Biotechs and Providers Weigh in on 340B Medicaid MCO Drug Proposed Rule

by admin | July 30, 2015 3:22 pm

July 30, 2015—Biopharmaceutical manufacturers and healthcare providers say they appreciate the Centers for Medicare & Medicaid Services’ proposed regulation that would make Medicaid managed care organizations responsible for identifying 340B claims in the Medicaid MCO context. But the two differ about how the requirement should be carried out.

[ms-protect-content id=”2799″]

July 27 was the deadline for public comments on the proposed rule, which CMS published on June 1[1].

In comments submitted jointly, nine groups representing 340B healthcare providers said MCOs and states should be barred from using the 340B program’s Medicaid exclusion file to determine which claims for 340B-purchased drugs to include or exclude from their Medicaid MCO rebate requests. In December 2014[2], the Health Resources and Services Administration issued a 340B program policy release to clarify that it created the exclusion file “to help 340B covered entities, states, and manufacturers avoid duplicate discounts specific to” Medicaid fee for service.

In addition, the provider groups said in their comments that MCOs and states should be required to develop retrospective 340B claim identification methods. Many providers’ outpatient pharmacies and contract pharmacies manage their 340B drug inventories using a replenishment model, the groups noted. “For such pharmacies, 340B patient eligibility determinations are usually made after a drug is dispensed to a patient,” they explained. “The pharmacies do not know at the [point of sale] whether a claim is for a 340B drug. Therefore, a single methodology requiring identification of all 340B claims at the [point of sale] would not work for these pharmacies.”

MCOs should have flexibility in developing procedures to avoid 340B duplicate discounts, the providers said. States, too, should have the flexibility to adopt procedures that do not require MCOs to identify and remove 340B claims from their utilization reports to the state, using information that covered entities submit, they said. For example, they pointed out, Oregon has a retrospective identification mechanism that lets entities send the state’s rebate contractor a quarterly claims file for 340B Medicaid MCO drugs dispensed by the entities’ contract pharmacies.

The Biotechnology Industry Organization took a different position on how to prevent 340B duplicate discounts on Medicaid MCO drugs in its comments. (Comments by Pharmaceutical Research and Manufacturers of America’s had not yet appeared on the federal Regulations.gov website as of the morning of July 30.)

BIO urged CMS to impose claims data collection and reporting requirements on MCOs that, in turn, would effectively require 340B covered entities to identify 340B-purchased drugs dispensed to Medicaid MCO beneficiaries in real time using National Council for Prescription Drug Programs 340B submission clarification code value “20.” If an entity is unable to identify a claim as 340B to an MCO using the “20” code in real time, BIO recommended it should have to do so in a second “N1” claims transmission to the MCO sometime after the fact. For physician-administered drugs, BIO asked CMS to require entities to identify 340B-purchased drugs on claims submitted to MCOs with a “UD” modifier.

BIO said MCOs should be directed under their contracts with states to use the above claims-level data in combination with the 340B Medicaid exclusion file to identify providers that use 340B drugs for Medicaid patients and exclude all claims from them from states’ rebate requests.

“We note that this process is complicated by the fact that, due to the ‘replenishment model’ widely used by covered entities, 340B status is generally determined retroactively, rather than at the point-of-sale,” BIO wrote. “We strongly urge CMS to work with HRSA to either ensure that there are mechanisms for managed care plans and states to identify this utilization as 340B, or to prohibit the retroactive identification of 340B claims in this manner.”

BIO also asked CMS to make 340B-related claims data readily available to drug manufacturers to assist them in verifying providers’ compliance with the 340B duplicate discount prohibition. In addition, it urged CMS “to add a standard contract term requiring Medicaid MCOs to have Medicaid-specific Bank Identification Number and Processor Control Number combinations (BIN/PCNs).”  The provider groups that submitted joint comments likewise asked CMS to require MCOs or their pharmacy benefit managers to use unique BIN-PCN combinations for their Medicaid plans and to share the combinations with covered entities.[/ms-protect-content]

Source URL: https://340bemployed.org/biotechs-and-providers-weigh-in-on-340b-medicaid-mco-drug-proposed-rule/

---