CiiTA Case Study: Sometimes it’s the State

A 340B transaction involves more than a manufacturer selling pharmaceuticals and a covered entity buying them. Because the transaction involves many parties, even when both the manufacturer and covered entity are processing transactions correctly on their respective ends, compliance can still hit a snag.

This happened recently with a client of ours. Our client hired us to perform a Good Faith Inquiry on a Covered Entity that we identified as likely to have a high risk for potential duplicate discounts. Because the manufacturer had limited visibility into the Covered Entity’s data, we asked for the Entity’s assistance in checking the 340B claims from a particular time frame against the relevant state’s Medicaid Exclusion file.

What we found was a surprise. The Covered Entity in question had hired a contractor to electronically identify all their 340B transactions with a particular code. The third party contractor had correctly identified these 340B transactions with the code, and confirmed with the state that it would exclude all coded claims from its Medicaid rebate processing. But the state hadn’t done that; the state had instead submitted the claims for Medicaid rebate, resulting in duplicate discounts for our client, the manufacturer.

The moral of the story is twofold. First, duplicate discounts happen even when both covered entities and manufacturers have done their part to prevent them. Second, the complicated nature of 340B transactions mean that manufacturers, covered entities, and other involved parties need to work more collaboratively, not less. No one has complete visibility into the data. Third party consultants, like CiiTA, can assist all parties in resolving issues of duplicate discount in good faith, and prevent mistakes from happening in the future.