340B covered entities fault Express Scripts for not communicating with them more effectively about changes in its 340B claims identification and reporting requirements, which the entities consider to be major.

Express Scripts’ New 340B Rules Will Have Big Impact on Contract Pharmacy and Drug Reimbursement, Providers and Consultants Say

340B covered entities say they are deeply concerned about pharmacy benefit manager Express Scripts’ (ESI) requirements, effective Monday, governing what pharmacies in the PBM’s network must do when they identify that a previously submitted claim is 340B-eligible. Last night, ESI told 340B Report that the change is minor and that adequate notice has been provided to covered entities and their pharmacies. A number of covered entities disagree, however.

Entities say they are unsure that community pharmacies they contract with to dispense 340B-purchased drugs know about ESI’s new requirements and the March 1 deadline, and are able or willing to comply. If 340B contract pharmacies can’t or won’t comply, entities worry that they will be unable to access 340B pricing on drugs under contract pharmacy replenishment inventory systems, and could end up being billed at wholesale acquisition cost.

In these inventory systems, 340B contract pharmacies fill prescriptions using their own non-340B purchased stock. When a given quantity of a drug has been dispensed on a 340B entity’s behalf, the entity buys that quantity through 340B and has it delivered to its contract pharmacy.

Covered entities say they understand that, under ESI’s new requirement, when a previously submitted claim is determined to be 340B-eligible, it will be up to the contract pharmacy to resubmit the claim to ESI electronically using National Council for Prescription Drug Programs (NCPDP) standards. Specifically, entities say they understand that the contract pharmacy is supposed to submit an Information Reporting (N1) transaction, and include values in fields identifying the transaction as 340B-eligible.

ESI’s latest network provider manual gives pharmacies 10 business days to submit the information required to re-identify a claim as 340B-eligible.

Covered entities and their 340B inventory management consultants point out that NCPDP has said in the past that, while a requirement such as this may be useful to parties involved in the claim, “unless all trading partners in the sequence are able to support this incremental process to pass the information to the ultimate destination, the 340B-N1 is not an effective solution for the business need.”

Consultants also say that covered entities’ 340B third party administrators, on the whole, are not equipped to resubmit a claim on a contract pharmacy’s behalf; that contract pharmacies generally do not get information about when a claim is retroactively deemed qualified for 340B; and that it could take contract pharmacies weeks or months—not 10 business days—to obtain the information necessary to resubmit a claim as being 340B-eligible.

“Operationally, I am not sure how most pharmacies will be able to implement the change,” a consultant said.

“Any process to rebill prescriptions would be very challenging, but the 10-day limit makes it virtually impossible,” a health system 340B program manager said.

Express Scripts Statement and Reaction from Covered Entities

Covered entities and consultants also faulted ESI for not communicating with them more effectively about the changes, which they consider to be major.

In a statement to 340B Report last night, ESI said: “A requirement to provide 340B reporting has been in place since last July. In January, we gave pharmacies notice of an additional method for 340B reporting starting March 1st, and sent a targeted reminder of that January communication this week. It requires a minor modification on a standard form provided to pharmacies. This change was made in the spirit of transparency and is not intended to change reimbursement, network participation, or a pharmacy’s ability to serve as a Contract Pharmacy for 340B covered entities.”

A 340B inventory consultant in daily communication with covered entity pharmacy directors said that, while it might be accurate that ESI’s initial 340B reporting requirement has been in place since July, “I never saw it. I have received ESI bulletins since early last year and would have noticed something dealing with 340B.” Nor did any pharmacy directors he works with alert him to a change, he said.

The consultant said neither he nor his clients received a January notice from ESI specifically about 340B claims reporting changes. He said he did get a Jan. 15 email notice from ESI about the latest edition of its Pharmacy Matters newsletter. The email does not mention the 340B program. The newsletter that was the subject of the email also does not mention the 340B program. A link in the newsletter, however, opens a summary of changes to ESI’s network provider manual. The summary refers to a new sentence in the manual “to reflect steps to take when a claim is determined to be a 340B claim.”

“It takes three clicks to find the 340B information, and it is a small mention of changes to the manual,” the consultant said. “I guess it was my bad that I did not dig deeper into this email, but nothing would really prompt me to do so.”

This consultant and the health system 340B program manager quoted above both challenged ESI’s depiction of the new 340B reporting requirement as being minor, and that it is not intended to change reimbursement.

“How would identifying a claim as 340B in the spirit of ‘transparency’ make any difference other than to change reimbursement or shut down contract pharmacy arrangements?” the consultant said.

“They cannot possibly believe that this will not impact contract pharmacy activity,” the 340B program manager said. “It is hard to believe that this will not result in changes to reimbursement.”

The program manager also pointed out that ESI’s new claims identification and resubmission requirements also apply to entities’ in-house pharmacies. While entities likely would have an easier time than contract pharmacies identifying and resubmitting claims as being 340B-eligible, the program manager said their institution does not have access to the NCPDP N1 information reporting transaction sheet that ESI is requiring for claims resubmission.

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