340B Compliance Program

​​​​​Partnership HealthPlan of California (PHC) has developed a 340B Compliance Program with the direction from the PHC 340B Advisory Committee.

What is 340B?

340B is the Section of the Public Health Services Act that allows certain eligible health care entities (Covered Entities) to get discounted drugs. The 340B Program was intended to "enable [participating] entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." This includes Federally Qualified Health Centers, Rural Health Centers affiliated with Critical Access Hospitals, Family Planning Clinics, Indian Health Centers, and several classes of hospitals.

What does 340B require?

At its core, federal law around 340B requires that 340B medications not be subject to duplicate discounts. That means if a drug is purchased at the 340B price, a State Medicaid Agency cannot claim a rebate on that same medication (42 USC 256b(a)(5)(A)(i)). In states where Managed Care Plans are used, the Managed Care Plan is an agent of the State, meaning the Managed Care Plan is responsible for ensuring compliance with this requirement under Section 340B of the Public Health Services Act.

To ensure compliance, HRSA requires 340B Covered Entities and Managed Care Plans like PHC to enter into agreements that prevent duplicate discounts. This agreement specifies how the 340B Covered Entity and the Plan will properly identify 340B drugs so that the State does not receive discounts on those medications from the manufacturers.

How will PHC help?

PHC has developed a 340B Compliance Program to help bring the Plan and its 340B Covered Entity partners who have billed and will bill PHC for 340B drugs into compliance with the requirements of the 340B Program, including compliant claiming of all prospective 340B drug billing to PHC.