Date: April 15, 2021
To: All Medical Assistance Program Providers
Re: Billing Reminders for Providers
Participating in the 340B Program
notice is a reminder to providers of the information required when submitting claims
to the Department of Healthcare and Family Services (HFS) or one of the Medicaid
Managed Care Organizations (MCOs) for drugs purchased under the federal 340B
drug pricing program.
Section 340B of the Public Health Service Act limits the cost of covered outpatient drugs to specified
providers. These providers purchase pharmaceuticals at significantly discounted
prices. These providers are referred to as 340B providers.
Per 89 Ill.
Admin. Code Section 140.12, HFS requires a provider that is eligible to
participate in the 340B program to enroll in that program. No entity may
exclude Medicaid from their participation in the 340B program. A provider
enrolled in the 340B federal Drug Pricing Program must charge the Department no
more than its actual acquisition cost (AAC) for the drug product, plus the
Department’s established dispensing fee.
recent review of 340B billing practices, HFS has discovered a significant
number of providers are charging more than the AAC for the 340B-purchased
drugs, resulting in overpayment to those providers. Providers who review
their billing practices and find they have inadvertently billed more than the
AAC for 340B drugs should submit adjustments to void and rebill for the correct
payment amount. Providers who do not adjust their claims may be referred to the
Office of the Inspector General for possible audit.
notified providers via previous releases of the fields required for accurate
adjudication of claims containing 340B-purchased drugs. Those elements are
- Actual Acquisition Cost (AAC): Providers
cannot charge HFS more than the actual acquisition cost for the drug
- Dispensing Fee: The appropriate HFS established 340B
dispensing fee is to be added to the AAC when submitting a non-pharmacy claim. The
AAC (409-D9) and dispensing fee (412-DC) are submitted in separate fields when
submitting a pharmacy claim. The 340B dispensing fee for all providers remains
at $12.00. Certain Birth Control Methods will receive a $35.00 dispensing
- Healthcare Common Procedure Coding System
HCPCS code must be provided along with the appropriate National Drug Code (NDC)
for non-pharmacy claims.
– Non-Pharmacy Providers Only: Non-pharmacy providers must
identify 340B purchased drugs by entering Modifier “UD” in conjunction
with the appropriate HCPCS. For Institutional claims, Modifier “UD” must
be the first modifier listed after the HCPCS code.
- National Drug Code (NDC): An NDC must be provided for non-pharmacy
claims that is applicable to the HCPCS code provided.
- Provider Charge: The provider charge can be no more than the
AAC for the product, plus the Department established dispensing fee.
- Submission Clarification Code: Pharmacy
Providers submitting claims through the point-of-sale system must
identify 340B purchased drugs by populating the Submission Clarification Code
for 340B Non-compound
claims with (423-DN) Basis Of Cost Determination = ‘08’ and (420-DK) Submission
Clarification Code = ‘20’. 340B Compound claims must be submitted with at
least one ingredient having (490-UE) Compound Ingredient Basis of Cost
Determination = ‘08’ and (420-DK) Submission Clarification Code = ‘20’. (423-DN)
Basis of Cost is not required on compound claims.
- Crossover Claims: Even though 340B drugs identified on Medicare crossover
claims are not eligible for a dispensing fee, providers must
identify 340B purchased drugs by entering Modifier “UD” in conjunction with the
appropriate HCPCS. For Institutional claims, Modifier “UD” must be the first
modifier listed after the HCPCS code.
Department’s 340B Drug
Pricing Frequently Asked Questions is posted to the
Pharmacy webpage. Questions regarding this notice may be directed to the Bureau
of Professional and Ancillary Services at 877-782-5565.