4.1 Fee-For-Service Medicaid, CSHCN, HTW, and KHC

Effective June 1, 2016, the reimbursement methodology for calculating the ingredient cost of pharmacy claims paid to eligible health care organizations is based on the Wholesale Acquisition Cost (WAC):

  • Human Immunodeficiency Virus (HIV) products: WAC minus 40 percent
  • Hemophilia products: WAC minus 32 percent
  • Brands and generics: WAC minus 57 percent

New drugs are added to the formulary at WAC minus 23.1 percent for 6 months. 

This methodology is not all inclusive and some products may be priced manually. 

4.2 Medicaid Managed Care 

Medicaid managed care organizations (MCO) implemented their own 340B reimbursement methodologies on December 1, 2014.  Pharmacy staff should contact the MCO in question for specific processes.  Refer to the "Managed Care" section of the Contact Information chapter of the PPPM for contacting the specific MCO.

Medicaid managed care organizations have been notified of the eligible entity's requirement to submit a value of “2Ø” in the “Submission Clarification Code” field (42Ø-DK) for pharmacy claims to denote claims filled with stock purchased through the 340B program.

  • A 340B covered entity seeking to use 340B stock in Medicaid managed care must contract with the MCO as a 340B pharmacy and accept the payment terms of their "shared-savings" model:
  • If the 340B covered entity does not accept the terms of an MCO's shared savings model for the reimbursement of 340B-purchased drugs, then the covered entity may choose to contract with the MCO as a retail pharmacy.
  • If the covered entity contracts with an MCO as a retail pharmacy, the entity cannot use 340B purchased drugs.
  • If a pharmacy is not contracted as a 340B pharmacy in their network, MCOs may deny claims submitted with a value of “2Ø” in the “Submission Clarification Code” field (42Ø-DK) as the pharmacy should not have utilized 340B stock.

An MCO cannot require one of its network pharmacy providers to submit its actual acquisition cost (AAC) on outpatient drugs and biological products purchased through the 340B program, consistent with UMCM Chapter 2.2, “Pharmacy Claims Manual.”