CIB: Best Practices for Avoiding 340B Duplicate Discounts in Medicaid

Today the Centers for Medicare & Medicaid Services (CMS) issued an Informational Bulletin to state Medicaid programs on best practices to avoid billing manufacturers for rebates on 340B drugs, also known as duplicate discounts. The incidence of duplicate discounts has increased significantly, specifically with the growth of Medicaid managed care, and the growing number of 340B eligible entities, including contract pharmacies.  States should exclude claims filled with 340B drugs from the quarterly rebate requests sent to manufacturers.

With respect to this Information Bulletin, it notes that CMS managed care regulations require that states include a provision in their managed care plan contracts that the managed care plans have a mechanism in place to exclude 340B managed care organization (MCO) utilization from the Medicaid rebate pool data submitted to the state.

Other approaches described in the Informational Bulletin include: carving out 340B entities and contract pharmacies from Medicaid; using specific identifiers on 340B MCO claims, such as National Council for Prescription Drug Programs (NCPDP) or Medicare Part B 340B drug modifiers so they are not included in the Medicaid rebate pool; and using specific Bank Identification Numbers (BIN) and Processor Control Numbers (PCN) on patient identification cards so that the claim can be excluded from the Medicaid rebate pool if 340B claims are carved-out from Medicaid.

• Best Practices for Avoiding 340B Duplicate Discounts in Medicaid