Navigating the Complex Landscape of Medicaid Billing for 340B Covered Entities

Navigating the Complex Landscape of Medicaid Billing for 340B Covered Entities‍

The 340B Program, designed to increase access to care for underserved and underinsured communities, has been a cornerstone of healthcare in the United States since the early 1990s. To ensure Program integrity, there are a number of requirements for continued participation in the 340B Program, one of which is preventing duplicate discounts. Duplicate discounts can have significant financial implications for drug manufacturers and repercussions for healthcare organizations, so are a common area of focus for 340B compliance. Our team breaks down the concept of duplicate discounts in the 340B Program and discusses how healthcare providers can navigate this complex landscape.

What is a Duplicate Discount?‍

A duplicate discount occurs when a 340B covered entity receives the 340B discount on a medication they purchased, and Medicaid Fee-For-Service (FFS) also seeks a rebate from the manufacturer for the same medication. In essence, it's a situation where a pharmaceutical manufacturer is subjected to providing both a discount on the front end and a rebate on the back end for the same drug. This not only creates financial complications, but is prohibited and carries compliance concerns.‍

‍

Preventing Duplicate Discounts‍

Preventing duplicate discounts is essential, but it's a multifaceted challenge that involves aligning federal requirements, state regulations, and an organization's operational procedures. Here's how healthcare providers can mitigate this risk:

1. Federal Requirements: Covered entities need to have a solid understanding of how the 340B Program operates at the federal level. This includes accurately indicating on the Medicaid Exclusion File (MEF) through the OPAIS database whether the entity will bill FFS Medicaid for 340B-purchased drugs (carve-in) or not (carve-out). If the entity elects to carve-in, they must also indicate which states’ Medicaid plans they will bill in this fashion, and which Medicaid Provider Numbers (MPNs) and National Provider Identifiers (NPIs) will be used to bill each state for 340B-purchased drugs.

2. State-Specific Medicaid Requirements: Each state is responsible for implementing a system to identify claims for drugs that have been purchased at a 340B price, and covered entities that elect to carve-in are responsible for complying with each state’s duplicate discount prevention process. Some states simply rely on the list of MPNs and NPIs listed in the MEF, to exclude any claims billed with those identifiers from manufacturer rebate requests. Other states require covered entities to attach a specific modifier to each drug line item billed to Medicaid to prevent them from being included in manufacturer rebate requests.

‍

‍

3. Organization's Capabilities: Healthcare entities must evaluate their internal capabilities, such as the ability to address billing requirements. This includes using billing modifiers on claims billed to Medicaid, for states that require them. Our team works with covered entities to add the modifiers into your pharmacy’s software, where it’s added automatically depending on the rules of the claim. This ensures that the software will add the modifier when it’s required, but it will leave it off when it is not needed.

4. Medicaid Exclusion File: Ensuring the accuracy of the Medicaid exclusion file listed on OPAIS is vital. Inaccuracies can lead to compliance issues and potentially require corrective action plans in the event of a HRSA audit. Our team works with the covered entity’s billing department to understand the billing numbers that are being used to submit the health center’s or pharmacy’s bills. Oftentimes, our team discovers that health centers are not billing under the same number that they’ve listed on the MEF. They may actually be billing under the organization’s main NPI or their main billing number instead. Double-checking for these discrepancies ensures that there are no manufacturer repayments, or inaccurate database findings and corrective action plans that need to take place following a HRSA audit.

5. Medicaid Managed Care Organizations (MCOs): Understanding the distinction between Medicaid FFS and Medicaid MCO is crucial. While covered entities are primarily responsible for preventing duplicate discounts in FFS, the responsibility may be on the state for Medicaid MCOs. However, healthcare providers need to be aware of their state's specific mechanism for preventing duplicate discounts in MCOs. Our team works with health centers, in-house pharmacies, and contract pharmacies to review 100% of provided claims for Medicaid FFS and MCO payers. If we discover that any Medicaid plans were billed, we work with our clients and those TPAs to reverse the claims and make sure those plans are blocked out so they aren’t billed in the future.

Remaining Compliant

To ensure compliance and prevent duplicate discounts, healthcare providers can take several proactive steps:

1. Assess Medicaid Billing Practices: Regularly review and assess Medicaid billing practices within your organization, making sure they align with both federal and state requirements. You can reach out to your Medicaid billing office directly to identify this information.

2. Stay Informed: Keep track of any changes in state Medicaid billing requirements by contacting the state's Medicaid office, checking their official documents, or referring to resources like Apexus 340B Prime Vendor Programwebsite.

3. Preparation for HRSA Audits: It is crucial to begin with the end in mind. In the event of a HRSA audit, health centers should be well-prepared, particularly for the Medicaid section. Ensure all policies and procedures are documented and that billing forms for each site are readily available. If you bill for medications, make sure those are included on your billing statement as well. Make sure to specify if you bill your items bundled or separately. It is important to understand that HRSA will audit claims that are processed under Medicaid FFS to ensure duplicate discount prevention. Since only Medicaid FFS is addressed in 340B Program Statute, HRSA auditors will not be testing your Medicaid MCO claims for compliance with State Medicaid MCO billing requirements.

4. Requirements for Carving-In: If a health center is carving-in Medicaid FFS, HRSA expects proper safeguards to be in place and that the organization can describe and demonstrate those compliance measures. They’ll want to see how your policies and procedures address billing both Medicaid FFS and MCO, and understand how you’re billing Medicaid FFS at each site and pharmacy.

5. Seek Expert Assistance: For organizations seeking professional guidance and support in navigating the intricate world of 340B Medicaid billing, specialized teams, such as FQHC 340B Compliance, can provide invaluable assistance. Our team of experts can help assess processes, identify potential compliance risks, and help organizations establish robust 340B Programs.

‍

Preventing duplicate discounts is a critical element of maintaining 340B Program compliance. With the right knowledge, processes, and expert guidance, healthcare providers can ensure that they are compliant with federal and state regulations and fully prepared for HRSA audits. This proactive approach ultimately safeguards their financial stability and helps them continue to deliver essential healthcare services to their communities. FQHC340B Compliance is here to assist you as you navigate Medicaid billing for 340B covered entities. If you are unsure how to understand and monitor your Medicaid billing within the 340B Program and need assistance, reach out to our team of experts today.

‍

***

_{FQHC 340B Compliance is the dedicated partner for Federally Qualified Health Centers seeking assistance with the 340B Program. Their mission is to provide the necessary resources to secure and optimize the 340B Program, enabling health centers to offer more comprehensive services to those in need. With a focus on improved compliance and oversight, they act as more than just consultants or automated systems, tailoring their services to meet your health center's unique needs. Visit their website, call (760) 780-7469, or email admin@fqhc340b.com to learn more about FQHC 340B Compliance and how they can help your health center thrive.}‍