MedicaidBilling CodesMedium impact
Clarification Regarding Billing for 340B Purchased Drugs
Illinois Medicaid - HFS·IL · Pharmacy·Provider Notice
Effective date
Jul 1, 2012
We identified it
Jun 20, 2026
Summary
340B providers must now report 340B purchased drugs using specific identifiers when billing: modifier 'UD' for professional and institutional claims, and Submission Clarification Code '20' for pharmacy point-of-sale claims. 340B providers can only charge actual acquisition cost plus established dispensing fees.
Action Required
By July 1, 2012: 340B enrolled providers must update billing processes to include modifier 'UD' on all professional claims (HFS 2360/837) and institutional claims (UB-04) for 340B purchased drugs. Pharmacy providers must populate Submission Clarification Code (420-DK) field with value '20' for point-of-sale claims. Billing team must ensure 340B drugs are charged at actual acquisition cost only, plus $3.40 dispensing fee for brand drugs and $6.35 for generics.