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Elizabeth M. Whitehorn, Director

Provider Notice Issued 04/15/2021

Date:     April 15, 2021

 

To:       All Medical Assistance Program Providers

 

Re:      Billing Reminders for ProvidersParticipating in the 340B Program

 

 

Thisnotice is a reminder to providers of the information required when submitting claimsto the Department of Healthcare and Family Services (HFS) or one of the MedicaidManaged Care Organizations (MCOs) for drugs purchased under the federal 340Bdrug pricing program.

 

Section 340B of the Public Health Service Act limits the cost of covered outpatient drugs to specifiedproviders. These providers purchase pharmaceuticals at significantly discountedprices. These providers are referred to as 340B providers.

 

Per 89 Ill.Admin. Code Section 140.12, HFS requires a provider that is eligible toparticipate in the 340B program to enroll in that program. No entity mayexclude Medicaid from their participation in the 340B program. A providerenrolled in the 340B federal Drug Pricing Program must charge the Department nomore than its actual acquisition cost (AAC) for the drug product, plus theDepartment’s established dispensing fee.

 

After arecent review of 340B billing practices, HFS has discovered a significantnumber of providers are charging more than the AAC for the 340B-purchaseddrugs, resulting in overpayment to those providers. Providers who reviewtheir billing practices and find they have inadvertently billed more than theAAC for 340B drugs should submit adjustments to void and rebill for the correctpayment amount. Providers who do not adjust their claims may be referred to theOffice of the Inspector General for possible audit.    

 

HFS hasnotified providers via previous releases of the fields required for accurateadjudication of claims containing 340B-purchased drugs. Those elements areoutlined below:

 

  •  Actual Acquisition Cost (AAC): Providerscannot charge HFS more than the actual acquisition cost for the drugproduct.
  •  Dispensing Fee: The appropriate HFS established 340Bdispensing fee is to be added to the AAC when submitting a non-pharmacy claim. TheAAC (409-D9) and dispensing fee (412-DC) are submitted in separate fields whensubmitting a pharmacy claim. The 340B dispensing fee for all providers remainsat $12.00. Certain Birth Control Methods will receive a $35.00 dispensingfee.

  • Healthcare Common Procedure Coding System(HCPCS):  TheHCPCS 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-pharmacyclaims that is applicable to the HCPCS code provided. 

  •  Provider Charge:  The provider charge can be no more than theAAC for the product, plus the Department established dispensing fee.
  • ​ Submission Clarification Code: PharmacyProviders submitting claims through the point-of-sale system mustidentify 340B purchased drugs by populating the Submission Clarification Codefor 340B Non-compoundclaims with (423-DN) Basis Of Cost Determination = ‘08’ and (420-DK) SubmissionClarification Code = ‘20’. 340B Compound claims must be submitted with atleast one ingredient having (490-UE) Compound Ingredient Basis of CostDetermination = ‘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 crossoverclaims are not eligible for a dispensing fee, providers mustidentify 340B purchased drugs by entering Modifier “UD” in conjunction with theappropriate HCPCS. For Institutional claims, Modifier “UD” must be the firstmodifier listed after the HCPCS code.

TheDepartment’s 340B DrugPricing Frequently Asked Questions is posted to thePharmacy webpage. Questions regarding this notice may be directed to the Bureauof Professional and Ancillary Services at 877-782-5565.

 

 

 

Kelly Cunningham,Administrator

Division ofMedical Programs