medicaid prescription drugs · 2018. 6. 21. · of proposed rulemaking (nprm) discussed in this...

Medicaid Prescription Drugs

Covered Outpatient Drug Final Rule with Comment: Implementing the Provisions of the Affordable Care Act

For information, proposals and specific details regarding the notice of proposed rulemaking (NPRM) discussed in this slide deck, please see the NPRM entitled: “Medicaid; Covered Outpatient Drugs” that was published in the Federal Register on February 2, 2012 (77 FR 5318). This slide deck is not intended to replace or be considered in lieu of the NPRM or final rule with comment. In addition, these slides do not represent viewpoints or interpretations by the Centers for Medicare & Medicaid Services (CMS) that are in addition or contrary to those articulated in the NPRM or final rule. Because the information in this slide deck is only intended to be a general summary and is not a complete or full summary of the NPRM or final rule with comment, readers should consult and review the NPRM and final rule with comment for a full and accurate statement of its contents.

1

Covered Outpatient Drug Rule CMS-2345-FC

• NPRM published February 2, 2012.

• Final rule with comment published February 1, 2016.

• Over 425 commenters submitted comments.

• Effective date is April 1, 2016.

2

This information is only intended to be a general summary and

is not a complete or full summary of the final rule.

Key Provisions of the Final Rule with Comment

The key provisions of this final rule with comment (final rule) fall under one of three categories:

(1) Pharmacy Reimbursement;

(2) Manufacturer Reporting Requirements; and

(3) Rebate Requirements.

3



http://www.cms.gov/

Pharmacy Reimbursement

In this section we will cover:

• Actual Acquisition Cost (AAC)

• Professional Dispensing Fee

• Reimbursement for Federal Discount Programs (340B and Federal Supply Schedule (FSS))

• Federal Upper Limits (FUL)

4



http://www.cms.gov/

Actual Acquisition Cost (AAC)

Final Rule:

• Defines AAC (§447.502) to mean the agency’s determination of the pharmacy providers’ actual prices paid to acquire drug products marketed or sold by specific manufacturers.

• Replaces estimated acquisition cost (EAC) with AAC in §447.512(b).

• Explains that the change to AAC was necessary as it represents a more accurate reference price to be used by states to reimburse providers for drugs.

5



http://www.cms.gov/

AAC

• In accordance with the requirements of §447.512(b) payment for brand name drugs and for drugs for which a FULs is not established, payment must not exceed, in the aggregate, the lower of:

AAC plus a professional dispensing fee; or

Provider’s usual and customary charges to the general public.

6



http://www.cms.gov/

AAC Model of Reimbursement

• Examples of how a state can implement an AAC model of reimbursement include, but are not limited to, the following: A state survey of retail pharmacy providers’ pricing; A national survey of retail pharmacy providers’ pricing,

such as the National Average Drug Acquisition Cost (NADAC);

Published compendia prices, such as the Wholesale Acquisition Cost (WAC) (States will be expected to make adjustments to this benchmark to reflect discounts and other price concessions in the marketplace);

Average Manufacture Price (AMP) based pricing (the states can determine the relationship between AMP and other marketing factors).

7



http://www.cms.gov/

Professional Dispensing Fee

Final Rule:

• Finalizes replacing “dispensing fee” with “professional dispensing fee” in §447.502 (as applied in §447.512(b)).

• Reinforces CMS’ position that the fee to dispense the drug to a Medicaid beneficiary should reflect the pharmacist’s professional services and costs.

8



http://www.cms.gov/

Professional Dispensing Fee

• States have the flexibility to set their professional dispensing fee.

• State can use, but are not limited to, one of the following methods to establish their professional dispensing fee:

National survey/data

Regional/neighboring state survey/data

State-specific survey/data

9



http://www.cms.gov/

Reimbursement Requirements

• §447.518(d) requires that when states propose changes to either the ingredient cost or professional dispensing fee, states must consider both to ensure that total reimbursement to the pharmacy provider is in accordance with requirements of section 1902(a)(30)(A) of the Social Security Act (the Act).

• When proposing reimbursement changes, states are required to submit a state plan amendment (SPA) to CMS for review which includes a survey or other reliable data to support any proposed changes to either or both of the components of the reimbursement methodology.

10



http://www.cms.gov/

Reimbursement for Drugs Purchased Under Other Federal Drug Programs

§447.518 also requires that the state plan describe the agency’s payment methodology for prescription drugs, including the agency’s payment methodology for drugs dispensed by all the following:

• A covered entity described in section 1927(a)(5)(B) of the Act (340B covered entity pharmacy).

• A contract pharmacy under contract with a 340B covered entity described in section 1927(a)(5)(B) of the Act.

• An Indian Health Service, Tribal and Urban Indian pharmacy (I/T/U).

11



http://www.cms.gov/

Reimbursement for Drugs Purchased Under Other Federal Drug Programs

• In accordance with the requirements in §447.518(a)(2), the state’s payment methodology for drugs dispensed by 340B covered entities, 340B contract pharmacies, and I/T/U pharmacies must be in accordance with the definition of AAC in §447.502 of the final regulation.

For drugs purchased through the 340B program, reimbursement should not exceed the 340B ceiling price.

For drugs purchased outside the 340B program, the reimbursement

should not exceed the provider’s AAC. For drugs purchased through the FSS, reimbursement should not exceed

the FSS price. States that pay IHS and Tribal providers through encounter rates can

continue to pay at that rate since this will satisfy the requirements in §447.518(a)(2).

