Optimizing The 340B Program

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. Purpose of Activity 340B Program Integrity The Medicaid Exclusion File and Avoiding Duplicate Discounts 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 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

4. 340B Background • Requires mechanism t ensure that entities comply with duplicate discount prohibition • Established in 1992 statute (section 340B of the Public Health Service Act) • Includes 2 major prohibitions: • Diversion to non-340B patients • Duplicate discounting • Requires manufacturers to sell “covered outpatient drugs” to certain “covered entities (CEs)” at greatly reduced price

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

6. Examples of Duplicate Discounts

7. Examples of Duplicate Discounts (Cont’d) 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. 340B DRUG-PRICING PROGRAM Medicaid Exclusion File Legislation Congress Department of Health and Human Services Must Create • Mechanism

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

10. The Medicaid Exclusion File Health Resources and Services Administration Office of Pharmacy Affairs Maintains Medicaid Exclusion File

11. Criteria for Listing in Medicaid Exclusion File

12. Billing Medicaid 340B entities must decide whether or notto 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 Traditional Fee-for-Service Medicaid Managed Care Medicaid All-inclusive Rate

13. Medicaid Exclusion File & 340B Contract Pharmacies 340B Entity Drugs Contract Pharmacy Ship to Bill 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

14. 340B EnrollmentForm 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