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
If a manufacturer has a negative monthly AMP, should they use the most recent valid monthly AMP in the quarterly calculation?
CMS has previously provided guidance regarding the reporting of zero or negative AMP in Manufacturer Release #80 (January 5, 2010) in which we specify that if a calculated monthly AMP is zero or negative, we recommend that manufacturers report the most recent prior month's positive AMP. However, the actual calculated monthly AMP should be used to calculate the quarterly AMP. If the quarterly AMP is zero or negative, we recommend that manufacturers report the most recent positive AMP value. Please see Manufacturer Release #80: https://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Benefits/Prescription-Drugs/Downloads/Rx-Releases/MFR-Releases/mfr-rel-080.pdf. (PDF, 127.6 KB)
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94851
SHARE URLIf a manufacturer is currently not selling to entities or providers located in Puerto Rico and the U.S. Territories, will they be required to sell covered outpatient drugs to the U.S. Territories going forward (April 2017)?
The final rule does not require that a drug manufacturer sell its drugs to certain purchasers.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94856
SHARE URLFor smoothing of lagged price concessions and inclusion of sales from the U.S. Territories, should a manufacturer include the sales from the U.S. Territories in the 12 months of data for smoothing as of April 1, 2017 (going back to May 2016), or should they only include it in the smoothing only as of April 1, 2017 and prospectively?
Given the one year delay in the effective date of the definitions of states and United States, manufacturers should begin using sales data in their smoothing process beginning with sales that occur as of April 1, 2017.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94861
SHARE URLMany State demonstrations require that a transition plan to 2014 be submitted by a specified date, in many cases by July 1, 2012. Will CMS provide guidance and technical assistance before then? What specifically is required to be included in the transition plan?
CMS plans to provide technical assistance on transition plans to States through the State Operations and Technical Assistance Team (SOTA) calls and through other calls with the State. We will also be providing additional guidance about the information that should be included in the transition plans. We will consider the transition plans that need to be submitted by the due date as living documents that are open to revision, and will continue to work with States to ensure a seamless transition in 2014 for beneficiaries and States.
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FAQ ID:93021
SHARE URLHow should states account for the cost of the Health Insurance Providers Fee in their actuarially sound capitation rates?
States and their actuaries have flexibility in incorporating the Health Insurance Providers Fee into the state's managed care capitation rates. This fee is not unlike other taxes and fees that actuaries regularly reflect in developing capitation rates as part of the nonbenefit portion of the rate. CMS believes that the Health Insurance Providers Fee is therefore a reasonable business cost to health plans that is appropriate for consideration as part of the non-benefit component of the rate, just as are other taxes and fees.
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FAQ ID:91126
SHARE URLWhat methodologies are acceptable to account for the Health Insurance Providers Fee in capitation rates? Can states make retroactive adjustments to the capitation rates once the actual assessments on the health plans are known?
States have the flexibility to account for the Health Insurance Providers Fee on a prospective or retroactive basis. In the event that a prospective calculation results in a capitation rate that is too high or too low, the capitation rate may be adjusted after the actual tax assessment is known. States may also account for the fee prospectively by withholding such amounts until the health plan's actual fee is known. The capitation payment, net the amount of the withhold, must remain actuarially sound and the state can only claim Federal Financial Participation (FFP) on the actual expenditures paid from the withhold to reimburse the health plans for the fee.
States may account for the Health Insurance Providers Fee as an aggregated retroactive adjustment to the rates for the contract year once a health plan's liability is known. CMS anticipates that states would move to a prospective calculation as states and health plans obtain more experience with the fee.
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FAQ ID:91141
SHARE URLCan the Health Insurance Providers Fee be paid to health plans as a separate payment after the plans' fee liability is known?
No. There is no Federal Financial Participation (FFP) available for Health Insurance Providers Fee payments made outside of actuarially sound capitation rates, per the requirements of section 1903(m)(2)(A(iii) of the Social Security Act and implementing regulations at 42 CFR 438.6(c)(2). Therefore, any payment for the fee-whether on a prospective or retrospective basis-must be incorporated in the health plan capitation rates and reflected in the payment term under the contract.
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FAQ ID:91151
SHARE URLAre there any limitations around the use of the data year (e.g., 2013) or the fee year (e.g., 2014) as the base for any adjustment to the capitation rates to account for the Health Insurance Providers Fee?
There are reasonable ways to account for the Health Insurance Providers Fee as an adjustment to the states' capitation rates under either approach. In either approach, the amount of the fee should be incorporated as an adjustment to the capitation rates and the resulting payments should be consistent with the actual or estimated amount of the fee.
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FAQ ID:91161
SHARE URLIf the 2014 capitation rates are being adjusted to reimburse health plans for the Health Insurance Providers Fee due in 2014, should the adjustment be applied to every population?
No. Since the fee due in 2014 is based on the health plan's 2013 book of business, the adjustment should only apply to the capitation rates for populations that the state covered under the managed care contract in 2013. For example, states that chose to expand Medicaid eligibility starting January 1, 2014, should not adjust the capitation rates for the new adult eligibility group to account for the fee due in 2014, because they were not covered by the managed care plans in 2013. In future years, the Health Insurance Providers Fee will continue to be based on the book of business for the immediately preceding year, so this concept will apply in calculating the fee if any new populations are added to a state's managed care program.
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FAQ ID:91181
SHARE URLShould the potential effect of the Health Insurance Providers Fee on other taxes, fees, and assessments and the non-deductibility of the fee be considered in the development of capitation rates?
The potential effect of the fee may be considered in the development of the capitation rates. If the state's actuary takes these potential effects into account in developing the non-benefit component of the capitation rate attributable to the Health Insurance Providers Fee, the assumptions underlying that analysis will be documented in the rate certification.
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FAQ ID:91196
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