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H H S Department of Health and Human Services
Health Resources and Services Administration
Health Resources and Services Administration

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Medicaid Exclusion/Duplicate Discount Prohibition

42 USC 256b(a)(5)(A)(i) prohibits duplicate discounts; that is, manufacturers are not required to provide a discounted 340B price and a Medicaid drug rebate for the same drug.  Covered entities must have mechanisms in place to prevent duplicate discounts.

All covered entities that use 340B and bill Medicaid must follow these rules:

  1. Upon enrollment in the 340B Program, covered entities must determine whether they will use 340B drugs for their Medicaid patients (carve-in) or whether they will purchase drugs for their Medicaid patients through other mechanisms (carve-out). 
    • Covered entities that will carve-in are required to inform HRSA (by providing their Medicaid provider number/NPI) at the time they enroll in the 340B Program that they will purchase and dispense 340B drugs for their Medicaid patients. If covered entities decide to bill to Medicaid for drugs purchased under 340B with a Medicaid provider number/NPI, then ALL drugs billed to that number must be purchased under 340B and that Medicaid provider number/NPI must be listed on the HRSA Medicaid Exclusion File.
    • For covered entities that opt to purchase Medicaid drugs outside of the 340B Program, e.g., carve-out Medicaid prescriptions, ALL drugs billed under that Medicaid provider number/NPI must be purchased outside the 340B Program, and that Medicaid provider number/NPI should not be listed on the HRSA Medicaid Exclusion File.
  2. Report any changes in billing of 340B drugs to Medicaid to the Office of Pharmacy Affairs before implementing the billing change. It is your responsibility as a 340B covered entity to ensure that your information in the HRSA Medicaid Exclusion File is correct.
  3. If you cannot comply or want to use alternative methods to prevent duplicate discounts, work with your State Medicaid agency and the Office of Pharmacy Affairs to establish sufficient safeguards.

Duplicate Discount Resources  

Medicaid Billing and Avoiding Duplicate Discounts Exit Disclaimer. recorded webinar

Search the Medicaid Exclusion File of 340B participants that bill Medicaid for 340B-purchased drugs

Program Integrity

340B Drug Pricing Program covered entities must ensure program integrity and maintain accurate records documenting compliance with all 340B Program requirements.

Covered entities are subject to audit by manufacturers or the federal government. Failure to comply may make the 340B covered entity liable to manufacturers for refunds of discounts obtained.

Learn more: Program Integrity

Questions, contact ApexusAnswers@340BPVP.com or call 1-888-340-2787 Monday through Friday 8:30am to 6:30pm