Glossary

The maximum price a manufacturer may charge a covered entity for a drug under the 340B program, calculated by a statutory formula (AMP − URA) and applied uniformly across covered entities.

A 340B Program Manager is the person responsible for day-to-day administration, compliance oversight, and operational performance of a covered entity’s 340B program.

340B savings utilization refers to how a covered entity applies financial benefit from 340B pricing to support services, access, and community health impact.

An accumulation model is the method a 340B program uses to count and attribute eligible dispensing/administration activity so it can be used to drive later 340B replenishment purchasing.

The continuous operational state where a covered entity can respond fully and accurately to an HRSA audit notice at any time because records and controls reflect current operations, not “paper compliance.”

Auditable records are the organized, retrievable documents and data that a covered entity must produce to substantiate 340B compliance during an HRSA audit or other review.

340B automation refers to using software and integrated workflows to manage eligibility, purchasing, inventory attribution, and monitoring in complex 340B programs.

Average Manufacturer Price (AMP) is a pricing benchmark used in federal drug pricing programs and is a core input to the 340B ceiling price calculation.

340B billing workflows are the operational processes that connect dispensing, payer classification, and claim submission to compliance controls like duplicate discount prevention and audit-ready documentation.

Claims data is billing and adjudication data used to evaluate 340B eligibility, contract pharmacy activity, and compliance controls such as duplicate discount prevention.

Claims reconciliation is the process of comparing dispensing, claims, and purchasing data to confirm 340B eligibility decisions are accurate and supported by auditable records.

A community benefit report is a document that explains how a covered entity uses resources—including 340B savings—to support community health impact and services for underserved populations.

Compliance documentation is the set of written policies, logs, reports, and records that demonstrate a 340B program is operating according to requirements.

Continuous improvement in a 340B program is the practice of regularly strengthening controls, documentation, and workflows based on audit findings, monitoring signals, and operational changes.

An ongoing process (typically monthly or quarterly) of reviewing 340B claims and control indicators to detect drift, prevent compliance failures, and protect program savings between formal audits.

A contract pharmacy is a pharmacy not owned by the covered entity that dispenses 340B drugs to eligible patients under a registered contract pharmacy arrangement.

A pharmacy not owned by the covered entity that dispenses 340B drugs to the covered entity's eligible patients under a registered contract pharmacy arrangement.

Contract pharmacy network optimization is the process of improving contract pharmacy performance and oversight to protect compliant savings while reducing operational and audit risk.

A formal written plan submitted to HRSA after an audit finding that documents corrective steps, owners, and timelines—and may include repayment calculations.

A Critical Access Hospital (CAH) is a rural hospital type that may qualify as a 340B covered entity when eligibility and registration requirements are met and maintained.

The accuracy, completeness, and reliability of the data used to determine 340B eligibility, support auditable records, and run compliant purchasing and billing workflows.

Data mapping is the process of defining how data fields from one system (such as an EMR) are translated and used in another system (such as a TPA platform) for 340B eligibility and reporting.

A Disproportionate Share Hospital (DSH) is a hospital type that may qualify as a 340B covered entity based on serving a high proportion of low-income patients, subject to specific eligibility criteria and registration.

In the 340B program (not controlled substance theft), diversion is a compliance violation—often caused by data/configuration errors—where 340B drugs are dispensed to patients who do not meet the patient definition requirements.

A prohibited situation in the 340B program where a covered entity receives both the 340B discount and a Medicaid rebate for the same drug—creating an impermissible "double discount."

The eligible patient definition describes the criteria a covered entity must meet to substantiate that a patient qualifies to receive 340B drugs under program requirements.

A Federally Qualified Health Center (FQHC) is a federal grantee health center that may qualify as a 340B covered entity and must maintain appropriate eligibility documentation and registration.

HIPAA is a U.S. health privacy law that governs how protected health information (PHI) is handled, including in 340B data exchanges and vendor workflows.

