DAR File No. 41174

Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-60

Medicaid Policy for Pharmacy Program

Notice of Proposed Rule

(Amendment)

DAR File No.: 41174
Filed: 01/17/2017 09:10:36 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to implement coverage and reimbursement policies for covered outpatient drugs, effective 04/01/2017, in accordance with federal law.

Summary of the rule or change:

This amendment implements coverage and reimbursement policies for covered outpatient drugs in accordance with federal law.

Statutory or constitutional authorization for this rule:

• 42 CFR 447.502 through 447.520
• Section 26-1-5
• Section 26-18-3

Anticipated cost or savings to:

the state budget:

The Department anticipates this change to be budget neutral because savings created by the Federal Upper Limit and the National Average Drug Acquisition Cost are offset by variable increases in drug dispensing fees.

local governments:

There is no impact to local governments because they neither fund the Pharmacy program nor reimburse Medicaid providers for drug purchases.

small businesses:

There is no impact to small businesses because potential revenue is offset by the Federal Upper Limit, the National Average Drug Acquisition Cost, and increases in drug dispensing fees.

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

There is no impact to Medicaid providers because potential revenue is offset by the Federal Upper Limit, the National Average Drug Acquisition Cost, and increases in drug dispensing fees. Additionally, there is no impact to Medicaid clients because this change neither affects prescribed drug services nor creates out-of-pocket expenses.

Compliance costs for affected persons:

There are no compliance costs to a single Medicaid provider because higher dispensing fees are offset by potential revenue. Additionally, there is no impact to a single Medicaid client because this change neither affects prescribed drug services nor creates out-of-pocket expenses.

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

There is no fiscal impact on business because any increase in dispensing fees will be offset by other revenue.

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 cdevashrayee@utah.gov

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:

03/17/2017

This rule may become effective on:

04/01/2017

Authorized by:

Joseph Miner, Executive Director

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

R414-60. Medicaid Policy for Pharmacy Program.

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:

(a) Quantity limits or cumulative limits for a drug or drug class for a specified period of time;

(b) Therapeutic duplication limits may be placed on drugs within the same or similar therapeutic categories;

(c) Step therapy, including documentation of therapeutic failure with one drug before another drug may be used; or

(d) Prior authorization.

(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.

(4) Drugs may be restricted and are reimbursable only when dispensed by an individual pharmacy or pharmacies.

(5) 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.

(7) Drugs provided to clients during inpatient hospital stays are not 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']90-day 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.

(12) Medicaid may only cover hemophilia clotting factor when it is dispensed by a single-contracted provider in accordance with the Utah Medicaid State Plan.

 

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%]Wholesale Acquisition Cost;

(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.

(g) Pharmacies that participate in the Federal Supply Schedule and use medications obtained through the schedule to bill Utah Medicaid, must submit the actual acquisition cost of the medication on the claim unless the claim is reimbursed as a bundled charge or All Inclusive Rate.

(h) Pharmacies that obtain and use medications at a nominal price must submit the actual acquisition cost of the medication on the claim.

(i) The Utah Maximum Allowable Cost (UMAC) for drugs for which the Centers for Medicare and Medicaid Services (CMS) publishes a National Average Drug Acquisition Cost (NADAC), is the NADAC itself. The UMAC for which CMS does not publish a NADAC is calculated by the Department.

(3) Dispensing fees are as follows:

(a) $[3.90]9.99 for urban pharmacies in Utah;

(b) $[4.40]10.15 for rural pharmacies in Utah;

(c) $7.66 for pharmacies located in a state other than Utah;

(d) $716.54 for hemophilia clotting factor dispensed by the contracted provider.

[(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]e) Medicaid will pay the lesser of the assigned dispensing fee or the submitted dispensing fee;

([k]f) Medicaid will only pay one dispensing fee per [month]24 days 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]Wholesale Acquisition Cost [plus the]with no dispensing fee or the billed charges.

(8) In accordance with the Utah Medicaid State Plan, the Department may only reimburse a single-contracted provider for the purchase of hemophilia clotting factor.

 

R414-60-11. Compounds.

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

(2) Compounded sterile prescriptions are a covered benefit if at least one ingredient is a covered-outpatient 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: [December 1, 2016]2017

Notice of Continuation: April 30, 2012

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