Episode summary
In this episode of 340B Pulse, host Muhammad Atif speaks with Joshua Free, PharmD, MBA, founder and president of Nelco Advisory and founder of RxFusion. Joshua has worked in community retail and long-term care pharmacy, led a health system business unit that 340B reported into, and served as a chief pharmacy officer before moving into consulting, where most of his work is now annual independent audits. The conversation is about the gap between a 340B policy and what actually happens in the claims. His most common finding is blunt: the policy references a 340B steering committee that has never met.
Show notes
- The true definition of a 340B policy is a description of what your team actually does, not what it intends to do.
- Why most operators falsely assume a written policy means a governed program.
- The steering committee that the policy references and that has never met.
- The critical difference between a TPA saying a claim qualifies and an auditor proving it.
- Why every covered entity, not only those with contract pharmacies, should have an annual independent audit.
- How multi-entity systems lose track of which rules apply where, from grantee scope to orphan drug exclusion.
- Why a policy written at procedure level guarantees that operations will drift away from it.
- Where AI can check 340B work without becoming another black box.
- Key Insights and Takeaways
- Joshua Free recorded this episode on 1 October 2026, the first day of voluntary submissions to the CMS Part D 340B claims repository.
- His most common finding is a policy that references a 340B steering committee that has never met.
- Training is the second: policies either leave it out or set a standard nobody is meeting.
- Medicaid carve-in and carve-out status and contract pharmacy handling are frequent mismatches between policy and practice.
- Many programs are operationally fine but have no policy in place, or a policy nobody follows.
- HRSA expects an annual independent audit for entities with contract pharmacies.
- Joshua's view is that every entity should audit its whole program every year.
- Independent should mean not yourself, not the contract pharmacy and not your TPA.
- HRSA does not say how many claims to sample, so the audit design has to come from experience and real findings.
- A good audit shows where you sit on the risk spectrum and whether you chose each position knowingly.
- Internal audits should focus on known weak spots and shrink sampling where results are always clean.
- A new contract pharmacy with its own TPA is a reason to audit every claim for the first 30, 60 or 90 days.
- Your 340B analyst should know every qualification rule and filter your TPA applies, or know where to find it.
- A TPA's yes on a factor is not an audit; trace the claim back to the encounter in the EHR.
- A HRSA auditor does not care whether the TPA said the claim counts.
- Keep policy and procedure in separate documents, so routine system changes do not break the policy.
- If your TPA submits data to the state, the CMS repository or Beacon, you need a way to see and spot check what was sent.
- Use AI to check a policy for internal consistency, and keep a human reviewing a targeted sample of claims.
- The one control to test this quarter is duplicate discount prevention.
- A TPA conversion is the moment to review your policy line by line.
