ACE Purchasing & Inventory Management 3 — Questions and Answers
Question 1: A disproportionate share hospital (DSH) is prohibited from using which purchasing arrangement for covered outpatient drugs under the 340B program?
- Direct manufacturer purchasing
- Group purchasing organization (GPO) contracts (Correct answer)
- Wholesaler prime vendor agreements
- State Medicaid agency contracts
Correct answer: Group purchasing organization (GPO) contracts
DSH hospitals (and certain other covered entities) are prohibited from purchasing covered outpatient drugs through GPO contracts while also participating in 340B for those same drugs.
Question 2: In the context of 340B inventory management, what does 'accumulation' refer to?
- Buying more than 12 months of drug supply at once
- Tracking eligible patient encounters before purchasing drugs at 340B prices (Correct answer)
- Combining 340B and Medicaid rebate claims
- Storing drugs off-site before dispensing
Correct answer: Tracking eligible patient encounters before purchasing drugs at 340B prices
Accumulation involves building up a sufficient volume of 340B-eligible patient encounters before executing a bulk 340B purchase, often used in virtual inventory systems.
Question 3: Which type of covered entity is subject to the orphan drug exclusion under the 340B statute?
- Federally Qualified Health Centers (FQHCs)
- Ryan White HIV/AIDS grantees
- Children's hospitals, free-standing cancer hospitals, and critical access hospitals (Correct answer)
- Rural health clinics
Correct answer: Children's hospitals, free-standing cancer hospitals, and critical access hospitals
The orphan drug exclusion applies to children's hospitals, free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals — not to FQHCs or Ryan White grantees.
Question 4: A 340B covered entity's wholesaler invoice shows the drug was billed at WAC instead of the 340B ceiling price. What is the most appropriate immediate action?
- Accept the invoice and adjust the next order
- File a dispute with the manufacturer through HRSA's dispute resolution process (Correct answer)
- Terminate the wholesaler contract
- Contact the state Medicaid agency
Correct answer: File a dispute with the manufacturer through HRSA's dispute resolution process
When a manufacturer charges above the 340B ceiling price, the covered entity should initiate the manufacturer dispute resolution process established by HRSA.
Question 5: What is the maximum number of contract pharmacy arrangements a covered entity with an in-house pharmacy may typically register under current HRSA policy?
- No limit; unlimited contract pharmacies allowed (Correct answer)
- One contract pharmacy per covered entity
- The number varies by state law only
- Five contract pharmacies per covered entity
Correct answer: No limit; unlimited contract pharmacies allowed
Historically, HRSA allowed unlimited contract pharmacy registrations, though recent manufacturer restrictions have limited access — the statutory rule itself has no numerical cap.
Question 6: Which of the following best describes 'split billing' software in a 340B context?
- Software that bills patients at a split rate between 340B and WAC pricing
- Technology that identifies and separates 340B-eligible from non-eligible drug purchases at the point of dispensing (Correct answer)
- A system for splitting Medicaid rebate claims between federal and state governments
- Billing software that divides pharmacy costs between departments
Correct answer: Technology that identifies and separates 340B-eligible from non-eligible drug purchases at the point of dispensing
Split billing software evaluates each prescription at the point of dispensing and determines whether the patient and encounter qualify for 340B purchasing, flagging eligible transactions accordingly.
Question 7: Under the 340B program, a covered entity's child site must be registered in OPAIS to purchase drugs at 340B pricing. Which of the following is NOT a valid child site type?
- Off-site outpatient clinic
- Mobile van
- Inpatient ward of a registered hospital (Correct answer)
- Offsite pharmacy
Correct answer: Inpatient ward of a registered hospital
340B benefits apply only to covered outpatient drugs; inpatient wards are not eligible child sites because drugs dispensed to inpatients do not qualify under the program.
ACE Purchasing & Inventory Management 3
A disproportionate share hospital (DSH) is prohibited from using which purchasing arrangement for covered outpatient drugs under the 340B program?