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340B and the OIG Work Plan

By Jaya White on December 12, 2014
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Online BankingOIG’s recently issued FY 2015 Work Plan has made duplicate discounts a new focus for FY 2015.  OIG “will assess the risk of duplicate discounts for 340B-purchased drugs paid through Medicaid managed care organizations (MCOs) and describe States’ efforts to prevent them.”  Under the Affordable Care Act, states were required to collect rebates for drugs paid through Medicaid MCOs, and prohibit duplicate discounts under the 340B Program for the drugs.  OIG’s concern, however, is that the current processes to prevent duplicate discounts for fee-for-service Medicaid may not be enough for drugs paid through MCOs.

The FY 2015 Work Plan also renewed an area of focus from the prior year’s Work Plan:  exploring the opportunity to reduce Medicare Part B spending if Medicare were able to share in 340B cost savings.  OIG plans to calculate the amount by which average sales price-based payments exceed 340B prices, and estimate potential savings.   Medicare Part B reimburses for almost all covered outpatient drugs, including those drugs purchased by 340B entities on the basis of average sales price.  If Medicare Part B could share in the 340B cost savings, providers could have additional cost savings between the average sales price based payment and the discounted 340B purchase price.

We will continue to monitor and update this blog with any activity by OIG involving the 340B program.

Photo of Jaya White Jaya White

Jaya White is a partner in the firm’s Health Law Practice Group. She represents a wide range of health care clients in regulatory and transactional matters, primarily in the pharmacy and long-term care industries. A portion of her practice includes assisting pharmacy and…

Jaya White is a partner in the firm’s Health Law Practice Group. She represents a wide range of health care clients in regulatory and transactional matters, primarily in the pharmacy and long-term care industries. A portion of her practice includes assisting pharmacy and hospital clients with issues involving the 340B Discount Drug Program and contract pharmacy issues.

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  • Posted in:
    Health Care and Life Sciences
  • Blog:
    To Be or Not to 340B Blog
  • Organization:
    Quarles & Brady LLP
  • Article: View Original Source

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