• Carved Out or Carved Up? New 340B Rules in Colorado

  • By Mike Coughlin
    April 17, 2017

    This is a follow up to my memo of March 31, 2017, reporting that New York Department of Health effectively “carved-out” many Covered Entities from using 340B-priced drugs to fill Medicaid prescriptions. It was done through a rule change requiring pharmacies to positively identify prescriptions as 340B in the adjudication transaction or else Medicaid will claim the rebate and disallow those Covered Entities’ drug discount. Pharmacies unable to do this can no longer fill NY Medicaid prescriptions with 340B drugs.340B Prescription Rule Changes

    As explained in my previous memo, the positive identification procedure now being enforced in NY has always been used in ScriptPro’s 340B processing engine, which operates in real time inside its pharmacy management system.

    Other so-called split billing systems process accumulated data after the fact and rely on the HRSA Medicaid Exclusion File (MEF) to provide blanket advice to Medicaid when 340B-priced drugs are used. NY advised that it will no longer use the MEF effective April 1, blowing up this approach. Colorado Department of Health Care Policy & Financing has jumped on board this train with a “Dear 340B Provider” letter notifying of the same rule change effective June 1, 2017.

    There are clear signs that the requirement for transaction level reporting of 340B use is spreading. Absent the ability to conform to the reporting rules, a Covered Entity’s benefit from 340B will be reduced. This will carve-up their well-intentioned efforts to use the financial support of 340B drug prices to serve indigent patients with critical needs. This challenge will only increase regardless of what happens with the Affordable Care Act.

    With ScriptPro’s powerfully integrated 340B/SP Central Pharmacy Management System engine, this does not need to occur. We are able to adjust and protect a Covered Entity’s ability to access 340B drug prices in accordance with the law and evolving regulations. System shortcuts and inadequacies should not undermine the objective of the 340B program to financially assist healthcare systems in serving their neediest patients.