving forward, our 340B team leaders will conduct twice-weekly calls with your health system’s team leaders. During Monday calls, we focus on 1) 340B activity on your end, and 2) Fielding any questions or concerns your team might have.
We’ll then spend the next three days addressing your team’s questions and concerns. During Friday calls, we’ll review what we’ve accomplished together that week.
How Can VytlOne Help Your Health System?
To learn more, contact Howard Hall any time. C: 214.808.2700 | howard.hall@vytlone.com
