By Elena Eyber, J.D.
CMCS bulletin outlines best practices for states to consider to avoid billing manufacturers for rebates for covered outpatient drugs purchased under 340B Program.
An informational bulletin from the Center for Medicaid and CHIP Services (CMCS) details a number of best practices that states are encouraged to consider to avoid billing manufacturers for Medicaid rebates (also known as receiving a "duplicate discount") for covered outpatient drugs purchased under the 340B Drug Pricing Program (340B Program). This bulletin was also developed in response to two HHS Office of Inspector General (OIG) reports which encouraged CMS to inform states about ways they could identify claims for 340B drugs to avoid duplicate discounts and enhance state compliance in this program (CMCS Informational Bulletin, January 8, 2020).
State Medicaid programs may employ a number of best practices if facing challenges with avoiding billing for duplicate discounts. First, states are encouraged to use the 340B Medicaid Exclusion File (MEF) to help prevent duplicate discounts in Medicaid fee-for-service (FFS). States can also develop strategies with contract pharmacies to prevent duplicate discounts. Some state Medicaid programs have elected to use the state plan amendment (SPA) process to develop parameters around the ability of covered entities and/or contract pharmacies to dispense 340B drugs to Medicaid FFS beneficiaries. A state could also use the SPA process to limit the ability of some or all of the covered entities and/or contract pharmacies in the state to use 340B purchased drugs for Medicaid beneficiaries.
Additionally, state Medicaid agencies can use 340B claims identifier options, such as Submission Clarification Code, "UD" modifier or state-specific modifiers, and physician administered drugs billing modifiers for dually eligible beneficiaries. States can also include 340B duplicate discount provisions in Medicaid managed care contracts. Further, states may consider providing manufacturers with claims level data, along with drug rebate invoices, to facilitate compliance and to ensure there are no duplicate discounts. Lastly, states can use specific Medicaid Processing Bank Identification Number (BIN) and Processor Control Number (PCN) on Medicaid managed care plan identification cards for the prevention of duplicate discounts.
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