May 13, 2015
Jim McCrae
Acting Administrator
Health Resources and Services Administration
U.S. Department of Health & Human Services
5600 Fishers Lane
Rockville, MD 20857
Victoria Wachino
Director
Center for Medicaid and CHIP Services
U.S. Department of Health & Human Services
7500 Security Boulevard
Baltimore, MD 21244
Dear Acting Administrator McCrae and Director Wachino:
On behalf of the nation’s Medicaid Directors, I am pleased to provide you with a copy of the National
Association of Medicaid Directors’ latest Issue Brief, “Medicaid and the 340B Drug Discount Program:
Alignment and Modernization Opportunities”.
We share your agencies’ common goal of ensuring that indigent and vulnerable populations have
sufficient access to appropriate, high quality services and treatments that promote individuals’ health
and well-being. Pharmaceutical products can be an important component of the continuum of services
for achieving this goal. Further, such products, like all services purchased by Medicaid and other public
programs, must be both cost-effective and administered with the highest regard to protecting program
integrity.
The Medicaid and 340B Drug Discount Program both play a role in the provision of pharmaceuticals
to vulnerable populations. In fact, the 340B program was intended to be complementary to Medicaid
and maximize federal resources to reach more indigent vulnerable individuals.
The policies and procedures for ensuring the complementary nature and integrity of the Medicaid and
340B programs, however, have not kept pace with the dramatic growth and evolution of the programs.
We are aware that the Health Resources and Services Agency (HRSA) is actively seeking to modernize
and strengthen certain aspects of the 340B program. Simultaneously, it is our understanding that the
Center for Medicaid and CHIP Services (CMCS) is assessing its role with respect to areas of overlap
between Medicaid and 340B.
States believe it is equally important to be vigilant in addressing the misalignments and opportunities
for administrative efficiencies present with the inherent intersections between Medicaid and 340B.
Many of the policy and administrative disconnects between the two programs impede states from
444 North Capitol Street, NW, Suite 524 ▪
Washington, DC 20001 ▪
Phone: 202.403.8620 ▪
www.medicaiddirectors.org
effectively complying with certain federal requirements. For example, states have identified challenges
posed by insufficient pricing transparency and operational standards as well as issues that arise in many
states administering managed care programs.
We appreciate that HRSA has begun to devote some attention to challenges posed by the overlap and
shared goals of these two programs. Still, more can be done to resolve the underlying policy and
operational disconnects. These require a full understanding of states’ concerns. It also requires ongoing,
meaningful communication between HRSA, CMS and the states as well as dedicated resources to
address some of the technical challenges that are essential for proper administration and program
integrity functions.
We believe the enclosed document will contribute to the important work your agencies are undertaking
to improve the efficient and effective administration of the Medicaid and 340B programs. We also
intend for it to help guide Congress should your agencies lack the authority to advance administrative
solutions.
We appreciate the initial discussions the experts on NAMD’s Pharmacy Workgroup have convened
with your respective staff and welcome the opportunity to continue those in the future.
Sincerely,
Matt Salo
Executive Director
Enclosure:
“Medicaid and the 340B Drug Discount Program: Alignment and Modernization Opportunities”
Page 2 of 2