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January 25, 2016   

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About CPhA

Since its establishment in 1869, the California Pharmacists Association continues as the largest state association in the nation representing pharmacists. CPhA's membership covers the entire spectrum of pharmacy practice settings and includes student pharmacists and pharmacy technicians. The Association's vision is echoed by all CPhA members: A unified pharmacy profession, recognized as preeminent in patient care.

 

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CMS Issues Final Rule on Medicaid Reimbursement

Last Thursday, January 21st, CMS published its final rule for how states should pay for covered pharmacy outpatient drugs in the Medicaid program.

According to CMS, the new rule, " ... assists states and the federal government in managing drug costs, establishes the long term framework for implementation of the Medicaid drug rebate program, and creates a more fair reimbursement system for Medicaid programs and pharmacies." A fact sheet from CMS on the final rule can be found here

CPhA along with other state and national pharmacy organizations has advocated with CMS over the past decade as it developed components of the new rule to ensure both Medicaid beneficiary and pharmacy reimbursement interests were considered in the rule. Key highlights include: 
  • Codifies that states should use an Actual Acquisition Cost (AAC) methodology in determining the ingredient cost reimbursement for prescription drugs. If implemented, an AAC cost-based reimbursement would replace the current Average Wholesale Price (AWP) methodology in the fee-for-service program. The California Medi-Cal program has not yet stated whether it will move to an AAC methodology, although it is currently conducting a survey to collect data on actual generic drug costs. CPhA encourages its members to complete the survey to ensure the actual cost of acquiring generic drugs in California would be reflected in any future proposed change to an AAC methodology in the Medi-Cal program.
  • The new rule defines, and also affirms, a 'professional dispensing fee' paid to pharmacies and requires the fee to be reflective of the true cost of the pharmacist's professional time as well as all costs involved in dispensing the medication;
  • Clarifies that states are required to ensure that the drug ingredient cost reimbursement and the professional dispensing fee reimbursement are sufficient before changing to either of these reimbursement methods;
  • Defines 'Average Manufacturer Price', which will be used to determine manufacturer rebates and pharmacy payments for generic drugs that are subject to the Federal Upper Limit (FUL);
  • Creates an exception to the FUL calculation allowing for the use of a multiplier higher than 175% based on acquisition costs for certain multiple source drugs.
  • Includes rebates to Medicaid managed care organizations who cover Medicaid beneficiaries;
  • And, requires states to specify in the Medicaid state plan that reimbursement methodology to pharmacies that purchase drugs through the Federal Supply Schedule and the 340B Drug Pricing Program is consistent with overall AAC requirements.
CPhA will remain engaged with its state and national pharmacy partners to follow this issue and will work with the Medi-Cal pharmacy benefits division to ensure the new rule is implemented in California equitably and consistent with CMS guidance.