340B & Medicaid
The 340B Statute Prohibits “Duplicate
Discounts”
Support for Preventing Duplicate
Discounts
•A duplicate discount occurs when a drug purchased
with a 340B discount is also subject to a state
Medicaid rebate.
Additional methods are being used by stakeholders
to attempt to prevent duplicate discounts. Here are
two approaches:
•HRSA developed the Medicaid Exclusion File to
prevent duplicate discounts from occurring.
•The NCPDP Transaction Standards identify an
individual 340B purchased drug claim at the
point of pas (POS) in a retail or clinic pharmacy
(contract pharmacy).
•Entities that use 340B drugs for Medicaid patients
must denote this on the HRSA 340B Databse and
list the entity’s Medicaid billing number/NPI in the
Medicaid Exclusion File
•States use the Medicaid Exclusion File to identify
and removes 340B pharmacy claims associated
with such entities from rebate requests. Verify with
your state if it has additional billing requirements.
BE AWARE
•A UD Modifier is used for physician-administered
claims to identify a 340B purchased drug by
using the reporting modifier “UD” in conjunction
with the procedures code on the state or federal
billing form. See your state’s pharmacy provider/
billing manual for more information.
Medicaid and Contract Pharmacy
Some pharmacy payers have been issuing
discriminatory contracts to 340B entities for
significantly lower reimbursement than they would
offer other retail pharmacies.
340B drugs should not be used in a contract
pharmacy situation for Medicaid patients unless
there is an arrangement to prevent duplicate
discounts that has been reported to HRSA in
collaboration with the state Medicaid agency.
•Some Medicaid managed care organizations
(MCOs) offer lower reimbursement if there is no
Medicaid rebate collection.
FAQs
•Some Medicaid MCOs may be attempting to
capture the 340B savings without the direction of
the state office.
If your entity receives a discriminatory contract, you
do not have to agree to the terms.
Is my covered entity (CE) required to
submit its Medicaid/NPI number to the
HRSA Medicaid Exclusion File?
If the CE uses 340B drugs for Medicaid patients,
then it must list all the Medicaid billing numbers/
NPIs used for billing thise claims to the state.
Can I use 340B drugs for Medicaid
patients in some places and not others?
If an entity chooses to use 340B for its Medicaid
patients, it must be consistent for all patients and
clinics that bill with the same Medicaid billing
number/NPI. CEs wishing to have varied billing
practices in regards to Medicaid patients must get
additional NPI numbers or seek a state-approved
differentiation process and work with HRSA.
Creating a Win–Win
I have heard that some states have
created a special 340B reimbursement
rate for covered entities. How would I go
about encouraging my state to do that?
To incentivize entities to bill Medicaid at 340B cost,
some state Medicaid programs have offered 340B
entities an “enhanced” dispensing fee when the entity
bills at acquisition cost. This helps offset the entity’s
increased administrative cost and loss of administrative
funds when using 340B drugs.
Learn your state’s 340B
Medicaid policy...
States have different policies regarding when
they seek rebates on pharmacy claims. Here
are some questions to ask:
1. Does the state Medicaid agency
have a written policy or regulation
regarding 340B billing?
2. Does the state Medicaid agency
have a Medicaid billing policy for
the use of 340B drugs for patients
in these circumstances?
□ Medicaid managed care
□ Physician administered drugs
□ Dually eligible for Medicaid/Medicare
□ Medicaid is secondary payer
□ Bundled or capitated rate
□ Any other circumstances
More information on Medicaid billing
requirements and policies:
HRSA webpage on Medicaid Exclusion:
http://www.hrsa.gov/opa/programrequirements/
medicaidexclusion/index.html
Contact Us!
Apexus | 340B Prime Vendor Program
888.340.2787 | ApexusAnswers@340BPVP.com
www.340BPVP.com
Data from successful partnerships
•One state saves about 25% monthly on 340B
entities’ pharmacy claims (compared to Medicaid net
rebate) after instituting an enhanced dispensing fee.
•One entity demonstrated that the state would save
$67 per prescription (72%) after a $14 enhanced
fee, on a list of the 20 frequently prescribed drugs.
Develop a positive discussion in your
state:
1. Discuss the benefits of the 340B program and
the desire to work cooperatively to create a 340B
partnership.
2. Note the benefit of receiving an immediate 340B
discount instead of a retrospective rebate.
3. Provide data regarding projected 340B savings
from using 340B drugs for your patients; show your
ability to share savings.
4. Clearly document the costs associated with
dispensing a Medicaid prescription and the
incremental cost of using 340B drugs, thus the need
for an adequate fee to cover these administrative
costs. The cost-to-dispense surveys that many
states have or are doing will be helpful.
5. A shared savings model should provide entity
revenue in one or both areas of product cost and
actual dispensing costs. States and CMS will look
for data to substantiate savings and the required
equitable reimbursement.
6. Consider starting a pilot program with a small group
to evaluate the impact on the entities and states.
Contact Apexus.Answers@340BPVP.com if you
need help with Medicaid contact information for
your state.
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05072015