Duplicate Discounts Under 340B Program
There are not that many core requirements within the 340B Statute. For being on its face, what appears a fairly "simple" program, it is instead turning into a mighty complicated program. One of two main requirements is "no duplicate discounts."


A Possible Solution for Preventing Duplicate Discounts under 340B Program

There are not that many core requirements within the 340B Statute1. For being on its face, what appears a fairly "simple" program, it is instead turning into a mighty complicated program. One of two main requirements is "no duplicate discounts."

A "duplicate discount" is when a prescription (or administration) of a 340B priced outpatient drug is also subject to a pharmaceutical manufacturer's rebate under a Medicaid program. Purchasing a drug at a discount under 340B and the claim also being subject to a rebate under a state Medicaid program would subject the manufacturer to "two" (duplicate) discounts. Filling a prescription and billing a managed Medicaid plan is allowed so long as the state is aware, so they withhold that prescription from their rebate submission to the manufacturer. The opinion of manufacturers these days is that there are "rampant" duplicate discounts being paid out2.

Most 340B claims going through a contracted pharmacy are identified as "340B eligible" in a retrospective manner. This usually prevents addressing, at the time of dispensing, any designation as a "340B claim." Because of this, most 340B Covered Entities choose to block the "capture" of these claims and not replenish with 340B priced drugs. The main way to do this is by using the billing information on the claim, known as the "BIN Block" method. A BIN Block consists of a BIN (bank identification number), and a PCN (processor control number) and/or GRP (group designation). These values are attached and are transmitted on each claim record. Most BIN Block systems require a correct and accurate ("exact") match between the data in the BIN block system and the claims records to prevent the capture.

For how important the duplicate discount issue is within the 340B program, one would think more would be done to establish an efficient and accurate methodology?

The following are potential changes that could address the currently known challenges:

Access to the BIN Information

Currently, there is no central database known to the 340B Covered Entities or their administrators that contain all the Medicaid Plans' BIN combinations (as they currently exist or are modified over time.) CMS now requires Medicare Part D Plans to have "unique" BINS – why can't there be a mandate that all Medicaid Plans (FFS and MMCO) have – AND publish (e.g. make available on their websites on the landing page) – up-to-date BIN information? And require that the BIN’s be unique and dedicated solely to Medicaid plans? This would allow BIN Block systems to maintain the most up-to-date combinations which would efficiently and accurately block the capture and replenishment of unwanted Medicaid claims.

Pharmacist PBM

Contract Pharmacies

Contract Pharmacies do not always input the correct information in the available "BIN" "PCN" and "GRP" fields in conformance with the NCPDP standards for electronic claims transactions (transmissions.) Medicaid Plans should make it a contractual requirement that they will not get paid if they do not comply with this requirement – the right data in the right place each time. And if an error is identified that corrections must be made immediately, thus preventing any refills from being captured going forward.

Pharmacy Benefit Managers (PBMs)

Pharmacy Benefit Managers do not always reject a claim if it comes in with "incorrect" BIN information. No one wants a patient waiting at the pharmacy window for their prescriptions – but the Medicaid patient should also be required to present their card (which should have printed on it the complete BIN information) each time they have a prescription filled. Instead, if "enough" info is transmitted that leaves little to no doubt as to the identity of the patient, the claim is approved and paid by the PBM. The problem is further exacerbated when the incorrect info is transmitted and that is what the 340B Covered Entity (or its administrator) needs/uses to block the capture of Medicaid claims. This can be a classic case of, "garbage in, garbage out." Make it a contractual performance guarantee/accuracy requirement between the PBM and the Medicaid Plan, requiring the PBM to reject claims from pharmacies that do not come across with the correct information in the correct fields and thereby forcing the pharmacy to resubmit to get paid. It shouldn't take long to drive home the importance of complete and accurate information.

Today, there is no "one" solution that all vested parties have agreed to and/or can operationalize, despite a collective strong desire to prevent duplicate discounts. It is important for 340B Covered Entities to partner with a 340B Third-Party Administrator to assist with the blocking of capturing unwanted Medicaid claims. In addition, it is very important for 340B Covered Entities to leverage their relationships with their respective Medicaid agencies to ensure there is a flow of communication to regularly obtain the most up-to-date BIN information and then share that information with their 340B Administrators.

Hopefully with these changes, behaviors can be changed, duplicate discounts will be prevented and the 340B program can fulfill its intended purpose for the 340B safety net providers and support the prohibition against duplicate discounts. Who knew it could come down to 3 simple letters: B-I-N? If everyone does what is needed, then we can all get back and focus on providing healthcare to those that need it.


The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

1Sec. 340B of the Public Health Service Act (Pub. L. 102-585), as amended by the Patient Protection and Affordable Care Act (Pub. L. 111-148), Health Care and Education Reconciliation Act (Pub. L. 111-152) and Medicare and Medicaid Extenders Act of 2010 (Pub.L. 111-309)

2Maneuvers on the 340B Drug Pricing Program Battlefield: Duplicate Discounts and Contract Pharmacies ( ) November 12, 2021