CurrentUCarePolicy N/A

-UD Drug or Biological Drug Acquired with 340B Discount Modifier

Defines UCare's payment and appropriate use rules for the -UD HCPCS modifier when applied to drugs or biologicals acquired under the 340B Drug Pricing Program for specified Minnesota products.

Policy Summary

PayerUCare

Policy-UD Drug or Biological Drug Acquired with 340B Discount Modifier

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateMar 31, 2025

Key ActionTo receive the 340B discount, submit claims with bill type 13x, append the -UD modifier to eligible HCPCS, ensure the HCPCS is identified with Status Indicator 'K' on CMS Addendum B, and have payment based on MHCP hospital outpatient methodology.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

28.6%discount applied to 340B-administered drugs for MHCP members

PMAP, Connect, MSC+, MinnesotaCareUCare products this information applies to

13xrequired bill type for 340B discount to apply

Status Indicator KHCPCS must be identified as 340B-eligible by CMS Addendum B

Conditions for 340B Discount

Conditions for 340B discount application

The 340B discount will be applied when all of the following conditions are met:

ALL of the following

Bill Type of 13x is used on the claim.
The -UD modifier is appended to the HCPCS code on the claim.
Modifier -UD indicates the drug or biological was acquired under the 340B discount.
The submitted HCPCS is identified as eligible for 340B purchase by having Status Indicator 'K' on CMS Addendum B (Final OPPS Payment by HCPCS Code file).
Provider payment is based on the MHCP hospital outpatient methodology.

Policy Summary

PayerUCare

Policy-UD Drug or Biological Drug Acquired with 340B Discount Modifier

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateMar 31, 2025

SourceLink

On This Page

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Claim Submission and Billing Requirements

Billing Rule

Claim submission and modifier use requirements — billing rules to receive 340B discount

UCare applies a 28.6% discount for drugs administered to UCare Minnesota Health Care Program (MHCP) members by 340B covered entities. To receive the 340B discount, submit claims using the billing requirements below.

Bill Type must be 13x.
Append the -UD modifier to the HCPCS code.
The submitted HCPCS must be identified as eligible for 340B purchase by a Status Indicator of "K" (separately payable OPPS drugs) on the CMS Addendum B (Final OPPS Payment by HCPCS Code file).
Provider payment must be based on the MHCP hospital outpatient methodology.

Denial Risk

Denial risk for inappropriate modifier use

Do not append the -UD modifier unless all eligibility and billing criteria are met. Using -UD inappropriately may cause the claim to be denied or the 340B discount to be removed.

Denial or adjustment risk if -UD is used when the provider is not an eligible 340B covered entity as listed in the HRSA OPA database.
Denial or adjustment risk if the HCPCS on the claim is not identified with Status Indicator 'K' on CMS Addendum B.
Denial risk if bill type is not 13x or if provider payment is not based on MHCP hospital outpatient methodology.
Pharmacies must be properly contracted with the 340B entity to support use of -UD for dispensed entity-owned 340B drugs; otherwise claims may be denied.

Key Definitions

inv-07: Eligible 340B covered entity

DefinitionOrganizations listed on the HRSA Office of Pharmacy Affairs Database that are eligible to participate in the 340B Program.

Program contextThese covered entities receive outpatient drugs at significantly reduced prices under the 340B Drug Pricing Program.

Compliance noteCovered entities must have procedures to prevent duplicate discounts (no concurrent Medicaid rebates).

inv-08: Contracted pharmacy

DefinitionA pharmacy contracted with a 340B covered entity to provide pharmacy services, including dispensing entity-owned 340B drugs to the covered entity's patients.

RelationshipContracted pharmacies provide services on behalf of the covered entity and may dispense 340B-acquired drugs to that entity's patients.

Use of -UD-UD may be used when the provider is a HRSA-listed covered entity or a contracted pharmacy providing entity-owned 340B drugs.

OpenPayer

-UD Drug or Biological Drug Acquired with 340B Discount Modifier

Conditions for 340B Discount

Modifier, HCPCS Indicators, and Discount Rate

Claim Submission and Billing Requirements

Key Definitions