For many healthcare organizations, few words generate more anxiety than “HRSA audit.”
Receiving an audit notification from the Health Resources and Services Administration (HRSA) can feel overwhelming, particularly for organizations that have never experienced one before. Questions begin circulating immediately:
Are we prepared?
Is our documentation complete?
What if they find something?
While these concerns are understandable, the reality is that organizations maintaining strong compliance practices throughout the year are typically well positioned to navigate the audit process successfully.
At Thrive 340B, we encourage our clients to prepare for a HRSA audit every day—not just after receiving an audit notice.
Why HRSA Conducts Audits
The purpose of HRSA audits is not to penalize Covered Entities but to ensure the integrity of the 340B Drug Pricing Program.
HRSA evaluates whether organizations are complying with federal program requirements and appropriately managing discounted medications.
Audits generally focus on several key areas, including:
- Patient eligibility
- Provider eligibility
- Prevention of diversion
- Prevention of duplicate discounts
- Contract pharmacy oversight
- Internal controls
- Policies and procedures
- Recordkeeping
Organizations that maintain comprehensive documentation and consistent operational processes are generally better equipped to demonstrate compliance.
How Organizations Are Selected
HRSA conducts audits of Covered Entities each year using a risk-based selection process that may consider factors such as organizational complexity, contract pharmacy arrangements, program size, or previous audit history. While the specific selection methodology is not publicly disclosed, every Covered Entity should assume that an audit is possible at any time.
The best preparation strategy is continuous readiness rather than last-minute preparation.
The Audit Process
Once selected, Covered Entities receive formal notification outlining the audit scope and requested documentation.
Audits may be conducted virtually or on-site depending on HRSA’s current procedures.
During the audit, reviewers commonly request:
- Patient medical records
- Prescription documentation
- Provider employment or contractual records
- Purchase records
- Inventory reports
- Split-billing reports
- Contract pharmacy agreements
- Policies and procedures
- Medicaid billing information
The objective is to verify that medications purchased through the 340B Program were appropriately dispensed to eligible patients while complying with federal requirements.
Common Compliance Findings
Although every organization is different, several issues appear repeatedly across the industry.
Examples include:
Inadequate Patient Eligibility Documentation
Incomplete medical records remain one of the most common findings.
Organizations should clearly demonstrate that each patient meets HRSA’s eligibility standards.
Provider Eligibility Issues
Providers must have an appropriate relationship with the Covered Entity.
Credentialing errors or outdated provider information can create unnecessary compliance concerns.
Diversion
Diversion occurs when medications purchased under 340B are dispensed to individuals who are not eligible under program requirements.
Preventing diversion remains one of HRSA’s highest priorities.
Duplicate Discounts
Manufacturers should never be required to provide both a Medicaid rebate and a 340B discount for the same medication.
Organizations must have reliable systems to prevent duplicate discounts.
Contract Pharmacy Oversight
Covered Entities remain responsible for program compliance even when using third-party administrators or contract pharmacies.
Delegating operational responsibilities does not transfer regulatory responsibility.
Why Internal Audits Matter
One of the most effective ways to prepare for HRSA audits is through regular internal and external compliance reviews.
Annual mock audits frequently identify issues before regulators do, allowing organizations to implement corrective actions proactively.
These reviews may evaluate:
- Random prescription samples
- Patient eligibility
- Provider eligibility
- Documentation quality
- Pharmacy reconciliation
- Policy compliance
- Software configuration
- Medicaid billing practices
The objective is continuous improvement—not simply passing an audit.
Creating a Culture of Compliance
Compliance should never rest with one individual.
Successful organizations create cultures in which clinical staff, pharmacy personnel, finance teams, compliance officers, and executive leadership all understand their responsibilities.
Regular education, documented policies, standardized workflows, and ongoing monitoring significantly reduce organizational risk.
How Thrive 340B Supports Audit Readiness
At Thrive 340B, audit readiness is integrated into every aspect of our consulting approach.
We assist Covered Entities by providing:
- Comprehensive mock audits
- External compliance reviews
- Policy and procedure development
- Executive compliance reporting
- Staff education
- Corrective action planning
- Contract pharmacy assessments
- Documentation reviews
- Continuous compliance monitoring
Rather than preparing only when HRSA calls, we help organizations build systems that support year-round compliance.
Final Thoughts
An HRSA audit should never be viewed as a crisis.
Organizations with strong governance, reliable documentation, effective internal controls, and a proactive compliance strategy often navigate the process confidently.
The goal isn’t simply to pass an audit—it’s to build a 340B program that consistently supports patients while meeting the highest standards of regulatory compliance.
At Thrive 340B, we’re committed to helping Covered Entities achieve exactly that through practical guidance, operational expertise, and a partnership focused on long-term success.