Manufacturer Validations can Prevent Duplicate Discount Violations

Some 340B covered entities may be surprised to learn that drug manufacturers have long acted as control to help prevent 340B duplicate discounts.

Some manufacturers perform rebate validations using Medicaid claims level data they obtain from the states. If, after analyzing the Medicaid claims level data, the manufacturer discovers a transaction they suspect may be a 340B duplicate discount, the manufacturer can dispute the rebate with the state.

By avoiding paying a Medicaid rebate on a unit that had been acquired under the 340B program, the manufacturer can prevent the duplicate discount from occurring. No Medicaid rebate paid = no duplicate discount = no duplicate discount violation.

Manufacturer 340B Disputes are Time-Consuming for States to Resolve

Unfortunately, resolving manufacturer 340B duplicate discount disputes can take significant time and resources from the state.

While attending a conference last year, I participated in a breakfast with state Medicaid rebate leaders. These were the individuals who worked with manufacturers to clear rebate disputes in order for the state to get paid. When asked what dispute type took the most amount of their staff's time to resolve, the overwhelming response was disputes related to 340B duplicate discounts.

It makes sense. Just as states have had a hard time excluding 340B duplicate discounts from managed Medicaid since HRSA's Release No. 2014-1 clarified that the Medicaid Exclusion file only applies to Medicaid fee-for-service claims, manufacturers have had a hard time as well. Some manufacturers have implemented some very well-thought-out processes to flag suspected duplicate discounts in managed Medicaid, while others have taken a more "liberal" approach and dispute all claims originating from a covered entity.

The problem from the states' perspective is, when a manufacturer disputes a rebate claim, the rebate analysts are expected to contact the 340B covered entity who originated the claim to ask the covered entity if a 340B drug was dispensed or not. The person the state may reach at the covered entity "may be an administrative or billing staff member who does not know specifics as to what drugs were used or why they were used." So getting an answer can take a long time, meaning the dispute may stay open for long time (which doesn't benefit the state or the manufacturer).

How Review Helps

We want to help manufacturers avoid duplicate discounts, while also helping relieve the burden of 340B duplicate rebate disputes on states. We do this by:

  1. Obtaining claims-level data about Medicaid utilization from our manufacturer clients, who received the data from states
  2. Applying our proprietary algorithms to identify claims that we suspect were filled with a drug purchased at the 340B price, using information provided on the claims line such as:
  • Pharmacy number
  • Pharmacy type
  • Date of service
  • Medicaid state
  • Prescriber
  • NDC of drug dispensed

Working with covered entities to confirm if claims were actually filled with a 340B drug / used in a 340B accumulator via our Review tool

Combining covered entity responses in reports and providing those reports to drug manufacturers, who share the reports with state Medicaid agencies in order to avoid paying duplicate discounts.

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