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DAR File No. 32660

This filing was published in the 06/01/2009, issue, Vol. 2009, No. 11, of the Utah State Bulletin.

Health, Health Care Financing, Coverage and Reimbursement Policy


Service Coverage


DAR File No.: 32660
Filed: 05/11/2009, 05:36
Received by: NL


Purpose of the rule or reason for the change:

This change is necessary to comply with the provisions of S.B. 87 that remove the automatic override to the preferred drug list and add prior authorization requirements. (DAR NOTE: S.B. 87 (2009) is found at Chapter 324, Laws of Utah 2009, and was effective 05/12/2009.)

Summary of the rule or change:

This change removes the automatic override to the preferred drug list and outlines the prior authorization requirements to dispense nonpreferred drugs to Medicaid clients. (DAR NOTE: A corresponding 120-day (emergency) rule is under DAR No. 32659 in this issue, June 1, 2009, of the Bulletin, and was effective 05/18/2009.)

State statutory or constitutional authorization for this rule:

Sections 26-18-2.4 and 26-18-3

Anticipated cost or savings to:

the state budget:

The Department estimates an annual savings to the General Fund of $1,474,300 and $3,687,800 in federal dollars.

local governments:

There is no budget impact because local governments do not fund the Medicaid pharmacy program.

small businesses and persons other than businesses:

In aggregate, pharmacy providers are expected to see a reduction in total revenue of $5,162,100 because of this change.

Compliance costs for affected persons:

Not knowing the profit margins for the pharmacies on the impacted drugs, the Department cannot say with certainty that this change will result in lost profits. Providers may experience an increase in the number of prior authorizations they are required to handle. The Utah Medical Association and the Utah Pharmacists Association supported the change in law that this rule implements. Any increased cost for health care providers will be minimal compared to the savings for Utah taxpayers.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule change is expected to save the taxpayers over $5 million per year in state and federal funds. The additional cost for health care providers and any inconvenience to Medicaid recipients is expected to be minimal by comparison. David N. Sundwall, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health Care Financing, Coverage and Reimbursement Policy
288 N 1460 W
SALT LAKE CITY UT 84116-3231

Direct questions regarding this rule to:

Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:


This rule may become effective on:


Authorized by:

David N. Sundwall, Executive Director


R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-60B. Preferred Drug List.

R414-60B-4. Service Coverage.

(1) Upon the recommendation of the Pharmacy and Therapeutics (P&T) Committee, DHCF pharmacy staff select the therapeutic classes and select the most clinically effective and cost effective drug or drugs within each class.

(2) The prescriber must [write "medically necessary -- dispense as written" on the prescription and have justification in the patient's medical record substantiating the medical necessity of a non-preferred drug in order for this to be reimbursed]obtain prior authorization from the Department to dispense drugs designated as "non-preferred" in each class, through the Department's current prior authorization system. Criteria for a Non-preferred Prior Authorization (NPA) is established by the Department in consultation with the Pharmacy and Therapeutics Committee.

(3) [The preferred drug or drugs are covered without the notation required in (2)]A prior authorization is not placed on any preferred drugs under Section R414-60B-4. Nevertheless, a prior authorization may apply if set by the Drug Utilization Review Board.

(4) For NPA requests submitted during normal business hours, Monday through Friday, 8 a.m. to 5 p.m., the prior authorization system shall provide either telephone or fax approval or denial within 24 hours of the receipt of the request.

(5) In an emergency situation for a prior authorization needed outside of normal business hours, a 72-hour supply of a non-preferred drug may be dispensed and the Department shall issue an NPA for the 72-hour supply on the next business day. Further quantity requests shall be subject to all NPA requirements.


KEY: Medicaid

Date of Enactment or Last Substantive Amendment: [September 21, 2007]2009

Authorizing, and Implemented or Interpreted Law: 26-18-2.4; 26-18-3; 26-1-5




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For questions regarding the content or application of this rule, please contact Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.

Last modified:  07/14/2009 9:52 PM