As CPhA first reported
last month
, the Centers for Medicare & Medicaid Services (CMS) finalized the Average Manufacturer Price-based Federal Upper Limit Final Rule (AMP FUL
Final Rule
). The Final Rule updates and codifies changes to the payment methodology for prescription drugs in state Medicaid programs, including Medi-Cal.
The changes to payments for prescription drugs will take place in two stages: first with the implementation of the AMP-based FULs for multisource drugs in April 2016, followed by the implementation of either the National Average Drug Acquisition Cost (NADAC) or state-specific Average Acquisition Cost (AAC) for single source drugs in April 2017. Medi-Cal announced in
this message
on March 14th
that with the legal challenges settled and this directive from CMS that they would implement the AMP-based FULs beginning April 15, 2016.
Unfortunately, while the Final Rule requires states to adjust professional dispensing fees when NADAC or AAC is implemented in April 2017, states are not required to adjust their professional dispensing fees when the AMP-based FULs are implemented in April 2016.
As a result, California pharmacies are expected to experience reductions in generic product reimbursement with no increase in professional dispensing fees for up to one year during this period.
Pharmacists should know that if the new FUL pricing for a claim results in reimbursement below acquisition cost, pharmacies can continue to submit pricing TARs for specific claims. Additionally, drugs with a FUL that results in a reimbursement amount less than the provider's ability to purchase the drug, due to the AB 97 10% cuts can be submitted to DHCS for consideration of exemption (though please note that initial reimbursement may include the cut and adjustments may need to be made retroactively). Learn more about AB 97 exemption requests here. Pharmacies should also work with their wholesalers, PSAOs and other contracted entities to review the terms and conditions of their generic purchasing to minimize the impact of these reductions.
CPhA will continue to meet with the Department of Health Care Services (DHCS) Medi-Cal Pharmacy leadership and is encouraged by the opportunities that AAC will bring next year to finally review and adjust the professional dispensing fee appropriately. However, in the interim year, the AMP-based FULs will have a significant impact on pharmacies generic drug reimbursement until the AAC provisions are fully implemented.
Watch for additional information in the coming weeks regarding this matter.
