Virginia Regulatory Town Hall
Agency
Department of Medical Assistance Services
Board
Board of Medical Assistance Services

General Notice
Notice of Intent to Change the Reimbursement Methodology for Pharmacy Services
Date Posted: 8/29/2016
Expiration Date: 9/29/2016
Submitted to Registrar for publication: YES
31 Day Comment Forum closed. Began on 8/29/2016 and ended 9/29/2016

LEGAL NOTICE

COMMONWEALTH OF VIRGINIA

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

Notice of Intent to Change the Reimbursement Methodology for Pharmacy Services

Notice is hereby given that the Department of Medical Assistance Services (DMAS) intends to change the reimbursement methodology for pharmacy services pursuant to the Department’s authority under Title XIX of the Social Security Act.  This notice is intended to satisfy the requirements of 42 C.F.R. § 447.205 and of § 1902(a)(13) of the Social Security Act, 42 U.S.C. § 1396a(a)(13).  The changes contained in this public notice are occurring in response to the 2015 Acts of the Assembly, Item 301 QQ.

This notice is intended to satisfy the requirements of 42 C.F.R. § 447.205 and of § 1902(a)(13) of the Social Security Act, 42 U.S.C. § 1396a(a)(13). A copy of this notice is available for public review from Donna Proffitt, Manager, Pharmacy Services, Division of Health Care Services, DMAS, 600 Broad Street, Suite 1300, Richmond, VA  23219. Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Ms. Proffitt at Donna.Proffitt@dmas.virginia.gov and such comments are available for review at the same address.

DMAS is specifically soliciting input from stakeholders, providers and beneficiaries, on the potential impact of the proposed reimbursement adjustments to pharmacy services.  Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Ms. Proffitt and such comments are available for review at the same address.  Comments may also be submitted, in writing, on the Town Hall public comment forum attached to this notice.  ttp://townhall.virginia.gov/L/EditNotice.cfm?GNid=623

This notice is available for public review on the Regulatory Town Hall (www.townhall.com), on the General Notices page, found at:  https://townhall.virginia.gov/L/generalnotice.cfm

DMAS is making these changes in its methods and standards for setting payment rates for services in order to comply with the legislative mandates set forth in the 2016 Acts of Assembly, Chapter 780, Item 306.

In order to comply with a new requirements in a final federal rule entitled “Medicaid Program; Covered Outpatient Drugs” that was published in the Federal Register on February 1, 2016, DMAS proposes the following new payment methodology for pharmacy services effective December 1, 2016:

A.  Payment for covered outpatient legend and non-legend drugs dispensed by a retail community pharmacy will include the drug ingredient cost plus a $10.65 professional dispensing.  The drug ingredient cost reimbursement shall be the lowest of:

1)         The National Average Drug Acquisition Cost (NADAC) of the drug;

2)         When no NADAC is available, DMAS shall reimburse at Wholesale Acquisition Cost (WAC) + 0%; or

3)         The Federal Upper Limit (FUL); or

4)         The provider's usual and customary (U & C) charge to the public, as identified by the claim charge.

B. Payment for specialty drugs not dispensed by a retail community pharmacy but dispensed primarily through the mail will include the drug ingredient cost plus a $10.65 professional dispensing.  The drug ingredient cost reimbursement shall be the lowest of:

1)         The National Average Drug Acquisition Cost (NADAC) of the drug;

2)         When no NADAC is available, DMAS shall reimburse at Wholesale Acquisition Cost (WAC) + 0%; or

3)         The Federal Upper Limit (FUL); or

4)         The provider's usual and customary (U & C) charge to the public, as identified by the claim charge.

C. Payment for drugs not dispensed by a retail community pharmacy (i.e., institutional or long-term care facility pharmacies ) will include the drug ingredient cost plus a $10.65 professional dispensing.  The drug ingredient cost reimbursement shall be the lowest of:

1)         The National Average Drug Acquisition Cost (NADAC) of the drug;

2)         When no NADAC is available, DMAS shall reimburse at Wholesale Acquisition Cost (WAC) + 0%; or

3)         The Federal Upper Limit (FUL); or

4)         The provider's usual and customary (U & C) charge to the public, as identified by the claim charge.

D. Payment for clotting factor from specialty pharmacies, hemophilia treatment centers (HTC) and Centers of Excellence will include the drug ingredient cost plus a $10.65 professional dispensing.  The drug ingredient cost reimbursement shall be the lowest of:

1)         The National Average Drug Acquisition Cost (NADAC) of the drug;

2)         When no NADAC is available, DMAS shall reimburse at Wholesale Acquisition Cost (WAC) + 0%; or

3)         The provider's usual and customary (U & C) charge to the public, as identified by the claim charge.

E.         (1)  340B covered entities and Federally Qualified Health Centers (FQHCs) that fill Medicaid member prescriptions with drugs purchased at the prices authorized under Section 340B of the Public Health Services Act will be reimbursed no more than the actual acquisition cost for the drug plus a $10.65 professional dispensing fee.   340B covered entities that fill Medicaid member prescriptions with drugs not purchased under the Section 340B of the Public Health Services Act will be reimbursed in accordance to section 7.1 plus the $10.65 professional dispensing fee as described in section 7.8.

(2) Drugs acquired through the federal 340B drug price program and dispensed by 340B contract pharmacies are not covered.

F.  Facilities purchasing drugs through the Federal Supply Scheduled (FSS) or drug pricing program under 38 U.S.C. 1826, 42 U.S.C. 256b, or 42 U.S.C. 1396-8, other than the 340B drug pricing program will be reimbursed no more than the actual acquisition cost for the drug plus a $10.65 professional dispensing fee.   Nominal Price as defined in §447.502 of the Code of Federal Regulations, Part  42 means a price that is less than 10 percent of the average manufacturer price (AMP) in the same quarter for which the AMP is computed.

G. Payment for pharmacy services will be as described above in sections 7.1 - 7.7; however, payment shall include the allowed cost of the drug plus only one professional dispensing fee, as defined at 42 CFR 447.502,  per month for each specific drug. Exceptions to the monthly dispensing fees shall be allowed for drugs determined by the department to have unique dispensing requirements. The professional dispensing fee for all covered outpatient drugs shall be $10.65.  The professional dispensing fee shall be determined by a cost of dispensing survey conducted at least every five (5) years.

H. Physician administered drugs (PADs) submitted under the medical benefit will be reimbursed at 106 percent of the Average Sales Price (ASP).   PADs without an ASP on the CMS reference file will be reimbursed at the provider’s acquisition cost. Covered entities using drugs purchased at the prices authorized under Section 340B of the Public Health Services Act for Medicaid members must bill Medicaid their actual acquisition cost (AAC).

I. Payment for dispensed to Indian Health Service, tribal and urban Indian pharmacies.  DMAS does not have any Indian Health Service, tribal or urban Indian pharmacies enrolled at this time.  Payment for pharmacy services will be defined in a state plan amendment if such entity enrolls with DMAS.

J. Investigational drugs are not a covered service under the DMAS pharmacy program.


Contact Information
Name / Title: Emily McClellan  / Regulatory Manager
Address: Division of Policy and Research
600 E. Broad St., Suite 1300
Richmond, 23219
Email Address: Emily.McClellan@dmas.virginia.gov
Telephone: (804)371-4300    FAX: (804)786-1680    TDD: (800)343-0634