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H H S Department of Health and Human Services
Health Resources and Services Administration
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Medicaid Exclusion File/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 in 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 in 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. 

Additional Clarifications of the Medicaid Exclusion File (MEF) 

Covered entities are responsible for the accuracy of the information in the MEF. The MEF lists covered entities that have decided to use 340B drugs for their Medicaid patients and to bill Medicaid for those drugs (carve-in). When covered entities choose to carve-in for Medicaid, they must provide the HRSA Office of Pharmacy Affairs with the Medicaid Provider Number/NPI used to bill Medicaid. These provider identifiers are listed in the MEF. Having this information in the MEF indicates to the states and manufacturers which drugs are not subject to Medicaid rebates, and helps ensure the prevention of duplicate discounts, as prohibited by statute. Covered entities are required to ensure that information in the MEF is accurate each quarter and at the time of annual recertification. 

The “start date” and “term date” are data fields in the MEF and represent, respectively, the first date the covered entity began participating in the 340B Program and the effective date the entity no longer participates in the 340B Program, if applicable. These dates DO NOT relate to the covered entities MEF determination to carve-in Medicaid. 

The “Medicaid State” field identifies the state that is billed with the Medicaid Provider Number listed in the MEF. The “State” field simply lists the state jurisdiction where the covered entity is located. 

Covered entities may request changes to their “carve-in” decision and/or the specific identifiers listed in the MEF at any time; however, these changes only take effect the following quarter and only if the change request is received, approved and processed by OPA before the time of the snapshot (i.e., the 15th day of the month prior to the start of the quarter). HRSA generally does not make retroactive changes to the quarterly MEF once it is published. On rare occasion, a technical system issue may warrant an immediate modification. If retroactive changes are necessary, HRSA will communicate this to the 340B Program stakeholders.

Duplicate Discount Resources 

Clarification of use of the Medicaid Exclusion File Replaces No. 2013-2 (PDF - 70 KB) 12/12/2014

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

The Medicaid Exclusion File: Important Clarifications (PDF - 49 KB) 10/09/2015

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 or call 1-888-340-2787 Monday through Friday 8:30am to 6:30pm