Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
When will the Centers for Medicare & Medicaid Services (CMS) provide standardized contract language reflecting the requirements of this provision as mentioned during the All-State Call on November 8th?
CMS will be working collaboratively with the National Association of Medicaid Directors (NAMD) to develop the contract elements necessary to reflect the requirements of this rule. In recognition of the State Medicaid Agency's role in the contracting practice, CMS will describe the suggested content areas rather than issue standardized contractual language. These elements will be described in further detail in a future (Question and Answer) Q&A document.
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FAQ ID:91421
SHARE URLHow will states with Medicaid managed care programs comply with the requirement to report provider participation levels specified in 42 CFR 447.400(d)(1)?
At this time, the Center for Medicare & Medicaid Services (CMS) is not defining the form of information required under 42 CFR 447.400(d)(1), but we do suggest that states with Medicaid managed care programs conduct a baseline assessment of primary care access before the provision goes into effect. This baseline assessment will ensure that Congress, CMS, and researchers have comparative data to evaluate this provision.
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FAQ ID:91426
SHARE URLIf a state can prove that they are under the aggregate limits of AAC and PDF and have strong participation by pharmacies, are they required to adopt the AAC and PDF reimbursement methodology at the individual claim level?
All states are required to adopt the AAC and professional dispensing fee methodology; however, it is not required to be adopted at the individual claim level, but in the aggregate. In accordance with the regulatory requirements at 42 CFR 447.512(b), the state is responsible for establishing a payment methodology, that must not exceed, in the aggregate, payment levels that the agency has determined by applying the lower of the AAC plus a professional dispensing fee or the providers' usual and customary charges to the general public. In conjunction with this the state is also responsible to ensure that pharmacy reimbursement is consistent
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94691
SHARE URLIf a state is already using actual acquisition cost (AAC) as their reimbursement methodology, does the state need to file a State Plan Amendment (SPA) or provide assurances that the current formula meets requirements established in the final rule? Is there a requirement for such states to file a SPA to provide assurance that the state's current dispensing fee amount meets the requirements of the final rule?
If a state is already making payment for prescription drugs under its state plan based on AAC, it may continue to use that methodology. However, if a state decides to change its AAC model of reimbursement, (e.g., the state decides to use the National Average Drug Acquisition Cost (NADAC) instead of a state survey to implement a payment methodology based on AAC), the state must submit a new SPA through the formal SPA process for review.
Additionally, the state should review its currently approved professional dispensing fee (PDF) to determine if, in light of the regulation (42 CFR 447.518), the PDF needs to be revised and a SPA needs to be submitted. The state does not have to submit a new SPA to provide assurance that its dispensing fee is reasonable.
Furthermore, we expect that all states, even those currently operating under an AAC reimbursement methodology, will evaluate their current state plans to determine if a SPA will be required to comply with the reimbursement requirements (including, but not limited to, AAC, PDF, 340B and the federal upper limits (FULs)).
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94671
SHARE URLWill there be an annual review of PDFs that are required as part of SPA approvals?
No, CMS will not perform an annual review of PDFs; however, states must consider both the ingredient cost reimbursement and the PDF reimbursement when proposing changes to ensure that total reimbursement to the pharmacy provider is calculated in accordance with requirements of section 1902(a)(30)(A) of the Act.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94676
SHARE URLWill CMS be providing guidance to states to ensure that states include reasonable components in their cost of dispensing survey?
To the extent that a state is conducting a cost of dispensing survey, it should be a transparent, comprehensive, and well-designed tool that addresses a pharmacy provider's cost to dispense the drug product to a Medicaid beneficiary. States have the flexibility to set PDFs, including using national or regional data from another state and we do not require that a state use a specific standard or methodology such as a survey to do so.
Further, states are not required to use a specific formula or methodology such as a cost study or use an inflation update where cost studies are not conducted; however, the burden is on each state to ensure that pharmacy providers are reimbursed in accordance with the requirements in section 1902(a)(30)(A) of the Act. CMS will review each SPA submission against these standards (see 81 FR 5311).
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94681
SHARE URLAfter a state evaluates changing reimbursement to actual acquisition cost plus an increased PDF and the state determines that the total cost of their pharmacy reimbursement will be increased compared to current costs, will CMS allow an adjustment in the PDF that would result in a cost neutral outcome?
The intent of the new reimbursement methodology requirements is not necessarily to result in a cost neutral outcome. The requirements are to more accurately reflect the pharmacy providers' actual prices paid to acquire drugs and the professional services required to fill a prescription. Each state's AAC reimbursement methodology and proposed professional dispensing fee will be reviewed through the SPA process to ensure they are meeting the requirements of this final rule.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94686
SHARE URLIf NADAC is updated monthly, and a drug has a price change before the next monthly NADAC file is published, can states backdate NADAC in order to reimburse pharmacy providers correctly?
The NADAC files have weekly updates posted on Medicaid.gov that reflect any price changes that have occurred since the last posted monthly file. States using the NADAC for their AAC reimbursement methodology will have access to the weekly updates of the NADAC to ensure pharmacies are reimbursed with the most updated NADAC pricing.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94696
SHARE URLPlease confirm whether the final rule's AAC-based reimbursement policy applies to how states pay for drugs administered by providers in hospital clinic areas as part of hospital outpatient services, whether they are paid as part of the service or separately.
AAC reimbursement requirements for covered outpatient drugs extend to retail community pharmacy providers where drugs are covered by Medicaid under the state's covered outpatient drug pharmacy benefit and are not reimbursed as part of a service. Physician-administered drugs are not required to meet AAC reimbursement requirements.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94701
SHARE URLAre state Medicaid programs required to implement NADAC or are other pricing methodologies acceptable so long as the state reimburses below the FUL in the aggregate? If states are required to implement NADAC, what is the date by which states are required to implement NADAC?
The FULs represent an aggregate upper limit, which gives states flexibility to determine payment rates for individual drugs in accordance with the approved state plan. For drugs that have a FUL calculated, a state can use the calculated FUL price for reimbursement, or they can use another metric, such as an AAC, for reimbursement, as long as that metric will allow the state to remain within the FUL aggregate. Generally, we can say with certainty that if a state uses the NADAC to reimburse for those drugs that have a FUL calculated, the state will not exceed the FUL aggregate. However, if a state wants to use another AAC metric for reimbursement (other than NADAC) for drugs that have a FUL calculated, the state must demonstrate that its AAC metric will allow them to remain within the FUL aggregate. CMS will allow the states four quarters from the effective date of the final rule with comment, which is April 1, 2016, to revise their state plan, if necessary, and submit a SPA with an effective date no later than April 1, 2017, to comply with requirements of 42 CFR 447.512(b).
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94711
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