Question 1

What is the 340B Drug Pricing Program?

Accepted Answer

The 340B Drug Pricing Program is a federal program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations (covered entities) at significantly reduced prices. The program enables covered entities serving vulnerable populations to stretch scarce federal resources, reaching more eligible patients and providing more comprehensive services. Covered entities include federally qualified health centers (FQHCs), disproportionate share hospitals (DSH), children's hospitals, Ryan White clinics, and other safety-net providers.

Question 2

Who is eligible to participate in the 340B program?

Accepted Answer

Eligible covered entities include: federally qualified health centers (FQHCs) and look-alikes, Ryan White HIV/AIDS clinics, disproportionate share hospitals (DSH), children's hospitals, critical access hospitals, sole community hospitals, rural referral centers, free-standing cancer hospitals, tuberculosis clinics, black lung clinics, hemophilia treatment centers, urban Indian organizations, and certain federal grantees. Each entity type has specific eligibility criteria that must be met and maintained throughout program participation.

Question 3

How much can covered entities save through 340B pricing?

Accepted Answer

Savings vary significantly based on entity type, patient population, drug mix, and program operations. Typical savings range from 25-50% off wholesale acquisition cost (WAC) for most drugs, though discounts can be higher for certain medications. Annual 340B savings for covered entities range from hundreds of thousands to millions of dollars depending on program size and scope. These savings must be used to benefit eligible patients and support the covered entity's mission.

Question 4

How do I enroll my organization in the 340B program?

Accepted Answer

Enrollment requires registering through the HRSA 340B Office of Pharmacy Affairs Information System (OPAIS). You must verify eligibility, designate an authorizing official, complete the online registration, submit required documentation, and attest to program compliance. The process typically takes 2-4 months from initial application to approval. CareBridge's Readiness & Risk Review service helps organizations prepare for successful enrollment by validating eligibility, identifying documentation gaps, and ensuring compliance infrastructure is in place before submission.

Question 5

What is a child site and how do I register one?

Accepted Answer

A child site is an off-site outpatient facility registered under a parent covered entity's 340B program. To qualify, the child site must be: listed on the parent entity's most recent audited cost report, reimbursable under the parent entity's arrangement, an integral part of the covered entity (not independent), and providing healthcare services consistent with the parent entity's scope. Registration requires submitting documentation through OPAIS demonstrating these relationships. Common rejection reasons include inadequate cost report listing, unclear reimbursement relationships, and insufficient integration evidence.

Question 6

How long does 340B enrollment take?

Accepted Answer

Initial enrollment typically takes 2-4 months from application submission to approval, though timelines vary based on entity type, documentation completeness, and HRSA review capacity. Incomplete applications or eligibility questions can extend the timeline by 3-6 months or more. Child site registrations generally process faster (4-8 weeks) if documentation is complete. Organizations should begin preparation 6-12 months before their desired program start date to allow adequate time for readiness assessment, policy development, and application preparation.

Question 7

What is drug diversion and how do I prevent it?

Accepted Answer

Drug diversion occurs when 340B-purchased drugs are dispensed to ineligible patients or used outside the covered entity's scope. Prevention requires: clear patient eligibility criteria aligned with HRSA guidance, robust patient registration and verification processes, prescription validation confirming provider relationships, dispensing location controls and inventory segregation, regular audits and exception reporting, and comprehensive staff training. Diversion violations can result in program termination and financial liability, making prevention controls essential for compliance.

Question 8

What is the duplicate discount prohibition?

Accepted Answer

The duplicate discount prohibition prevents manufacturers from providing both a 340B discount and a Medicaid drug rebate for the same drug. Covered entities must implement systems to prevent Medicaid claims for 340B-purchased drugs or ensure manufacturers receive rebate information. Common approaches include submitting Medicaid Exclusion Files to state agencies, using claims-level billing codes (UD modifier), configuring pharmacy systems to prevent Medicaid billing, and maintaining robust contract pharmacy oversight. The rule applies primarily to Medicaid fee-for-service; managed care populations are generally exempt.

Question 9

How do I prepare for a HRSA 340B audit?

Accepted Answer

HRSA audits evaluate eligibility, patient definition, duplicate discount prevention, and diversion controls. Preparation requires: maintaining comprehensive policies and procedures, conducting regular self-audits, training staff on compliance requirements, documenting all program activities, organizing records for easy retrieval, validating child site eligibility, reviewing contract pharmacy oversight, and ensuring duplicate discount safeguards are functioning. Audit-ready organizations maintain ongoing compliance infrastructure rather than scrambling when audit notification arrives. CareBridge's Compliance Enablement service helps organizations build sustainable audit preparedness frameworks.

