The HHS Office of Inspector General (OIG) has released a report entitled "State Medicaid Policies and Oversight Activities Related to 340B-Purchased Drugs."  By way of background, the 340B program limits the prices that participating manufacturers may charge for outpatient drugs purchased by certain “covered entities” that act as “safety net” providers of services to low-income individuals (e.g., community health centers, critical access hospitals, and children’s hospitals). The program is administered at the federal level by the Health Resources and Services Administration (HRSA). State Medicaid agencies also may set specific policies for covered entities that dispense 340B-purchased drugs to Medicaid patients, but CMS does not require such policies for Medicaid programs. According to the OIG, state Medicaid agencies lack the policies and/or information that they need to oversee reimbursements for drugs purchased under the 340B program. Only half of states report having written policies that direct covered entities to bill 340B-purchased drugs at cost, and just one state has a prepay edit to ensure accurate reimbursement specifically for 340B claims. States also reported shortcomings in the data available through the Medicaid Exclusion File, which states use to identify covered entities that dispense 340B-purchased drugs to Medicaid patients so states can exclude the claims from Medicaid rebate requests. The OIG recommends that: (1) CMS direct states to create policies for covered entities billing Medicaid for 340B-purchased drugs and inform states about methods to identify reimbursement for such drugs; (2) HRSA share 340B ceiling prices with states; and (3) HRSA and CMS take steps improve the accuracy of the Medicaid Exclusion File. CMS and HRSA concurred with the recommendations.