Survey Raises Questions About Duplicate Discounts

by Admin | October 17, 2019 1:25 pm

Oct. 17, 2019– A newly released survey on the interplay of the 340B drug discount program and Medicaid has raised questions about what federal and state rules are in place to prevent duplicate discounts. The bottom line is that several such rules already exist in all 50 states to prevent pharmaceutical manufacturers from paying both a 340B discount and a Medicaid rebate on the same drug.

The survey was released Oct. 15 by the professional services firm Manatt, Phelps & Phillips. In a press release[1], the firm stated that its report “summarizes  laws, regulations and sub-regulatory guidance that govern how Medicaid programs in all 50 states reimburse for both 340B and non-340B drugs, and how Medicaid programs ensure that those drugs are not also subject to a Medicaid rebate.” The full report is available by purchase only and not been made accessible for public review.

This is a good time to review the ways in which federal and state agencies work with 340B covered entities to ensure that a manufacturer does not pay both a 340B discount and a Medicaid rebate on the same drug.

340B Requirements for FFS Medicaid Claims

The Health Resources & Services Administration (HRSA) requires 340B covered entities to use the agency’s Medicaid Exclusion File (MEF) to avoid duplicate discounts under fee-for-service (FFS). Under this system:

340B Requirements for MCO Medicaid Claims

For Medicaid managed care, the state, not the covered entity, is required under federal law to identify MCO claims for 340B drugs. Some states, such as Oregon, use models that are easier for hospitals to work with than others. Under this system:

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