Question 10

What is a contract pharmacy arrangement?

Accepted Answer

A contract pharmacy arrangement allows covered entities to dispense 340B drugs through external pharmacies rather than maintaining in-house pharmacy operations. The covered entity contracts with retail or specialty pharmacies to dispense 340B medications to eligible patients. Contract pharmacy arrangements require written agreements, oversight mechanisms, duplicate discount prevention coordination, diversion controls, and compliance monitoring. Recent manufacturer restrictions have limited contract pharmacy access for some covered entities, requiring strategic planning and policy monitoring.

Question 11

How many contract pharmacies can I use?

Accepted Answer

HRSA does not limit the number of contract pharmacies a covered entity can use. However, many drug manufacturers have implemented restrictions limiting contract pharmacy dispensing, often to one or a small number of pharmacies per covered entity. These manufacturer-imposed restrictions vary by company and continue to evolve through litigation and policy developments. Covered entities should track manufacturer policies, assess operational impacts, and adjust contract pharmacy strategies accordingly. Unlimited contract pharmacy access remains available for drugs from manufacturers not imposing restrictions.

Question 12

What oversight is required for contract pharmacies?

Accepted Answer

Covered entities must maintain adequate oversight of contract pharmacy arrangements, including: written agreements defining responsibilities, regular audits and compliance monitoring, duplicate discount prevention coordination, diversion control implementation, claims data reporting and transparency, staff training and communication protocols, and documentation of oversight activities. HRSA expects covered entities to ensure contract pharmacies comply with all 340B requirements as if the covered entity were dispensing directly. Inadequate oversight is a common audit finding.

Question 13

How can I use 340B savings?

Accepted Answer

340B savings must benefit eligible patients and support the covered entity's mission. Common uses include: expanding access to care for underserved populations, enhancing pharmacy services and medication therapy management, supporting specialty care programs (HIV, oncology, behavioral health), reducing medication costs for vulnerable patients, investing in community health initiatives and prevention, and strengthening infrastructure and technology capabilities. Covered entities should develop mission-aligned reinvestment strategies demonstrating measurable community benefit. Professional documentation strengthens stakeholder communication and supports grant applications.

Question 14

Do I need to report how I use 340B savings?

Accepted Answer

HRSA does not currently require covered entities to report specific uses of 340B savings. However, many covered entities voluntarily document and communicate 340B reinvestment to demonstrate program value to boards, funders, community partners, and regulators. Transparent communication builds stakeholder trust and supports strategic decision-making. Some states have proposed or enacted 340B reporting requirements, so covered entities should monitor state-level policy developments. CareBridge's Impact Documentation service helps organizations develop compelling reinvestment narratives for stakeholder communication.

Question 15

How can CareBridge help my organization?

Accepted Answer

CareBridge provides comprehensive 340B advisory services across five tiers: Readiness & Risk Review (pre-enrollment assessment and eligibility validation), Compliance Enablement & Audit Preparedness (policy development and compliance infrastructure), Reinvestment Strategy & Program Design (mission-aligned savings planning), Impact Documentation & Stakeholder Reporting (board presentations and grant narratives), and Compliance Advisory Retainer (ongoing guidance and policy monitoring). Our services are exclusively advisory—we maintain strict ethical boundaries and do not purchase drugs, manage billing, sign attestations, or participate in margin-sharing arrangements.

Question 16

What makes CareBridge different from other 340B consultants?

Accepted Answer

CareBridge focuses exclusively on compliance readiness, mission-aligned reinvestment, and stakeholder communication—not operational management or margin-sharing. We maintain strict ethical boundaries, provide transparent fixed-fee pricing, and prioritize long-term sustainability over short-term revenue maximization. Our approach emphasizes building internal capacity rather than creating dependency. We serve covered entities directly, not manufacturers or intermediaries, ensuring our guidance aligns solely with your organization's compliance and mission priorities.

Question 17

How long does a typical CareBridge engagement take?

Accepted Answer

Engagement timelines vary by service tier and organizational complexity. Readiness & Risk Review typically takes 4-6 weeks, Compliance Enablement 8-12 weeks, Reinvestment Strategy 6-10 weeks, and Impact Documentation 4-8 weeks. Compliance Advisory Retainer provides ongoing monthly support. We work collaboratively with your team to establish realistic timelines that balance thoroughness with operational needs. Most organizations begin with Readiness & Risk Review or Compliance Enablement, then expand to additional services as program maturity increases.

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