Optimizing The 340B Program
Promoting Integrity, Access, & Value
To deliver clinically and cost-effective pharmacy services
This educational product created by:
Health Resources and Services Administration | Office of Pharmacy Affairs
340B Peer-to-Peer Program
340B Program Integrity
The Medicaid Exclusion File and
Avoiding Duplicate Discounts
Purpose of Activity
The purpose of this module is to explain the purpose of the Medicaid Exclusion File
and provide strategies on how states and covered entities can avoid duplicate
discounts.
Topic Guide
Describe the role of the
Medicaid Exclusion File in
preventing duplicate
discounts
Describe situations in
which a duplicate
discount might occur in
error
Identify the data entities
provide for insertion in
the Medicaid Exclusion
File
Explore how to use the
Medicaid Exclusion File
340B Background
Established in 1992
statute (section 340B of
the Public Health Service
Act)
Requires manufacturers
to sell “covered
outpatient drugs” to
certain “covered entities
(CEs)” at greatly reduced
price
Includes 2 major
prohibitions:
• Diversion to non340B patients
• Duplicate discounting
Requires mechanism t
ensure that entities
comply with duplicate
discount prohibition
Duplicate Discount on 340B Drugs
When does a duplicate discount occur?
When the same drug is:
Purchased with an up-front
340B discount
And
Credited with a back-end
transaction Medicaid
rebate
Examples of Duplicate Discounts
Example 1:
Take-home
prescription
Example 2:
Provideradministered
• Patient receives 340B medication (prescription from
outpatient procedure)
• Medication is billed through the pharmacy’s billing system
• National Drug Code (NDC) level data are transmitted to
state Medicaid agency
• Medicaid agency submits NDC claim information to
manufacturer for rebate
• Patient is administered medication (by outpatient
procedure provider)
• Medication is billed through hospital or clinic billing system
• NDC level data are transmitted to state Medicaid agency
through billing system
• Medicaid submits NDC level claim for manufacturer rebate
Examples of Duplicate Discounts (Cont’d)
• Patient of Medicaid managed care organization (MCO) fills
outpatient prescription at 340B pharmacy
• MCO submits NDC level data from pharmacy claims to
Medicaid agency
Example 3:
Managed Care • Medicaid agency submits data from these claims to
Affordable
manufacturers for rebates
Care Act
MCO 340B
Exemption
1.
• Section 2501(c) amends section 1927(j)(1): “… certain
covered outpatient drugs in this section are not subject to
the rebate requirements … [if] subject to discounts under
section 340B of the Public Health Service Act.”1
CMS. Letter re: medication prescription drug rebates. April 22, 2010. Available at: www.ncsl.org/documents/health/42210PPACADrug_Rebate_​SMD.pdf.
Accessed November 22, 2011.
Medicaid Exclusion File
Congress
340B
Legislation
Department of Health
and Human Services
DRUG-PRICING PROGRAM
Must Create
Mechanism
Purchasing Drugs for Medicaid Patients
340B entities may:
purchase drugs at 340B prices
OR
purchase drugs at non-340B prices
(“off contract”) using a separate
account
The Medicaid Exclusion File
Health Resources and Services Administration
Office of Pharmacy Affairs
Maintains
Medicaid Exclusion File
340B Entities & Their Associated
Medicaid Provider Numbers
National Provider Identifies (NPI)
Criteria for Listing in Medicaid Exclusion File
Condition 1: Purchase drugs at the 340B price
Condition 2: Transmission of NDC level data to state
Medicaid office
If both conditions are met, Medicaid provider number and
NPI must be listed in Medicaid Exclusion File
Billing Medicaid
340B entities must decide
whether or not to use 340B drugs for Medicaid patients
YES, use 340B drugs for
Medicaid
NO, don’t use 340B drugs
for Medicaid
340B entities must decide how to bill Medicaid in a way that is
consistent with their state’s Medicaid program
All-inclusive
Rate
Managed Care
Medicaid
Traditional Fee-forService Medicaid
Medicaid Exclusion File & 340B Contract Pharmacies
340B Entity
Bill to
Drugs
Medicaid prescriptions filled using
the contract pharmacy’s own non340B inventory
No need to list pharmacy’s
Medicaid number in OPA
database
Ship to
Contract Pharmacy
Entity’s 340B-purchased
drugs are not used to fill
Medicaid prescriptions
340B Enrollment
Form
Where should CEs indicate the
required Medicaid billing information?
A 340B covered entity is required to indicate on
the 340B Enrollment Form if it intends to bill
Medicaid for Drugs purchased at 340B prices.
http://opanet.hrsa.gov/opa/CERegister.aspx