1099 new york avenue, nw | suite 530 | washington dc 20001 | 202733-2636
www.medicineacess.org
Federal 340B Drug Program
States’ Medicaid Reporting and
Management Challenges and
Opportunities.
J. Edward Gilmartin
President | MACC
22 October 2013
Who is MACC?
 Washington DC based not-for–profit
formed in July 2013.
 Co-founded by:
 Edward Gilmartin (Former President
of CaptureRx® -largest 340B
administrator in the US.)
 Honorable Billy Tauzin , (Former
U.S. Congressman and Past
President & CEO of PhRMA®)
 1500 Safety Net Provider Sites in
42 States | 5.7 Million Patients |
20 Million Outpatient Encounters.
MACC Mission & Values.
 Moderate voice for polarizing topic.
 Against 340B expansion to include
inpatient eligibility.
 304B program should focus more on
reducing largest cost to healthcare
system – reducing hospital
readmissions through medicine
compliance and access.
 Create a Standards Review Board
comprised of pharma, bio, and patient
advocate groups to build audited
Certification Program.
340B Drug Program.
 1992: Congress created the 340B Drug
Discount Program to reduce outpatient
prescription drug costs for safety
net health care providers, enabling
them to stretch scarce resources as
far as possible, reaching more
eligible patients and providing more
comprehensive services.
 Over 15,000 sites: non-profit safety
net clinics and hospitals.
 Approx. $7 Billion program (3% of
U.S. Pharma sales)
 For more Information:
www.hrsa.gov/opa
340B Patients &
Pharmacies.
 Safety net providers may use 340B
drugs on all their outpatients.
(Medicaid*, commercial, Medicare,
uninsured)
 Safety net providers’ in-house
pharmacies and contracted pharmacies
fill 340B.
 Contract pharmacies participate in
stock replenishment with 340B and
enhanced dispense fees.
 Over 7,000 contract pharmacy sites
today.
 All major chains and independents
participating.
 HOWEVER, Medicaid claims are
treated differently…
Avoiding Duplicative
Discounting.
 340B Law precludes the use of 340B
Drugs on FFS Medicaid Claims (unless
States forgo CMS Rebate on those
claims)
 Many States forgo CMS rebates, but
require Safety net in-house
pharmacies to submit 340B Cost.
 Safety net contracted pharmacies
exclude use of 340B for FFS Medicaid
claims.
 States use HRSA Medicaid Exclusion
File or a modified State file to
identify in-house pharmacies.
 HOWEVER, ACA comes along…
Affordable Care Act.
 Allows for CMS Drug Rebates on
Medicaid Managed Care (MMC).
 340B Clause – Unless 340B was
purchased for claim.
 Prior to ACA, Safety net providers
used 340B drugs for MMC claims.
 Huge Conversion by States to MMCs.
 States taking CMS Rebates on MMCs.
 BUT, different 340B policies by
State…
States’ 340B Policies.
 340B polices vary by State.
 Most States want to keep the CMS
Rebate and force safety net providers
to either
 Carve Out and not use 340B drugs
for MMCs, OR
 Submit 340B Cost to MMCs with
NCPDP Basis of Cost Field of “08”.
States forgo the CMS Rebate.
 Some States allow safety net
providers to use 340B so long as
they identify the claim with MMCs.
Problems.
 States are relying on their MMCs and
PBMs to properly report and identify
340B claims.
 MMCs and PBMs do not understand 340B!
They have no way to support 340B cost
submittal at POS.
 No communication to safety net
providers.
 NCPDP D.0 POS Basis of Cost Code
impractical, as all 340B is
identified retrospectively for 340B
contract pharmacies.
 Pharmacies don’t want to take risk of
identification and coding.
 NCPDP Retrospective Submission
Clarification Code issues.
MMC & Safety Net
Partnerships.
 Some States are allowing partnerships
between MMCs and safety net
providers. (California and Texas)
Others States are looking at this
concept.
 States forgo all CMS rebate on 340B
claims.
 Shared savings from 340B between MMCs
and safety net providers.
MMC & Safety Net
Partnerships. Why?
 States want to protect safety net
providers.
 Bringing MMCs together contractually
with safety net providers assures:
 Accurate reporting to avoid
duplicative discounting.
(retrospective offline processes)
 Builds tighter relationship on the
highest cost utilizers that are
shared between MMCs and safety net
providers.
 340B funds can be used for
 Medicine compliance activities
controlling MMCs’ MLRs..
 Total healthcare cost
containment greater
than CMS rebates forgone.
MACC Initiative
340B National Database on States
Processing Requirements
 National database of all States’ 340B
processing requirements to enable
effective reporting and avoid
duplicate discounts from CMS rebates.
 Carve-in/Carve-out, In-house/contract
pharmacies, shared savings plans.
 Directory of all BIN, Group and PCN
Codes used for MMCs.