CMS should require the use of claim-level methods to identify 340B drugs.

Manufacturer rebates for drugs paid through Medicaid managed care organizations (MCOs) are an increasingly important source of savings for States and the Federal Government. However, "duplicate discounts," which occur when manufacturers pay Medicaid rebates on drugs sold at the already-discounted 340B price, are prohibited by law. To identify 340B drug claims and avoid duplicate discounts for MCO drugs, we found that most States use methods that identify providers using 340B-purchased drugs. However, these provider-level methods may not accurately identify all individual 340B drug claims. By contrast, methods that operate at the claim level can improve accuracy in identifying 340B drug claims, and thereby, help States correctly collect rebates. For these reasons, we recommend that CMS require States to use claim-level methods to identify 340B claims. State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (OEI-05-14-00430)