June 12, 2013—Medicaid officials in three states have recently issued provider bulletins clarifying the procedures for billing 340B drugs used for fee for service (FFS) and managed care beneficiaries.[ms-protect-content id=”2799″]
In Minnesota, the state Medicaid agency published a May 16 update on its website reminding safety-net providers that carve-in 340B FFS and managed care drugs into Medicaid that they must submit retail pharmacy claims with the value “20” in the submission clarification code field 420-DK. Also, those using 340B drugs for Medicaid FFS recipients must bill “at a discounted rate” approved by the state, not at their usual and customary rate. 340B contract pharmacies, it said, must carve out Medicaid FFS.
If a Minnesota 340B covered entity carves out Medicaid FFS, it must also carve out Medicaid managed care, the update noted. The state’s 340B contract pharmacies can either carve in or carve out Medicaid managed care prescriptions. If they choose to carve in, they must submit such claims with the value “20” and verify with the managed care organization that the submission clarification code entry will be forwarded to the state Department of Human Services.
Oregon Medicaid, meanwhile, recently sent 340B providers a memo reminding them that it expects them to bill at actual acquisition cost (AAC) for both FFS and managed care 340B drugs. Some state Medicaid agencies mandate AAC billing for 340B drugs even though there is no federal requirement that they do so.
Oregon said it was prompted to act after it had “come to our attention that some 340B pharmacies are billing some Oregon Medicaid prescriptions at a rate higher than federal 340B pricing.”
“We would like to remind you that 340B pharmacies are expected to bill actual acquisition cost for 340B drugs” plus a dispensing fee, the memo stated. The fee for FFS drugs is specified in Oregon Medicaid’s pharmacy manual. The fee for managed care drugs is negotiated between 340B pharmacies and managed care plans.
In Hawaii, state Medicaid officials recently told 340B covered entities to begin submitting a quarterly spreadsheet listing all non-340B drugs given to Medicaid managed care beneficiaries and paid for by a managed care plan. The state said the requirement makes it easier for it to exclude 340B drugs from its rebate requests to manufacturers, as required under federal law.
The new requirement replaces one issued in May 2012. That guidance required 340B covered entities to obtain and use a second National Provider Identifier (NPI) when billing 340B Medicaid managed care drugs. In contrast, the new method does not require providers to identify whether a drug is 340B at the time of administration or dispensing.
Under the new guidance, covered entities must submit their reports to the state within 21 days of the end of the quarter. The report must include the entity’s NPI, National Drug Codes (NDCs), patients’ last names, paid claim numbers, managed care plans’ names, service dates, paid dates, number of units, reimbursement amounts, adjustment codes (if applicable), and patients’ Medicaid identification numbers. Entities will be able to continue to bill 340B Medicaid managed care drugs at contracted rates. Entities that completely carve out or use only 340B drugs for Medicaid managed care patients will not need to submit a report.[/ms-protect-content]