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“340B and the OIG Work Plan”

To Be or Not To 340B By Jaya F. White

OIG’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.

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