DAR File No. 40845

Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-60

Medicaid Policy for Pharmacy Program

Notice of Proposed Rule

(Amendment)

DAR File No.: 40845
Filed: 09/30/2016 09:09:39 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to update and implement by rule Medicaid pharmacy policy.

Summary of the rule or change:

This amendment implements pharmacy policy through new definitions, updates eligibility requirements, clarifies coverage and limitations for prescription drugs, specifies co-payment policy, spells out Medicaid policy for drug reimbursement, and implements policy to cover over-the-counter drugs and drug compounds.

Statutory or constitutional authorization for this rule:

• Section 26-18-3
• 42 CFR 447.512
• Section 26-18-2.4

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget because this amendment only implements by rule ongoing pharmacy policy. It neither affects current services to Medicaid clients nor reimbursement to Medicaid providers.

local governments:

There is no impact to local governments because this amendment only implements by rule ongoing pharmacy policy. It neither affects current services to Medicaid clients nor reimbursement to Medicaid providers.

small businesses:

There is no impact to small businesses because this amendment only implements by rule ongoing pharmacy policy. It neither affects current services to Medicaid clients nor reimbursement to Medicaid providers.

persons other than small businesses, businesses, or local governmental entities:

There is no other budget impact because this amendment only implements by rule ongoing pharmacy policy. It neither affects current services to Medicaid clients nor reimbursement to Medicaid providers.

Compliance costs for affected persons:

There are no compliance costs to a single Medicaid client or to a Medicaid provider because this amendment only implements by rule ongoing pharmacy policy. It neither affects current services nor reimbursement.

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

There is no fiscal impact on business because the amendment implements by rule the existing Medicaid pharmacy policy.

Joseph K. Miner, MD, Executive Director

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

Health
Health Care Financing, Coverage and Reimbursement Policy
CANNON HEALTH BLDG
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 [email protected]

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:

11/14/2016

This rule may become effective on:

12/01/2016

Authorized by:

Joseph Miner, Executive Director

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

R414-60. Medicaid Policy for Pharmacy Program.

R414-60-1. Introduction. [and Authority.]

[(1) ]The [Utah ]Medicaid Pharmacy program reimburses for[,] covered[, prescribed] outpatient drugs dispensed to eligible [m]Medicaid clients by a pharmacy enrolled with Utah Medicaid pursuant to a prescription from an enrolled prescriber operating within the scope of the prescriber's license.

[(2) This rule is authorized by 42 CFR 447.331, 42 CFR 447.15 and .50, the Utah Pharmacy Practice Act 58-17a-605, Utah health Code 26-18-105, and House Bill 268.]

 

R414-60-2. Definitions.

(1) "Covered outpatient drug" means a drug that meets all of the following criteria:

(a) Requires a prescription for dispensing;

(b) Has a National Drug Code number;

(c) Is eligible for Federal Medical Assistance Percentages funds;

(d) Has been approved by the Food and Drug Administration; and

(e) Is listed in the Medi-Span drug file.

(2) "Full-benefit dual eligible beneficiary" means an individual who has Medicare and Medicaid benefits.

(3) "Rural pharmacy" means a pharmacy located in the state of Utah, which is outside of Weber County, Davis County, Utah County, and Salt Lake County.

(4) "Urban pharmacy" means a pharmacy located in Weber County, Davis County, Utah County, Salt Lake County, or in another state.

(5) "Usual and customary charge" is the lowest amount a pharmacy charges the general public for a covered outpatient drug, which reflects all advertised savings, discounts, special promotions, or any other program available to the general public.

 

R414-60-[2]3 . Client Eligibility Requirements.

(1) [Prescribed drugs are covered for Medicaid eligible, categorically and medically needy individuals]Medicaid covers prescription drugs for individuals who are categorically and medically needy under the Medicaid program.

(2) [Effective January 1, 2006, o]Outpatient drugs [covered under]included in the Medicare Prescription Drug Benefit-Part D for full-benefit dual eligible beneficiaries [who are defined as individuals who have Medicare and Medicaid benefits,]will not be covered under Medicaid in accordance with [SSA 1935(a)]Subsection 1935(a) of the Social Security Act. Certain limited drugs provided in accordance with Subsection 1927(d)(2) of the Social Security Act to all Medicaid recipients, but not included in the Medicare Prescription Drug Benefit-Part D, are payable by Medicaid.

