Katy's 340B Compass: Compliance Made Clear

What does transparency really mean in the 340B program? In this episode, Katy Lees examines the growing push for more visibility into 340B operations—and the practical challenges behind it. She explores the limitations of contractual data, the complexity of medical claims, emerging state reporting requirements, and recent legal developments shaping the transparency debate. Katy also discusses why standardized, neutral reporting frameworks may be necessary to improve clarity without creating misleading narratives.

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What did the Winter Coalition meeting signal about the future of 340B?

Katy Lees shares key insights on Medicare Fair Price implementation, 340B identification in reporting, dispute process developments, manufacturer positioning, and the evolving rebate landscape. She also unpacks HRSA’s new RFI and what it may indicate for rebate policy direction.

Designed for leaders who want clarity—not noise.

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February’s 340B updates are here—and they’re complicated.

In this episode, Katy Lees, Principal 340B Compliance Advisor at Virtue 340B, breaks down paused rebate policies, MFP confusion for hospitals and contract pharmacies, CMS survey decisions, and manufacturer data-sharing challenges. Learn what’s changing, what’s unclear, and how covered entities should prepare next.
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Starting January 2026, the Inflation Reduction Act (IRA) will introduce Maximum Fair Prices (MFPs) for select high-cost Medicare Part D drugs—creating a new compliance intersection with the 340B Drug Pricing Program.

In Episode 11 of Katy’s 340B Compass, she walks through what these reforms mean for covered entities, including:

• What the MFP is and how it changes Part D reimbursement

• Why MFP and 340B discounts cannot apply to the same transaction (duplicate discount risk)

• HRSA’s proposed 340B Rebate Model Pilot and why it raised major operational and financial concerns

• How litigation has temporarily paused the rebate pilot, preserving upfront 340B discounts—for now

• What covered entities must do today to prevent MFP duplicate discounts and confirm MFP rebates are handled correctly for non-340B prescriptions

• Why vendor limitations may require manual controls and enhanced monitoring in the near term

Even with the rebate pilot delayed, the compliance obligation remains; covered entities must actively prevent duplicate discounts and maintain audit-ready documentation.

📥 Download the Slide Deck (Episode Toolkit)https://virtue340b.com/ira-mfp-340b-rebate-pilot-program-guide-toolkit/

In this episode, Katy breaks down what covered entities need to know to prepare for a rebate-based 340B model, including the data elements, workflows, and operational controls that may be required. Important update: after this episode was recorded, a federal court issued a preliminary injunction (Dec. 29, 2025) temporarily blocking HRSA’s 340B Rebate Model Pilot Program from going live on Jan. 1, 2026. While implementation is paused, the readiness concepts discussed remain highly relevant for strengthening data integrity, oversight, and preparedness for future changes.

What should you do when a manufacturer reaches out with a compliance concern? In this episode, Katy explains the fundamentals of good faith inquiries, manufacturer disclosures, and material breach. You’ll learn how to confirm receipt of an inquiry, evaluate potential diversion or duplicate discount issues, determine whether an issue rises to a material breach, and navigate disclosure and repayment with professionalism, transparency, and confidence.

After attending the Medicaid Rebate Summit, Katy shares key themes and insights into why duplicate discount prevention is fundamentally flawed under current processes. She discusses how manufacturers rely on outdated Medicaid Exclusion File data, the operational realities of carve-in and carve-out decisions, and why stakeholder collaboration is essential. Katy also dives into the debate over HRSA’s rebate pilot policy and shares guidance for compliance leaders preparing for what’s next in the 340B program.

This episode covers two timely topics: HRSA’s pilot rebate policy and the annual 340B hospital recertification process. Katy explains why public comments matter and shares alternative approaches to support transparency without undermining the program. She also provides a practical walk-through of recertification steps, including coordination with Authorizing Officials, validating Medicaid billing numbers, and confirming child site cost report details for accuracy, compliance, and audit readiness.

What is a 340B clearinghouse—and why is it gaining attention? Katy breaks down what a clearinghouse could look like, how it might help eliminate duplicate claims across covered entities, and why a centralized data solution could strengthen program integrity. This episode also explores the potential role of OPA and the operational challenges of integrating medical claims, along with practical workarounds.

Non-compliance can happen in any 340B program—but how you respond matters. Katy walks through the immediate steps to take when a potential violation is identified, the importance of internal reporting and self-disclosure, and best practices for mitigating risk. This episode focuses on maintaining transparency, strengthening audit readiness, and building a culture of accountability and continuous improvement.