Visante attended the 2024 340B Coalition Summer Conference from July 8-10. The event was packed with information and we learned a lot through chatting with other members of the 340B community. These are our top three takeaways:
Three Things We Learned About the Ever-Changing World of 340B
1. Contract Pharmacy Restrictions
Over the past four years, 37 manufacturers have continued to restrict 340B pricing for covered entities’ contract pharmacy arrangements. Originally, this targeted hospitals only. It has now evolved to include all covered entity types. The complexities of these restrictions are burdensome on the covered entity, not only from an operational perspective but financially as well. We must not lose sight of the impact on the patients that these covered entities serve.
Covered entities serve the most vulnerable patients who have extremely limited financial resources. The restrictions impact the patient’s ability to purchase prescribed drugs at 340B pricing. Not only are there multiple manufacturers requiring data submission of claims, but the policy of the manufacturers also changes frequently, some without notice to the covered entity. These restrictions have been a driving force behind covered entities developing new strategic outcomes such as opening an in-house pharmacy. This is under litigation as to whether the manufacturers can, by statute, restrict 340B pricing.
2. States’ Response to Contract Pharmacy Restriction
Arkansas and Louisiana were the first two states to pass legislation that deemed the restrictions illegal. Many of the manufacturers changed their policies specific to these states allowing covered entities access to 340B pricing. This will continue to be litigated in court.
Eight states have passed laws banning manufacturer restrictions on 340B pricing at contract pharmacies. Bills in several other states are making their way through the legislature. This is one avenue for states to battle against manufacturer restrictions.
3. Update to HRSA Audits
HRSA audits focus on preventing duplicate discounts. A duplicate discount occurs when a covered entity purchases a drug at 340B pricing, and Medicaid receives a rebate for the same drug from the manufacturer. Previously, HRSA audits focused solely on fee-for-service Medicaid claims to identify duplicate discounts. This included reviewing the UB-04 form to verify that the covered entity did bill their state Medicaid office with the required billing modifiers along with reviewing the Medicaid exclusion file from OPAIS.
In recent audits, HRSA has requested such documentation for managed Medicaid claims (MCO). This shift seems to signal that the focus has turned to determining if duplicate discounts have occurred specific to MCO claims. HRSA has started to audit that the information contained in OPAIS, such as the covered entity’s DSH percentage, corresponds to the most recently filed Medicare Cost Report. This is a shift from what HRSA audited in the past. We recommend that all covered entities verify that no updates are needed after filing their MCR each year. If such changes are needed, ensure a process is in place to update OPAIS as soon as possible after the MCR is filed.
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