Reimbursement : Amounts

Covered Outpatient Drug Reimbursement

Definition of Covered Outpatient Drugs

Covered outpatient drugs are drugs that are treated as prescribed drugs for the purposes of § 1905(a)(12) of the Social Security Act (42 U.S.C. § 1396d[a][12]) and meet the definition of a covered outpatient drug as found in 42 C.F.R. § 447.502. The AAC reimbursement requirements for covered outpatient drugs set forth in the Code of Federal Regulations do not include, in part, diabetic supplies, physician-administered drugs, or specialty drugs not purchased through the federal 340B Program.

Ingredient Cost

ForwardHealth reimburses covered outpatient drugs according to a separate ingredient cost and a professional dispensing fee. Ingredient cost reimbursement is based on AAC; as defined by 42 C.F.R. § 447.502, AAC is "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."

ForwardHealth uses the NADAC to reimburse ingredient cost for covered outpatient drugs, excluding drugs purchased through the federal 340B Program. CMS has stated the NADAC is an appropriate benchmark to establish AAC reimbursement. The NADAC is provided by CMS and calculated by a CMS vendor, Myers and Stauffer LC, a national certified public accounting firm. Myers and Stauffer LC conducts surveys of retail community pharmacy prices, including drug ingredient costs, to develop the NADAC pricing benchmark. NADAC pricing is available on the Medicaid website. The NADAC prices are updated on a weekly basis.

NADAC pricing review requests or notifications of recent drug price changes that may not be reflected in the posted NADAC file should be directed to the NADAC Help Desk. The NADAC Help Desk may be contacted through the following means:

• Telephone (toll-free): 855-457-5264
• Email: info@mslcrps.com
• Fax: 844-860-0236

ForwardHealth will not accept drug price review requests, disputes, or notifications of recent drug price changes for NADAC pricing.

Providers will be reimbursed at the lesser of the covered outpatient drug's NADAC rate, plus a professional dispensing fee, or the billed amount. If a covered outpatient drug does not have a NADAC rate available, then the provider will be reimbursed at the lesser of the drug's WAC or SMAC, if available, plus a professional dispensing fee, or the billed amount.

Providers will receive an informational EOB code on each detail on pharmacy noncompound and compound claims identifying the pricing benchmark used.

If an NDC does not have a NADAC, WAC or SMAC rate on file, the claim will be denied.

State Maximum Allowed Cost Policy

Under Wisconsin's State Medicaid Plan approved by CMS, Wisconsin Medicaid and WCDP may assign SMACs to establish an upper limit for payment of brand or generic versions of the same drug (federal legend or OTC drugs), regardless of manufacturer. SMAC rates are set by using best estimates of prices currently in the marketplace in comparison to NADAC and WAC as stated in the approved Wisconsin State Plan.