A formal compliance review conducted by the Health Resources & Services Administration (HRSA) to assess whether a covered entity is administering the 340B program in accordance with program requirements.

A voluntary, third-party review of a covered entity's 340B program operations, conducted by an outside compliance expert using the same standards an HRSA audit would evaluate—without the regulatory consequences of an official audit.

Internal controls are the operational checks, rules, and oversight practices a covered entity uses to prevent diversion, prevent duplicate discounts, and maintain compliant 340B program administration.

Manufacturer restrictions refer to policies imposed by some pharmaceutical manufacturers that limit or condition 340B pricing availability—often impacting contract pharmacy arrangements.

Medicaid carve-in/carve-out describes whether a covered entity uses 340B drugs for Medicaid patients (carve-in) or excludes Medicaid from 340B purchasing and dispensing workflows (carve-out), to prevent duplicate discounts.

Medicaid Managed Care (MMC) refers to Medicaid coverage delivered through managed care organizations, which can complicate 340B duplicate discount prevention and billing controls.

A mock audit is an internal or third-party audit simulation designed to assess 340B compliance and audit readiness before an HRSA audit occurs.

The Office of Pharmacy Affairs (OPA) is the HRSA office responsible for administering the 340B program and related oversight activities.

OPAIS (Office of Pharmacy Affairs Information System) is HRSA’s system used for 340B program registration and related program administration functions.

A patient definition policy documents how a covered entity interprets and applies patient eligibility criteria in day-to-day 340B operations.

A policies and procedures review is an assessment of whether 340B program documentation accurately reflects real operations and supports audit defensibility.

Policies and procedures (P&P) are the documented rules and workflows that describe how a covered entity operates its 340B program and how it prevents diversion and duplicate discounts.

Program optimization is the process of improving a 340B program’s operational performance and savings outcomes while maintaining compliant, auditable administration.

Referral claims are prescription or billing claims tied to referred care where 340B eligibility can be unclear if patient definition criteria and responsibility-of-care documentation are not met.

A repayment obligation is the requirement for a covered entity to repay manufacturers when 340B drugs were used in a way that violates program rules, such as diversion or duplicate discounts.

A replenishment model is a 340B inventory approach where a covered entity purchases 340B drugs to replace (‘replenish’) drugs dispensed to eligible patients, based on prior utilization.

A 340B risk assessment is a structured review that identifies where a program is most exposed to diversion, duplicate discounts, data integrity failures, and audit findings.

A risk-based audit approach is a method of auditing that focuses testing on the highest-risk areas of a 340B program rather than treating every area as equal risk.

Specialty drug pricing in 340B refers to the high-cost, high-impact medications where pricing accuracy and purchasing decisions can materially affect savings and compliance risk.

Split billing is a 340B pharmacy operations method used in mixed-use settings where a covered entity must distinguish 340B-eligible dispensing from non-340B dispensing and bill/purchase accordingly.

State Medicaid programs set billing, identification, and rebate-related rules that influence 340B Medicaid carve-in/carve-out decisions and duplicate discount prevention controls.

A third-party administrator (TPA) is a vendor or platform that helps manage 340B operational workflows—often supporting eligibility logic, claim qualification, and virtual inventory in contract pharmacy programs.

In the 340B program (not insurance administration), a TPA is the technology/vendor layer that determines eligibility, manages virtual inventory accumulation/replenishment, and supports billing controls—especially in contract pharmacy programs.

Unit Rebate Amount (URA) is a Medicaid rebate-related value used in the statutory calculation of the 340B ceiling price.

340B vendor management is the process of overseeing TPAs, pharmacies, wholesalers, and other partners to ensure their workflows support compliant and auditable 340B program operations.

Virtual inventory is a 340B program method that uses data and software to track which dispensed drugs should be treated as 340B without physically separating 340B and non-340B stock.

Wholesale Acquisition Cost (WAC) is the manufacturer’s list price benchmark used as the “standard” cost baseline—often compared against 340B ceiling price to estimate savings and quantify missed 340B captures.