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Provider Notice Issued 04/15/2021

Date:     April 15, 2021

 

To:       All Medical Assistance Program Providers

 

Re:      Billing Reminders for Providers Participating in the 340B Program

 

 

This 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.

 

After a 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.    

 

HFS has notified providers via previous releases of the fields required for accurate adjudication of claims containing 340B-purchased drugs. Those elements are outlined below:

 

  •  Actual Acquisition Cost (AAC): Providers cannot charge HFS more than the actual acquisition cost for the drug product.
  •  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 fee.

  • Healthcare Common Procedure Coding System (HCPCS):  The HCPCS code must be provided along with the appropriate National Drug Code (NDC) for non-pharmacy claims. 
  • Modifier – 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.

The 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.

 

 

 

Kelly Cunningham, Administrator

Division of Medical Programs


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