(3) Outpatient drugs included in contracts with the Accountable Care Organization (ACO) must be obtained through the ACO for clients enrolled in an ACO.[

(3) Drugs excluded under Medicare-Part D are not covered by Medicaid for dual eligible recipients. Certain limited drugs provided, in accordance with SSA, Section 1927(d)(2), to all Medicaid recipients, and not covered under the Medicare Prescription Drug Benefit-Part D, are payable by Medicaid. These drugs are limited as described in the Pharmacy Provider Manual and include some, but not all (a) agents when used for cough and cold, (b) over-the-counter drugs, and all ( c) barbiturates, (d) benzodiazepines.

 

R414-60-3. Program Access Requirements.

Pharmacy services must be prescribed by a Utah licensed health care provider lawfully permitted to issue the prescription. The pharmacy filling the prescription must be enrolled as a Utah Medicaid provider. The clients receiving the pharmacy services may be living at home, a Long Term Care (LTC) facility, an Extended Care or Skilled facility or a community based group home.]

 

R414-60-4. Program Coverage.

(1) [All drugs are covered from manufacturers who have signed rebate agreements with Health Care Financing beginning with the SSA Title XIX and the Obra Law of 1990.]Covered outpatient drugs eligible for Federal Medical Assistance Percentages funds are included in the pharmacy benefit; however, covered outpatient drugs may be subject to limitations and restrictions.[

(2) The optional drugs allowed in SSA 1927 (d)(2) are covered as follows, some, but not all (a) agents when used for cough and cold, (b) over-the-counter drugs, and all ( c) barbiturates, (d) benzodiazepines.]

([3]2) In accordance with [Utah Law]Subsection 58-17b-606(4), when a multi -source A-rated legend drug is available in the generic form, Medicaid will only reimburse[ment] for the generic form of the drug [will be made ]unless:

(a) reimbursing for the non-generic brand-name legend drug will result in a financial benefit to the State; or

(b) the treating physician demonstrates a medical necessity for dispensing the non -generic, brand-name legend drug.

(3) Prescriptions that are not executed electronically must be written on tamper-resistant prescription forms. Tamper-resistant prescription forms must include all of the following:

(a) One or more industry-recognized features designed to prevent unauthorized copying of a completed or blank prescription form;

(b) One or more industry-recognized features designed to prevent the erasure or modification of information written on the prescription by the prescriber; and

(c) One or more industry-recognized features designed to prevent the use of counterfeit prescription forms.

(d) Documentation by the pharmacy of verbal confirmation of a prescription not written on a tamper resistant prescription form by the prescriber or the prescriber's agent satisfies the tamper-resistant requirement. Documentation of the verbal confirmation must include the date, time, and name of the individual who verified the validity of the prescription.

(e) Pharmacies must maintain documentation of receipt of a prescription by a Medicaid client or the client's authorized representative. The documentation must clearly identify the covered outpatient drug received by the client, the date the covered outpatient drug was received, and who received the covered outpatient drug.

(f) Claims for covered outpatient drugs not dispensed to a Medicaid client or the client's authorized representative within 10 days must be reversed and any payment from Medicaid must be returned.

 

R414-60-5. Limitations.

(1) Limitations may be placed on drugs in accordance with 42 U.S.C. 1396r-8 or in consultation with the Drug Utilization Review (DUR) Board. Limitations are included in the Pharmacy Services Provider Manual and attachments, incorporated by reference in Section R414-1-5, and may include:

([1]a) Quantity limits or [C]cumulative [amounts]limits for a drug or drug class for [30 day periods may apply to some drug categories]a specified period of time[.];

([2]b) Therapeutic duplication limits[Limitations may be placed upon drugs the same as imposed by manufacturers and the Food and Drug Administration (FDA)] may be placed on drugs within the same or similar therapeutic categories;[.

(3) Duplication of drugs within therapeutic categories is limited.]

([4]c) Step therapy, [requiring]including documentation of therapeutic failure with one drug before [reimbursement for ]another drug [in the same category ]may be used[.]; or

([5]d) Prior authorization.[Pharmacy reimbursement for some drugs is regulated by prior approval as described in the provider manual.]

(2) A covered outpatient drug that requires prior authorization may be dispensed for up to a 72-hour supply without obtaining prior authorization during a medical emergency.

(3) Drugs listed as non-preferred on the Preferred Drug List may require prior authorization as authorized by Section 26-18-2.4.

([6]4) [Some d]Drugs may be[supplied through contracted specialty pharmacies.]restricted and are reimbursable only when dispensed by an individual pharmacy or pharmacies.

