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340B and Medicaid Billing

Since its inception nearly three decades ago, the 340B Drug Pricing Program has enabled hospitals to better serve vulnerable and underprivileged patient populations by mitigating the rising costs of prescription drugs. According to the Health Resources and Services Administration (HRSA), covered entities can achieve an average savings of 25% to 50% in drug costs.  These savings not only lower the cost of receiving care for patients, but also allow covered entities to increase their level of commitment to other services. 

Maintaining a program that is compliant with HRSA oversight takes time and effort. Covered entities must have measures in place to ensure quality. One of these involves making sure that duplicate discounts do not occur.

Prevention of duplicate discounts

Drug manufacturers must avoid duplicate discounts and prevent double-dipping on 340B discounted drug rates in Medicaid Fee-for-Services (FFS) and Medicaid Managed Care Organization (MCO) programs. Manufacturers are not allowed to offer a drug at the 340B discounted rate to covered entities and pay rebates to state Medicaid programs for the same drug. 

To avoid duplicate discounts, covered entities should be mindful of the following:

  • If CARVE-IN:  Medicaid Exclusion File – include all NPIs/Medicaid Provider used for billing in areas where 340B drugs are used
  • If CARVE-OUT:  Ensure all BIN/PCN for FFS Medicaid are excluded from eligible transactions

State Medicaid billing requirements

States should have policies in place to prevent the occurrence of duplicate discounts. Covered entities should ensure that they are providing the following information to state Medicaid agencies to protect against double-dipping:

  • Modifiers applied
  • NPI/Medicaid Provider number
  • Submission of Claims billed to Medicaid to the state
  • Submission of correct charge on claim (AAC vs. U&C)

CPS 340B Solutions

CPS 340B Solutions can help your covered entity be certain that your organization is compliant with all HRSA and state regulations. Our team has been part of the 340B program since the beginning. We help covered entities maximize their program’s savings and clinical excellence. 

Interested in Learning More About How Your Covered Entity Can Avoid Double Billing?

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Posted: Tuesday, April 13, 2021

Tags: 340B,340B Contract Pharmacies,CPS, Blog