Diversion (340B)
Definition
Diversion is one of the two core prohibited practices in the 340B program (the other being duplicate discounts). It occurs when a covered entity uses 340B-priced drugs for patients who are not eligible under HRSA’s patient definition—meaning patients who do not have an established care relationship with the covered entity, who are not receiving care from a provider employed by or under contract with the entity, or whose services are not consistent with the entity’s qualifying grant or designation.
Diversion can occur in multiple ways: dispensing 340B drugs to patients of a contract pharmacy who are not patients of the covered entity; using 340B drugs for inpatient care (which is not permitted); providing 340B drugs to employees, staff, or individuals without an established patient relationship; or dispensing 340B drugs through channels that are not registered in OPAIS.
Diversion can be intentional or unintentional. Unintentional diversion—resulting from poor data controls, misconfigured split-billing software, or inadequate patient eligibility screening—is the most common form and is still a violation. Covered entities must have robust data infrastructure and clear policies to prevent diversion across all dispensing channels.
Frequently Asked Questions
Why Diversion (340B) Matters
Diversion is a statutory violation that can trigger HRSA findings, repayment obligations, and in severe cases, program termination. It is the most common type of finding in HRSA audits and is almost always preventable with proper controls and documentation.
How Virtue 340B Uses It
Diversion prevention is central to every Virtue 340B audit and consulting engagement. We evaluate patient eligibility controls, data infrastructure, and dispensing workflows to identify and close the gaps that allow diversion to occur.