1. 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

2. 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.

3. Topic Guide 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 Describe the role of the Medicaid Exclusion File in preventing duplicate discounts

4. 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 non- 340B patients Duplicate discounting Requires mechanism t ensure that entities comply with duplicate discount prohibition

5. Duplicate Discount on 340B Drugs And Purchased with an up-front 340B discount Credited with a back-end transaction Medicaid rebate When does a duplicate discount occur? When the same drug is:

6. Examples of Duplicate Discounts Example 1: Take-home prescription 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 Example 2: Provider- administered 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

7. Examples of Duplicate Discounts (Cont’d) Example 3: Managed Care Affordable Care Act Patient of Medicaid managed care organization (MCO) fills outpatient prescription at 340B pharmacy MCO submits NDC level data from pharmacy claims to Medicaid agency Medicaid agency submits data from these claims to manufacturers for rebates MCO 340B Exemption 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 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.

8. Medicaid Exclusion File Mechanism DRUG-PRICING PROGRAM 340B Congress Legislation Must Create Department of Health and Human Services

9. 340B entities may: purchase drugs at 340B prices purchase drugs at non-340B prices (“off contract”) using a separate account OR Purchasing Drugs for Medicaid Patients

10. The Medicaid Exclusion File Health Resources and Services Administration Office of Pharmacy Affairs Medicaid Exclusion File Maintains 340B Entities & Their Associated Medicaid Provider Numbers National Provider Identifies (NPI)

11. Criteria for Listing in Medicaid Exclusion File If both conditions are met, Medicaid provider number and NPI must be listed in Medicaid Exclusion File Condition 2: Transmission of NDC level data to state Medicaid office Condition 1: Purchase drugs at the 340B price

12. 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-for- Service Medicaid

13. Contract Pharmacy340B Entity Drugs Bill to Ship to Medicaid prescriptions filled using the contract pharmacy’s own non- 340B inventory Entity’s 340B-purchased drugs are not used to fill Medicaid prescriptions No need to list pharmacy’s Medicaid number in OPA database Medicaid Exclusion File & 340B Contract Pharmacies

14. http://opanet.hrsa.gov/opa/CERegister.aspx 340B Enrollment Form 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. Where should CEs indicate the required Medicaid billing information?