([7]5) [Medicaid may use the criteria developed by academics and professionally recognized experts to determine product utilization in order to achieve reasonable outcomes for client improvement, elimination of pain, and/or recovery.

(8) Drug Efficacy Study Implementation Project Drugs (DESI Drugs) as determined by the FDA to be less-than-effective are not a benefit]Medicaid does not cover drugs not eligible for Federal Medical Assistance Percentages funds.

(6) Medicaid does not cover outpatient drugs included in the Medicare Prescription Drug Benefit-Part D for full-benefit dual eligible beneficiaries.

([9]7) [Other drugs and/or categories of drugs as determined by the Utah State Division of Health Care Financing and listed in the Pharmacy Provider Manual are not a benefit.

(10) The Drug Utilization Review Board (DUR) recommends appropriate drug use for covered drugs. The DUR reviews and approves Medicaid drug use criteria and policy. The board makes determinations on specific cases and requests for therapeutic drug use.

(11) Clients whose prescriptions exceed seven prescriptions per month are subject to a clinical review by the Division.

(12)]Drugs provided to clients during inpatient hospital stays are not [a benefit and are included in the DRG payment]covered as an outpatient pharmacy benefit nor separately payable from the Medicaid payment for the inpatient hospital services.

(8) Medicaid covers only the following prescription cough and cold preparations meeting the definition of a covered outpatient drug:

(a) Guaifenesin with Dextromethorphan (DM) 600mg/30mg tablets;

(b) Guaifenesin with Hydrocodone 100mg/5mL liquid;

(c) Promethazine with Codeine liquid;

(d) Guaifenesin with Codeine 100mg/10mg/5mL liquid;

(e) Carbinoxamine with Pseudoephedrine 1mg/15mg/5mL liquid; and

(f) Carbinoxamine/Pseudoephedrine/DM 15mg/1mg/4mg/5mL liquid.

(9) Medicaid will pay for no more than a one-month supply of a covered outpatient drug per dispensing, except for the following:

(a) Medications included on the Utah Medicaid Generic Medication Three-Month Supply Medication List attachment to the Pharmacy Services Provider Manual may be covered for up to a three-month supply per dispensing. Medicaid clients eligible for Primary Care Network services under Rule R414-100 are not eligible to receive more than a one-month supply per dispensing.

(b) Prenatal vitamins for pregnant women, multiple vitamins with or without fluoride for children through five years of age, and fluoride supplements may be covered for up to a one- hundred days' supply per dispensing.

(c) Medicaid may cover contraceptives for up to a three-month supply per dispensing.

(10) Medicaid will pay for a prescription refill only when 80% of the previous prescription has been exhausted, with the exception of narcotic analgesics. Medicaid will pay for a prescription refill for narcotic analgesics after 100% of the previous prescription has been exhausted.

(11) Medicaid does not cover the following drugs:

(a) Drugs not eligible for Federal Medical Assistance Percentages funds;

(b) Drugs for anorexia, weight loss or weight gain;

(c) Drugs to promote fertility;

(d) Drugs for the treatment of sexual or erectile dysfunction;

(e) Drugs for cosmetic purposes or hair growth;

(f) Vitamins; except for prenatal vitamins for pregnant women, vitamin drops for children through five years of age, and fluoride supplements;

(g) Over-the-counter drugs not included in the Utah Medicaid Over-the-Counter Drug List attachment to the Pharmacy Services Provider Manual;

(h) Drugs for which the manufacturer requires, as a condition of sale, that associated tests and monitoring services are purchased exclusively from the manufacturer or its designee;

(i) Drugs given by a hospital to a patient at discharge;

(j) Breast milk, breast milk substitutes, baby food, or medical foods, except for prescription metabolic products for congenital errors of metabolism;

(k) Drugs available only through single-source distribution programs, unless the distributor is enrolled with Medicaid as a pharmacy provider.

 

R414-60-6. Copayment Policy.

[Each Medicaid client is responsible]Medicaid clients are to pay a ny applicable copayment amount that complies with the requirements of the Utah Medicaid State Plan and Rule R414-1.

 

R414-60-7. Reimbursement.

( 1) A pharmacy may not submit a charge to Medicaid that exceeds the pharmacy's usual and customary charge.

(2) Covered outpatient drugs are reimbursed at the lesser of the following:

(a) The Average Wholesale Price less 17.4%;

(b) The Federal Upper Limit assigned by the Centers for Medicare and Medicaid Services;

(c) The Utah Maximum Allowable Cost; and

(d) The submitted ingredient cost.

