HRSA Audit Failures and Required Repayments for Diversion/Duplicate Discounts
Definition
HRSA conducts approximately 200 audits per year of covered entities, including retail pharmacies in 340B programs, identifying breaches like diversion of drugs to non-eligible patients or duplicate discounts. Non-compliant entities must repay discounts to manufacturers. Annual recertification and self-reporting requirements highlight recurring compliance gaps.[1]
Key Findings
- Financial Impact: $Repayment of full discounts plus potential civil monetary penalties per audit
- Frequency: Annual - ~200 audits/year by HRSA, ongoing recertification breaches
- Root Cause: Inadequate monitoring of contract pharmacy compliance, patient eligibility tracking failures, and lack of duplicate discount safeguards
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Retail Pharmacies.
Affected Stakeholders
340B program coordinators, Pharmacy compliance teams, Finance directors
Deep Analysis (Premium)
Financial Impact
$100,000-$450,000+ per audit cycle in duplicate discount and purchase price corrections • $100,000-$750,000+ repayment of discounts plus civil monetary penalties; potential loss of 340B program participation • $100,000-$750,000+ repayment of diverted drug discounts; DEA penalties for controlled substance tracking failures; potential legal liability
Current Workarounds
Manual audit preparation using spreadsheets and paper records; email chains for evidence gathering; memory-based documentation of compliance efforts • Manual claim review after denial/audit notification; ad-hoc communication with pharmacy and TPA to correct routing • Manual controlled substance logs using paper forms; memory-based tracking of which patients received 340B-priced controlled drugs; email alerts for discrepancies
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Evidence Sources:
Related Business Risks
Failure to Receive 340B Ceiling Prices from Manufacturers
Diversion and Duplicate Discount Violations in Contract Pharmacies
Medicare Fraud Risk from Unbilled Parallel MTM Services
Incorrect MTM Billing Codes Leading to Zero Reimbursement
Denied MTM Claims Due to New vs Established Patient Coding Errors
Overcharging MTM Services Beyond State-Regulated Amounts
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