Split billing company, suggestion on Medicaid Claims for Contract Pharmacy? Consider this

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Split billing company, suggestion on Medicaid Claims for Contract Pharmacy? Consider this

When your split billing company suggests it is Ok to include Managed Care Medicaid claims for contract pharmacy, please consider the following:

Allowing managed (MCO) Medicaid 340B accumulations, for contract pharmacy, is not worth the risk because at the end of the day it would likely be the covered entity that would have to work out the impact with the manufacturer (and potentially HRSA if it were Material).

Apexus sticks to its advice that,

340B drugs should not be used in a contract pharmacy situation for Medicaid patients unless there is an arrangement to prevent duplicate discounts that has been reported to HRSA in collaboration with the state Medicaid agency” – note they do not make special exception or have different advice for MCO claims.

HRSA in its 2014 guidance declines to specifically address MCO claims in that policy but recognizes it is an issue and discusses ways some CEs must prevent it.

Some split billing vendors suggest that because the 2014 HRSA guidance fails to address MCO claims that HRSA is not able to audit or produce findings in the area of MCO and duplicate discount.  One might ask the TPA if they would be willing to take on responsibility in the event of a finding, but I haven’t found one yet that does. Which solidifies the point that the Covered Entity (CE) is ultimately responsible.

Here is an excerpt from the HRSA website with a link to the 2010 Notice regarding Contract Pharmacy Services and 2014 clarification of the Medicaid Exclusion File:

340B drugs may not be used for Medicaid patients at a contract pharmacy, absent an arrangement between the contract pharmacy, covered entity, and state Medicaid agency to prevent duplicate discounts. Any such arrangement shall be reported to the HRSA Office of Pharmacy Affairs by the covered entity. For additional information, see the 2010 Federal Register notice and the 2014 HRSA notice.

Even though policy fails to specifically address MCO, the policy suggests examples of how to prevent the issue and that ultimately it would be advised to work with the state:

  • Section 2501(c) further amended the SSA to specify that covered outpatient drugs covered by a Medicaid Managed Care Organization (MCO) are not subject to a rebate if also subject to a discount under section 340B of the PHSA
  • The 2014 notice does not apply to the prevention of duplicate discounts that may occur under MCOs, but recognizes the need to address covered entities’ role in preventing duplicate discounts under Medicaid managed care, and is working with CMS to develop policy in this regard. We are aware that some covered entities have already worked with MCOs and state partners to develop models for the prevention of duplicate discounts. Some covered entities report using a variety of methods including, but not limited to, Bank Identification Numbers and/or Processor Control Numbers to identify patients of MCOs, National Council for Prescription Drug Programs (NCPDP) codes at the individual claim level for claims submitted through a point of sale (POS) system at a retail or clinic pharmacy (contract pharmacy), and UD Modifiers for physician administered claims or drug costs submitted as part of a bundled or capitated rate. In some cases, states may place certain requirements on covered entities regarding the prevention of duplicate discounts. HRSA encourages 340B covered entities to work with their state to develop strategies to prevent duplicate discounts on drugs reimbursed through MCOs.

In our experience, almost every State has a section in the department of health and human services pharmacy manual that specifies how the State would like MCO claims handled and whether or not the state seeks a rebate.  It is imperative that the CE become familiar with its State’s guidelines around prevention of duplicate discount.


About Author

Jennifer Hagen, PharmD, 340B ACE

Jennifer Hagen joined the Turnkey Pharmacy Solutions team in October of 2016. She has served in various pharmacy leadership positions including Director of Ambulatory Pharmacy Services for CentraCare Health for over 5 years. Dr. Hagen had operational responsibility for Infusion Pharmacy Services, the Health System’s four retail pharmacies, and was responsible for 340B compliance at St. Cloud Hospital, a 489 bed regional medical center. Jennifer has served as a HRSA peer-to-peer mentor for the past two years and has presented numerous times for 340B University and chaired round table events for 340B Health. Jennifer is a member of our 340B independent auditing team. Her perspective involves rural health program administration.

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