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Atlanta, Georgia Section 340B Audit Defense Lawyer

Our healthcare law firm represents Federally Qualified Health Centers, other HRSA-supported health centers and look-alikes, and Ryan White Clinics in connection with Section 340B Audits. We are focused on helping healthcare practices avoid or solve business and legal problems that are unique to the healthcare industry. We have particular experience representing FQHCs in a variety of business and healthcare regulatory matters, including preparation for and responding to Section 340B Audits.

Our Team Represents FQHCs and other Section 340B Covered Entities

If your health center participates in the Section 340B Program, our firm can assist you in ensuring your legal compliance with and continued participation in the Section 340B Program, to protect your financial benefits from Section 340B participation. We are a business and healthcare law firm with offices in Atlanta and Augusta, Georgia. Our firm represents and advocates for Federally Qualified Health Centers and similar health centers and entities in legal matters that emanate from participation in the Section 340B Program. Where necessary, we partner as a team with highly skilled consultants with particular experience and expertise in the Section 340B Program, with whom we have a strong relationship. Our legal services may involve representation regarding:

  • Section 340B Feasibility Analysis
  • Contracted Pharmacy Services Agreements
  • 340B Compliance/Policies and Practices Review and Internal Auditing
  • Section 340B Audit Readiness and Self-Audits
  • Responding to Section 340B Audit Notice
  • Section 340B HRSA Audit Defense
  • Section 340B Drug Manufacturer Audit Defense

Hamil Little is an AV-rated law firm made up of experienced litigators and advocates for Section 340B Covered entities and other healthcare providers in a variety of complex legal problems, including Section 340B audits. To schedule an evaluation, contact our law firm at, 404-685-1662 (Atlanta office) or 706-722-7886 (Augusta office).

The Section 340B Program

“Section 340B” is part of The Veterans healthcare Act of 1992. The “Section 340B Program” refers to a federally mandated drug discount program available to qualifying covered entities. The program establishes ceiling prices on outpatient drugs by requiring pharmaceutical manufacturers whose drugs are covered by Medicaid to provide discounts on outpatient covered drugs purchased by such covered entities. The purpose of the program is to aid eligible safety net providers in “stretch[ing] scarce Federal Resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. Rep. No. 102-384(ii), at 12 (1992).

Section 340B “discounts” are only available to “covered entities” for dispensing to “patients,” as defined by applicable Federal regulations. Covered entities may include certain hospitals (e.g., rural referral centers, sole community hospitals, and disproportionate share hospitals) and certain programs that operate under federal grants (e.g., Federally Qualified Health Centers, Ryan White Care Act entities, Black Lung clinics). HRSA’s Office of Pharmacy Affairs (OPA) oversees the program. The Section 340B Program, if properly implemented by an FQHC or other safety net provider, provides substantial financial resources that are intended by the federal government to advance the mission of such entities to serve a segment that is historically underserved with adequate healthcare. “Patients” are, generally speaking, individuals for whom the Covered Entity maintains healthcare records and who receives healthcare from a doctor employed by either the Covered Entity or another entity pursuant to a qualifying contractual arrangement with the Covered Entity.

340B Hazards


Section 340B drugs can only properly be dispensed to “patients” of the Covered Entity. Dispensing drugs to anyone who is not a patient of the Covered Entity, known as “diversion,” is illegal and can result in very serious adverse legal and financial consequences for the Covered Entity, including repayment of discounts and exclusion from the 340B Program. Perhaps worse, the Covered Entity can be referred to other federal law enforcement, e.g., the FDA or the OIG, for “appropriate action.”

Duplicate Discounts:

A Covered Entity may not receive 340B discounts and Medicaid discounts (i.e., rebates) for the same drug. Therefore, federal law requires Covered Entities to “carve in” or “carve-out” Medicaid beneficiaries from the utilization of Section 340B Program Drugs. Covered Entities that violate this prohibition may be required to refund discounts and may be referred to other federal law enforcement for appropriate action.

Obtaining Financial Benefits While Avoiding Illegal Pitfalls

The financial benefits of proper participation in the Section 340B Program are potentially huge for any FQHC or other covered entity. 340B revenue is intended to support or expand access to services for Section 340B entities. The growth of the Section 340B Program has been considerable and is expected to continue. For example, in 2001, there were 8,605 covered entities nationwide. By 2011, that number doubled, growing to 16,572. See, GAO Report to Congressional Committees, Drug Pricing/Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement (2011).

Call us for a free evaluation

To schedule an evaluation, you may reach our firm by email ( or by calling our office nearest you 404-685-1662 (Atlanta office) or 706-722-7886 (Augusta office). Our staff will schedule your evaluation.