340bemployed.org

Your Free Source for 340B News and Commentary

  • Home
  • About Us
  • Employers
  • Job Seekers
  • Advertise
  • 340B Health

OIG Examines How States Exclude 340B Claims From Medicaid MCO Rebate Requests

21 states have adopted ways to guard against duplicate discounts, study finds
 

Print Article

September 20, 2012—Twenty one of the 25 states that use managed care organizations (MCOs) to administer their Medicaid pharmacy benefit have procedures to exclude 340B claims from their Medicaid MCO drug rebate requests, a new report has found.

The report, by the U.S. Department of Health and Human Services Office of Inspector General (OIG), focuses primarily on what states are doing to collect rebates on Medicaid managed care drugs.[ms-protect-content id=”2799″] It found that 21 states use one of two safeguards against duplicate discounts on Medicaid MCO drugs: (1) They instruct MCOs to indicate if a claim was submitted by a 340B covered entity, or (2) they use the Office of Pharmacy Affairs’ (OPA) Medicaid exclusion file to determine whether a claim came from a 340B provider. The report did not indicate which states use which method.

The 21 states are: Arizona, California, Florida, Georgia, Hawaii, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New York, New Mexico, Oregon, Pennsylvania, South Carolina, Virginia, and Washington.

Four states—the District of Columbia, New Jersey, Ohio, and West Virginia— did not report having a method for excluding 340B claims.

Of the remaining states, 15 use the Medicaid fee-for-service (FFS) system to pay for Medicaid MCO drugs and 10 do not contract with Medicaid MCOs. One state did not respond to the OIG survey.

The Affordable Care Act (ACA) expanded the Medicaid rebate program to include managed care drugs but exempted 340B drugs from the expansion. The law, however, did not specify how states should exclude 340B claims from their Medicaid MCO rebate requests.

In general, 340B reimbursement is often favorable under Medicaid managed care and unfavorable under Medicaid FFS. As a result, safety-net providers have an incentive to carve their 340B drugs into Medicaid managed care and out of Medicaid FFS. OPA, however, has not given covered entities a way to indicate that they have different 340B drug purchase polices for Medicaid MCO and Medicaid FFS beneficiaries. Before ACA, it was clear that the OPA Medicaid exclusion file applied to FFS drugs only. Since ACA was enacted, no federal guidance has been released stating that the file applies to both FFS and MCO drugs. The OIG report indicates that some states are using the exclusion file for both categories of drugs, a situation that many covered entities might not be aware of.[/ms-protect-content]

 

Follow us on X

340B Health Follow

340B Health is the leading advocate & resource for hospitals that serve their communities by participating in the 340B drug pricing program. #Protect340B

340BHealth
340bhealth 340B Health @340bhealth ·
5 Jun

#340B hospitals provide more than three-quarters of Medicaid hospital services while representing less than half of hospitals nationwide. 340B brings affordable care and health equity. #Protect340B

Reply on Twitter 2062953094984376406 Retweet on Twitter 2062953094984376406 1 Like on Twitter 2062953094984376406 Twitter 2062953094984376406
340bhealth 340B Health @340bhealth ·
4 Jun

#340B helps all patients receive equitable medical care, even those many miles or a body of water away. And for states like Alaska, where 75% of communities lack direct road access to a hospital and have an average 10.5% poverty rate, every penny counts toward resources that

Reply on Twitter 2062560005014831383 Retweet on Twitter 2062560005014831383 Like on Twitter 2062560005014831383 1 Twitter 2062560005014831383
340bhealth 340B Health @340bhealth ·
3 Jun

#340B helps safety-net hospitals reinvest their savings into their communities. Drug company discounts, not taxpayers, cover the cost of this care and expanded services. #Protect340B, protect vulnerable communities.

Reply on Twitter 2062227312180068426 Retweet on Twitter 2062227312180068426 Like on Twitter 2062227312180068426 Twitter 2062227312180068426
Load More

RSS 340B Informed

  • An In-Depth Look at Total 340B Purchases
  • Ideas for 340B Changes Could Lead to Legislation
  • Help From 340B After a Rare Diagnosis and an Unaffordable Bill

Copyright © 2026 · 340B Health