November 2, 2016—Delaware Medicaid has dropped what was thought to be a first-of-its-kind state requirement that would have barred healthcare providers from using 340B-purchased drugs for Medicaid beneficiaries. [ms-protect-content id=”2799″]
Under a modified Delaware Medicaid state plan amendment approved by the Centers for Medicare & Medicaid Services Oct. 13, Delaware healthcare providers instead will have to request to use 340B-purchased drugs “for all [Delaware Medicaid] patients, including Medicaid fee-for-service patients and patients whose care is covered by Medicaid Managed Care Organizations.” Several states have similar requirements. The effective date is Jan. 1, 2016.
The original state plan amendment that Delaware Medicaid adopted last January, subject to CMS approval, would have prohibited providers that buy drugs through 340B “from using their stock for [Delaware Medicaid] patients either directly or through coverage of the Managed Care Organization.” It would have been the nation’s first CMS-approved Medicaid 340B carve-out requirement. Two states, California and Illinois, require their 340B covered entities to carve-in Medicaid and bill at no more than actual acquisition cost.
“Drug manufacturers use the potential for a 340B discounted price to dispute rebate payment,” Delaware Medicaid said in the original state plan amendment’s preamble. “Prohibiting the use of 340B-purchased medications for Medicaid patients…will simplify the rebate program and eliminate one area for provider audits.”
340B Health, an association of hospitals and healthcare systems in the 340B drug discount program, and other provider groups wrote to and met with CMS to express concerns about Delaware’s original plan. The groups said the plan was contrary to federal law and congressional intent and based on inaccurate information about how the state’s providers use 340B drugs for Medicaid patients. The groups also said they were concerned about the harm providers outside of Delaware would suffer if other states established carve-out requirements.
Delaware’s modified state plan amendment also requires 340B providers to charge no more than a drug’s actual acquisition cost, which must be supported by documentation, plus a $10 professional dispensing fee. A new draft state plan amendment recently published by the state for public comment clarifies that the actual acquisition cost billing requirement and $10 dispensing fee apply to both dispensed and physician-administered 340B drugs. The draft also states that 340B drugs dispensed by contract pharmacies are not covered but not does clarify whether the rule applies to both fee-for-service and managed care Medicaid, or just fee-for-service. [/ms-protect-content]