ACE ACE Financial Management & Duplicate Discount Prevention 2 — Questions and Answers
Question 1: What is a duplicate discount in the 340B Drug Pricing Program?
- Purchasing the same drug twice from two different wholesalers
- Receiving both a 340B discounted price and a Medicaid rebate on the same drug unit (Correct answer)
- Dispensing a drug to the same patient on two consecutive days
- Ordering 340B drugs for two different covered entity locations
Correct answer: Receiving both a 340B discounted price and a Medicaid rebate on the same drug unit
A duplicate discount occurs when a drug unit benefits from both the 340B discounted purchase price and a Medicaid manufacturer rebate, which is prohibited by the 340B statute.
Question 2: Which of the following drug categories is exempt from the duplicate discount prohibition?
- All orphan drugs regardless of indication
- Drugs dispensed to Medicaid managed care patients when the state has not carved them into fee-for-service (Correct answer)
- Over-the-counter (OTC) medications
- Vaccines administered in outpatient settings
Correct answer: Drugs dispensed to Medicaid managed care patients when the state has not carved them into fee-for-service
The duplicate discount prohibition generally applies to Medicaid fee-for-service claims; drugs dispensed under Medicaid managed care may not trigger the prohibition depending on state carve-out elections.
Question 3: What is a Medicaid 'carve-out' in the context of 340B duplicate discount prevention?
- Excluding 340B drugs from the state Medicaid formulary entirely
- The state electing not to submit 340B drugs for Medicaid rebates, preventing duplicate discounts (Correct answer)
- A carve-out of high-cost specialty drugs from covered entity purchasing
- Removing certain covered entities from Medicaid billing eligibility
Correct answer: The state electing not to submit 340B drugs for Medicaid rebates, preventing duplicate discounts
A Medicaid carve-out means the state excludes 340B-purchased drugs from Medicaid rebate requests, thereby preventing a duplicate discount on those units.
Question 4: What is a covered entity's obligation to prevent duplicate discounts for Medicaid fee-for-service claims?
- Submit all claims to HRSA for manual review before billing Medicaid
- Identify and exclude 340B-purchased drugs from Medicaid rebate-eligible claims or notify the state (Correct answer)
- Avoid dispensing any drugs to Medicaid patients entirely
- Charge Medicaid patients the full retail price regardless of 340B savings
Correct answer: Identify and exclude 340B-purchased drugs from Medicaid rebate-eligible claims or notify the state
Covered entities must implement systems to identify 340B claims and either exclude them from Medicaid rebate submissions or properly notify the state to prevent duplicate discounts.
Question 5: Which system is most commonly used to prevent duplicate discounts in 340B contract pharmacy arrangements?
- Manual paper-based reconciliation reviewed quarterly
- Split-billing software that identifies and separates 340B-eligible from non-340B claims (Correct answer)
- The state Medicaid formulary exclusion list
- An insurance claims clearinghouse fee schedule
Correct answer: Split-billing software that identifies and separates 340B-eligible from non-340B claims
Split-billing software automatically separates 340B-eligible claims from non-340B claims, helping covered entities prevent duplicate discounts by tracking which drugs were purchased at 340B prices.
Question 6: What is the potential consequence for a covered entity that allows duplicate discounts to occur?
- A 5% reduction in the entity's 340B ceiling price discount for one year
- Termination from the 340B program and repayment of improperly obtained discounts (Correct answer)
- Automatic referral to the DEA for controlled substance review
- Loss of Medicare Part A certification only
Correct answer: Termination from the 340B program and repayment of improperly obtained discounts
Allowing duplicate discounts is a serious violation that can result in termination from the 340B program and a requirement to repay the value of the improper discounts received.
ACE ACE Financial Management & Duplicate Discount Prevention 2
What is a duplicate discount in the 340B Drug Pricing Program?