12



http://www.cms.gov/

State Plan Requirements

• States have four quarters from the effective date of the final rule, which is April 1, 2016, to revise their state plan and submit a SPA with an effective date no later than April 1, 2017 to comply with the provisions of §§447.512(b), 447.518(a), and 447.518(d) of the final regulation.

• When submitting a SPA, States must comply with the public notice provisions set forth in

§447.205.

States must also comply with requirements to solicit advice prior to submission from I/T/U providers pursuant to section 1902(a)(73) of the Act.

13



http://www.cms.gov/

The FUL

The Affordable Care Act:

• Revised the methodology for calculating a FUL for multiple source drugs as no less than 175% of the weighted

average of monthly reported AMPs.

• Required that the manufacturers’ total number of units that are used to calculate the monthly AMP be reported – (AMP units).

• Modified the confidentiality provisions to allow CMS to disclose the weighted average AMPs on a public website, but not individual AMPs for drug products.

14



http://www.cms.gov/

What changed with regard to the FUL?

NPRM §447.514

• Proposed that a FUL is calculated as an aggregate upper limit, as a 175 percent markup of the weighted average of AMPs for these drug products, not considering the AMP of any terminated drug product.

Final Rule §447.514

• Revised FUL formula to set a floor for the FULs that are below acquisition cost as measured by a national survey of retail pharmacy acquisition costs (i.e., the NADAC).

• Compare the weighted average of AMP x 175% to the comparable generic NADAC for each FUL group.

• When the weighted average of AMP x 175% is below the generic NADAC, the FUL will be adjusted to equal the most current generic NADAC rates or some other benchmark for AAC.

15



http://www.cms.gov/

Establishing the FUL

• The final rule finalizes the basic criteria for establishing a FUL:

Must be at least three pharmaceutically and therapeutically equivalent (“A rated”), innovator (I) and/or non-innovator (N) multiple source drug products at the NDC-9 level, or product code level, with a monthly AMP and AMP units, greater than zero, reported and certified by the labeler.

Will not include formulations of the drug that are not rated by the Food and Drug Administration (FDA) as pharmaceutically and therapeutically equivalent to the reference listed drug, (A-rated) in the calculation of the weighted average of monthly AMPs, or apply the FUL to those formulations that are not A-rated, e.g., B-rated drugs.

Will not include the AMP of a terminated drug in the weighted average of monthly AMPs.

16



http://www.cms.gov/

The Aggregate Standard

• In accordance with §447.514(b)(1), the upper limit for reimbursement continues to be established as an aggregate upper limit; therefore, states are not required to use the actual FUL amounts to reimburse for individual claims but may use another methodology, such as the NADAC or state maximum allowable cost to meet the aggregate upper limit.

17



http://www.cms.gov/

Exceptions to Comparing the 175% of Weighted Average AMP to the NADAC

• CMS will not calculate a FUL in the following instances: When there are multiple NADAC prices within the FUL Product

Group.

When there is not at least one corresponding NADAC NDC-11 for comparison to the FUL Product Group.

When the FUL Product Group is for a “5i drug” that is not generally dispensed to retail community pharmacies.

When all manufacturers ’ NDCs within the FUL Product Group are not reported with the same unit type for the drugs in the group.

• For further information please refer to the ACA FULs Methodology and Data Guide on Medicaid.gov.

18



http://www.cms.gov/

Establishing a FUL Price

• The NADAC pricing file lists certain drugs, approved under an Abbreviated New Drug Application (ANDA) as Branded-ANDAs (B-ANDA) drugs.

• These proprietary named drugs, although approved under an ANDA, are generally marketed and priced as brand drugs.

• Therefore, CMS will not compare a FUL Product Group’s weighted average of AMPs multiplied by 175 percent to the B-ANDA drugs listed on the NADAC file to calculate an Affordable Care Act FUL.

19



http://www.cms.gov/

Finalization of the FULs

• The final Affordable Care Act FULs will be published in late March 2016 and will be effective on April 1, 2016 to coincide with the effective date of the final rule.

• States will have up to 30 days from the April 1, 2016 effective date to implement the FULs.

• The FULs will be updated on a monthly basis and will be effective the first day of the following month.

• Once the final rule is effective, CMS will remove the FULs that are currently in effect, which were last updated on September 25, 2009.

20



http://www.cms.gov/

Publication of the FUL File

• That the date reflected in the title of the published monthly FUL file on the Medicaid.gov website is based on the previous month’s reported data. For example, the draft FULs published in January 2016 are based on the November 2015 monthly data which were due to CMS by or before December 30, 2015.

• As of the date that CMS published the draft Affordable Care Act FULs using the revised methodology in accordance with §447.514(b)(1) and (2) of the final rule, the three-month rolling average (3-MRA) FUL file was no longer published.

21



http://www.cms.gov/

FULs and State Reimbursement

• States are responsible for submitting a SPA demonstrating compliance with applicable requirements in the final rule if the state proposes any change relating to pharmacy reimbursement as they implement the provisions of §447.514.

22



http://www.cms.gov/

Questions?

23 This information is only intended to be a general summary and


Questions about the final rule with comment should be sent to [email protected]

with the question’s topic in the Subject line (e.g. Final Rule with comment - FULs).

http://www.cms.gov/

mailto:[email protected]

medicaid prescription drugs · 2018. 6. 21. · of proposed rulemaking (nprm) discussed in this...

Documents