(e) If a prescriber obtains prior authorization for a brand-name version of a multi-source drug in accordance with 42 CFR 447.512 or if a brand-name drug is covered because a financial benefit will accrue to the State in accordance with Section 58-17b-606, then Medicaid will not apply the Utah Maximum Allowable Cost or Federal Upper Limit to the claim.

(f) Pharmacies participating in the 340B program and using medications obtained through the 340B program to bill Medicaid must submit the actual acquisition cost of the medication on the claim.

(3) Dispensing fees are as follows:

(a) $3.90 for urban pharmacies;

(b) $4.40 for rural pharmacies;

(c) $1 for covered over-the-counter drugs excluding liquid antacids, insulin, and oral contraceptives for all pharmacies;

(d) $0.50 multiplied by the quantity dispensed divided by the package size for liquid antacids for all pharmacies;

(e) $12.39 for pharmacies participating in the 340B program and using medications obtained through the 340B program to bill Medicaid;

(f) $8.90 for Category J drugs identified in Attachment 4.19-B, Page 19a(2) of the Utah Medicaid State Plan;

(g) $18.90 for Category K drugs identified in Attachment 4.19-B, Page 19a(2) of the Utah Medicaid State Plan;

(h) $22.90 for Category L drugs identified in Attachment 4.19-B, Page 19a(2) of the Utah Medicaid State Plan;

(i) $33.90 for Category M drugs identified in Attachment 4.19-B, Page 19a(2) of the Utah Medicaid State Plan;

(j) Medicaid will pay the lesser of the assigned dispensing fee or the submitted dispensing fee;

(k) Medicaid will only pay one dispensing fee per month per covered outpatient drug per pharmacy for prescriptions for clients in nursing homes.

(4) Medicaid will pay the lesser of the sum of the allowed amount for the covered outpatient drug and dispensing fee or the billed charges.

(5) Immunizations provided to Medicaid clients who are at least 19 years of age will be paid for the cost of the immunization plus a dispensing fee of $8.90. Medicaid will pay the lesser of the allowed or submitted charges.

(6) Immunizations provided to Medicaid clients who are 18 years old or younger will only be eligible for a dispensing fee of $14.52 with no reimbursement for the immunization. Immunizations for Medicaid clients who are 18 years old or younger must be obtained through the Vaccines for Children program.

(7) Blood glucose test strips listed as preferred on the Utah Medicaid Preferred Drug List will be reimbursed at the lesser of the Average Wholesale Price plus the dispensing fee or the billed charges.

[Pharmaceuticals are reimbursed using the fee schedule as established in the Utah Medicaid State Plan and incorporated by reference in R414-1-5(2).]

 

R414-60-8. Mandatory Patient Counseling.

(1) Medicaid clients, or their representatives, must receive counseling that fulfills the requirements of 42 U.S.C. 1396r-8 each time a covered outpatient medication is dispensed.

(2) Counseling is not required if a Medicaid client, or their representative, refuses the offer to counsel.

(3) The offer to counsel must be documented and producible upon request.

 

R414-60-9. New Drug Products.

A new drug product, including a new size or strength of an existing approved product, may be reviewed by the DUR Board to determine whether the drug should be subject to restrictions or limitations. New drugs may be withheld from coverage for no more than twelve weeks while restrictions or limitations are being evaluated.

 

R414-60-10. Over-the-Counter Drugs.

Medicaid covers over-the-counter drugs when the drug is listed on the Utah Medicaid Over-the-Counter Drug List attachment to the Pharmacy Services Provider Manual, incorporated by reference in Section R414-1-5.

 

R414-60-11. Compounds.

(1) Compounded non-sterile prescriptions are a covered benefit if at least one ingredient is a drug that would otherwise qualify for coverage.

(2) Compounded sterile prescriptions are a covered benefit if at least one ingredient is a drug that would otherwise qualify for coverage, and is prepared by a pharmacy that has certified to Utah Medicaid that it adheres to the United States Pharmacopeia/National Formulary chapter <797> standard, and tests the final product for sterility, potency and purity.

(3) Claims for compounded drugs may be eligible for a dispensing fee for each covered ingredient, but limited to no more than three dispensing fees per claim regardless of the number of covered ingredients.

 

KEY: Medicaid

Date of Enactment or Last Substantive Amendment: [May 1, 2010]2016

Notice of Continuation: April 30, 2012

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