October 16, 2013—Minnesota safety-net health care providers are bracing for a significant reduction in Medicaid fee for service (FFS) reimbursement for 340B drugs starting on Jan. 1.[ms-protect-content id=”2799″]
Under a far-ranging tax bill passed by state lawmakers and signed by Gov. Mark Dayton (D), beginning next year the state Medicaid program will reimburse 340B drugs dispensed by a pharmacy at wholesale acquisition cost (WAC) minus 40 percent plus a $3.65 dispensing fee. In addition, 340B drugs administered in an outpatient setting will be reimbursed at 20 percent off the lower of: the provider’s usual and customary charge; average sales price (ASP) plus 6 percent; the state’s specialty pharmacy rate; or the maximum allowable cost set by the state.
Under the system being replaced, each provider that uses 340B drugs for Medicaid beneficiaries negotiates its reimbursement with the state individually. The governor’s office, which proposed the change, said it would both standardize reimbursement and save the state money. Although the rates approved by the legislature are not as austere as those proposed by the governor, Minnesota 340B providers say they will reduce reimbursement for 340B drugs significantly.
In a related development, Minnesota Medicaid has issued a notice outlining how providers are to bill Medicaid fee for service (FFS) and managed care for 340B drugs. [/ms-protect-content]