Last week, Centers for Medicare & Medicaid Services (“CMS”) finalized a rule making changes to the Medicaid drug rebate program (“MDRP”). The MDRP is a program that includes CMS, state Medicaid agencies, and participating drug manufacturers that helps to offset the Federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients. As a participant in the program, manufacturers are required to enter into a pricing agreement from Section 340B Drug Pricing Programs with Health Resources and Serve Administration (“HRSA”).
The finalized rule applies to Medicaid and CHIP managed care programs subject to the requirements in 42 CFR part 438 in Title XIX (Medicaid), excluding CHIP programs operating pursuant to 42 CFR 457 in Title XXI (State Children’s Health Insurance Program). However, states may also choose at their option to consider a similar standard for State-funded programs.
The regulation requires Medicaid managed care organizations (“MCOs”) to assign unique, Medicaid-specific beneficiary identification numbers (“BIN”), processor control numbers (“PCN”), and group number identifies to their Medicaid line of business and to include these identifiers on beneficiary identification cards for pharmacy benefits. This identification code will be a unique combination of Medicaid-specific BIN and PCN numbers along with a group number identifier. The use of these combined identifiers is intended to help prevent duplicate discounts as States will be better able to identify plans covered by Medicaid using these identifiers in the rebate invoices.
These identifiers together as a unique modifier will signal to the State to not pay an additional rebate to the covered entities, thereby, helping to carve-out Medicaid MCO claims. The applicability date for this provision to be the first rating period for contracts with managed care plans beginning on or after November 19, 2025 (i.e., one year following the effective date of the Final Rule, which is November 19, 2024). However, Advis expects the MCOs will begin updating their numbers throughout the year. 340B providers should be on the look out for updates in order to update plan blocks in their TPAs in order to avoid Medicaid duplicate discounts.
For more information how this impacts your covered entity and how to best prepare, please contact Advis.
