340B Purchased Drugs

Public Act 097-0689 (pdf), referred to as the Save Medicaid Access and Resources Together (SMART) Act, requires that any provider enrolled with the Department, that bills the Department for outpatient drugs, and is eligible to enroll in the federal Drug Pricing Program under Section 340B of the federal Public Health Services Act shall enroll in that Program. No entity participating in the federal Drug Pricing Program under Section 340B of the federal Public Health Act may exclude Medicaid from their participation in that program.

Frequently Asked Questions (updated October 1, 2014)

 

What is the status of the requirement for Contract Pharmacies to participate in the 340B program?
Contract pharmacies may not bill the department for 340B-purchased drugs.  The department has made the decision to delay indefinitely the requirement that 340B Covered Entities bill the department using 340B stock, and charge 340B actual acquisition cost (AAC), when the drug is being dispensed by a Contract Pharmacy.
How does a facility enroll in the 340B program?

Entities that are eligible for enrollment into the 340B program can find detailed information about enrollment on the Health Resources and Services Administration's Office of Pharmacy Affairs (OPA) Webpage.

The effective dates for this requirement are as follows:  October 1, 2012, for 340B providers who own and/or operate a pharmacy that bills the Department for drugs; July 1, 2013, for providers who are eligible to participate in the 340B program as Hemophilia Treatment Centers (HTCs); and January 1, 2013, for all other 340B eligible providers who bill the Department for drugs.
The effective dates for this requirement are as follows: October 1, 2012, for 340B providers who own and/or operate a pharmacy that bills the Department for drugs; July 1, 2013, for providers who are eligible to participate in the 340B program as Hemophilia Treatment Centers (HTCs); and January 1, 2013, for all other 340B-eligible providers who bill the Department for drugs.
Are out of state providers expected to follow the policy on using 340B drugs for Medicaid participants in Illinois?
Out of state providers are not required to use 340B drugs for Medicaid participants unless they do so in their "home state." Out of state providers are required to bill the department no more than their AAC when submitting drug claims.
Can an HFS enrolled provider enrolled in the 340B federal drug pricing program charge the department something other than actual acquisition cost (AAC)?

Pharmacy providers submitting claims through the point-of-sale system for drugs purchased through the 340B program must charge the department no more than the AAC for the drug product.

Non-Pharmacy providers submitting fee-for-service claims using the HFS 2360(pdf) or HIPAA 837 Professional Claim Form must charge the department no more than the AAC for the drug product.

Hospitals do not have to report their AAC on 340B purchased drugs on institutional claims, as charges will not impact the payment calculation. Hospitals are required to bill AAC on renal claims containing 340B purchased drugs on the renal drug list. The taxonomy code for an 837I transaction for a provider type 30 – General Hospital with category of service 025 – Outpatient Renal Dialysis is 261QE0700X

What is the dispensing fee for 340B purchased drugs?

The department pays enrolled pharmacies a $12 dispensing fee for all 340B drugs effective February 1, 2013. The provider charge should be the AAC plus the dispensing fee.

The department will pay non pharmacy providers a $12 dispensing fee add-on, with the exception of certain Birth Control Methods which will receive a $35 dispensing fee add-on. The provider charge should be the AAC plus the dispensing fee add-on.

Will providers be paid a dispensing fee add-on if a drug on the Renal Injectable Drug Listing is provided in conjunction with Renal Dialysis, and billed on the 837I Institutional Claim?

Yes, See the HFS Reimbursement page. In order to receive the $12 dispensing fee add-on, providers must identify 340B purchased drugs by reporting modifier “UD” in conjunction with the appropriate procedure code.  The provider should charge the AAC plus the $12 dispensing fee add-on.

Will a dispensing fee be paid if a 340B drug is billed on a Medicare crossover claim?
No, they will not be eligible for the dispensing fee.  Please see the department’s Informational Notice for more information.
Who receives the dispensing fee?
The dispensing fee is paid to the enrolled provider that submits the claim.
How should the dispensing fee be reported on the claim?

If the drug is identified as a 340B drug by populating the Submission Clarification Code (420-DK) field with a value of 20 on a pharmacy claim, the provider is required to add the dispensing fee to the provider charge.
 
If a drug is identified as a 340B drug by reporting modifier “UD” in conjunction with the appropriate procedure code, the provider is required to add the $12 or $35 dispensing fee add-on to the AAC.

Do the 340B requirements apply to Medicaid Managed Care Organizations' (MCOs)?
Yes, the requirement does apply to MCO’s. The billing requirements are identical to the fee-for-service in Medicaid. Please see the department’s $12 Dispensing Fee for 340B Purchased Drugs provider notice for more information
If a pharmacy is Disproportionate Share Hospital (DSH), but is enrolled as a pharmacy with HFS, does the provider  need to start billing AAC on October 1, 2012, or January 1, 2013?

Effective October 1, 2012, the provider would have started billing AAC.

Does the requirement in number 12 apply to all drugs?
Yes, this requirement applies to all 340B purchased drugs for outpatient use, so that the department will not claim rebate.
If the pharmacy does not know at time of dispensing that it is a 340B eligible patient and bills the department their usual and customary rate, how is that resolved when the pharmacy finds out retrospectively that it is a 340B patient and drug?
The pharmacy should void and re-bill the claim using 340B pricing identifying the drug as 340B using the Submission Clarification Code of 20.
Does HFS need to know how the 340B drugs are tracked within an organization?
No.
When is it required that a hospital bill with the actual AAC for a 340B drug?
Effective for dates of service on or after July 1, 2014, hospitals will no longer be required to report the AAC on 340B-purchased drugs on outpatient institutional claims. This change comes as a result of an update to the Enhanced Ambulatory Patient Group (EAPG) pricing logic. However, hospitals and renal dialysis facilities must continue to report the AAC on renal dialysis claims containing 340B purchased drugs identified on the Medicaid Reimbursement web page, under the Renal Dialysis Injectable Drug Listing. Providers must bill all 340B-purchased drugs with the UD modifier to ensure proper reporting under the federal Drug Rebate Program.
Does  the 340B billing requirement apply to Medicare Crossover claims?
The “UD” modifier is required, but reporting of the AAC for the 340B drug is not.

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