Spring Cleaning of Your 340B Program


As we welcome the fresh energy of spring, now is the perfect time for 340B covered entities to conduct a thorough review and update of their 340B program. Ensuring your program’s compliance and efficiency is akin to spring cleaning—tidying up, organizing, and preparing for the year ahead. Below, we outline essential steps and checks to maintain the excellence of your 340B program as we transition to this new season.

1. Review Your State’s Medicaid Website for New BIN/PCN/Group Updates

It’s essential to regularly check the Medicaid website for your carve-in states, looking for any updates related to Billing Identifier Number (BIN), Processor Control Number (PCN), and group numbers. These details are crucial for accurately processing pharmacy claims and securing appropriate 340B discounts. Often, at the beginning of the year, Medicaid agencies will update their websites with the latest BIN/PCN/Group numbers based on recent contracting information with Medicaid Managed Care organizations.

2. Fiscal Year-End Specific Checks

For Entities with Fiscal Year Ending on 9/30:

  • Location and Eligibility Verification: With your Medicare Cost Report filing deadline now passed, obtain a copy of your Cost Report and Trial Balance. Ensure all service locations are correctly listed and update your crosswalk accordingly. Verify the eligibility of your child sites and adjust your data feeds to reflect any changes.

For Entities with Fiscal Year Ending on 12/31:

  • Finance Team Coordination: With the Medicare Cost Report filing deadline fast approaching, now is the time to collaborate with your finance team to prepare for any potential new sites of service that may become 340B eligible. It’s also a good idea to ensure no existing sites will “lose” eligibility with the upcoming filing.

3. Medicare Modifier Updates

The Medicare Part B Inflation Rebate Guidance has been updated for entities participating in the 340B Drug Discount Program. The new guidance covers the use of the 340B modifiers for Medicare providers and suppliers who bill for separately payable Part B drugs and biologicals participating in the 340B program. Effective January 1, 2024, all 340B covered entities, including those providers that are hospital-based and non-hospital-based, must use either the “JG” or “TB” modifier on claims for drugs acquired through the 340B program. Starting January 1, 2025, the “TB” modifier becomes mandatory, regardless of whether the “JG” modifier was previously used.

In 2024, entities have the option to continue using their current modifier as per previous guidance, or transition early to the “TB” modifier. This adjustment aims to facilitate the implementation of the Part B inflation rebate program established by the Inflation Reduction Act of 2022, which excludes units of 340B acquired drugs from Part B inflation rebates. The updated guidance, released in December 2023, is part of efforts to ensure providers and suppliers are informed and compliant with the new 340B modifier requirements, supporting the effective administration of the 340B program and related Part B drug inflation rebates.

For entities not previously subject to the Medicare modifier, such as Critical Access Hospitals (CAHs) not under the Outpatient Prospective Payment System (OPPS) and certain grantees, it’s important to note that these modifiers must be added starting January 1. This is a significant change that requires immediate attention to maintain compliance.

4. Maintenance Items for Review

  • Check Your Accumulators: If not done regularly, review your accumulators for any unusually high or low accumulations. This can help you detect discrepancies or areas of concern early on.
  • Review OPAIS Information: Ensure that your Office of Pharmacy Affairs Information System (OPAIS) accurately reflects the Authorizing Official (AO) and Primary Contact (PC) information. Maintaining accurate records is crucial for program integrity and effective communication.
  • Refresh Provider Feeds: For providers, including residents, it’s essential to refresh your data feeds to ensure that all provider information is up to date. This is critical for accurate billing and compliance.
  • Stay Updated with HRSA Requirements: Review the latest Data Request Letter (DRL) from the Health Resources and Services Administration (HRSA) to stay informed about any new requirements. Keeping current with HRSA guidelines is fundamental to 340B compliance.

5. Additional Recommendations

  • Register for Upcoming 340B Conferences: These conferences are invaluable for networking, staying informed about the latest 340B developments, and learning best practices.
  • Subscribe to 340B Report340B Report will keep you apprised of all the key developments in the 340B program both at the federal and state level.  As a 340B Report sponsor, The Alinea Group can provide you with a special discount to subscribe or you can contact Reshma Eggleston to request the Alinea coupon code.
  • Review and Secure PSA Documentation: Ensure you have fully executed copies of all your Pharmacy Service Agreements (PSAs). This documentation is critical for audits and compliance checks.

Spring is a season of renewal and growth. By dedicating time to thoroughly review and update your 340B program, you’re not just ensuring compliance but also enhancing the program’s effectiveness. These steps are vital for preserving the integrity of your 340B program and ensuring it continues to support your mission effectively.

Magdalena Ordon, Director at The Alinea Group, can be reached at magdalena.ordon@alinea-group.com.

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