October 12, 2012—A voluntary embargo on the use of a new billing code to flag prescriptions filled with 340B discounted drugs ends early next week, clearing the way for the code’s wide-scale implementation.
Although the code, developed by the National Council for Prescription Drug Programs (NCPDP), has been available for over a year, NCPDP advised parties not to use it until Oct. 15.[ms-protect-content id=”2799″] It enables pharmacies to flag 340B claims at the point of sale or retroactively. Many pharmacy benefit managers (PBMs) are expected to require pharmacies in their networks to use the identifier.
NCPDP created the 340B code in response to PBMs’ concerns that they could not collect rebates from drug manufacturers. Manufacturers contractually agree to give PBMs rebates in exchange for the manufacturers’ drugs being placed on the PBMs’ formularies. Since most PBMs have been unable to differentiate 340B claims from others, some manufacturers have refused to pay rebates to avoid being subjected to both a 340B discount and a rebate on the same drug. NCPDP’s new 340B code will help PBMs identify 340B prescriptions and collect rebates on non-340B claims.
For point-of-sale identification, a pharmacy would place the value “20” in the Submission Clarification Code (420-DK) field in the Claim Segment of a Claim Billing (B1) transaction. To retroactively identify a claim, a pharmacy would submit the same value in an Information Reporting (N1) transaction. The retroactive identification process allows a pharmacy to flag a previously submitted claim as 340B without having to reverse and resubmit the claim.
Pharmacies with physical 340B inventories will likely use point-of-sale identification while those with virtual 340B inventories will probably use retroactive identification. They will be able to use the point-of-sale method only if 100 percent of the dispensed drug was purchased through the 340B program, however. For example, the point-of-sale method could not be used for a compound made of 340B and non-340B drugs.
In a reference guide, NCPDP clarified that it is not necessary for pharmacies to submit a drug’s 340B price when they use the 340B prescription identifier. Also, NCPDP’s 340B Task Group is creating a template that pharmacies could use to retroactively identify 340B claims in batch format.[/ms-protect-content]