RELATES TO:KRS 205.5510 to 205.5520,
205.560,
205.561,
205.5631,
205.5632,
205.5634,
205.5636,
205.5638,
205.5639,
205.622,
205.6316(4),
217.015,
42
C.F.R. 440.120,
447.45,
447.500 -
447.520,
42
U.S.C. 256b,
1396a
- 1396d,
1396r-8
NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and
Family Services, Department for Medicaid Services has responsibility to
administer the Medicaid Program.
KRS
205.520(3) authorizes the
cabinet, by administrative regulation, to comply with any requirement that may
be imposed or opportunity presented by federal law to qualify for federal
Medicaid funds.
KRS
205.561(2) and
205.6316(4)
require the department to promulgate an administrative regulation to establish
the professional dispensing fee for covered drugs. This administrative
regulation establishes the Medicaid Program reimbursement requirements,
including the professional dispensing fee, for covered outpatient drugs
dispensed to all enrolled Medicaid recipients.
Section 1. Reimbursement. Reimbursement to a
pharmacy or medical provider participating in the Medicaid Program for a
covered outpatient drug provided to an eligible recipient shall be determined
in accordance with the requirements established in this section.
(1) A rebate agreement in accordance with
42 U.S.C.
1396r-8(a) shall be signed
by the drug manufacturer, or the drug shall be provided based on an exemption
from the rebate requirement established by
907 KAR
23:010, Section 5(3).
(2) A pharmacy claim shall meet the point of
sale (POS) requirements for services in accordance with
907 KAR
1:673.
(3)
Reimbursement shall not be made for more than one (1) prescription to the same
recipient during the same time period for a drug with the same:
(a) National Drug Code (NDC); or
(b) Drug or active ingredient name, strength,
and dosage form.
(4) A
timely claim payment shall be processed in accordance with
42 C.F.R.
447.45.
(a)
In accordance with
42 C.F.R.
447.45, a claim shall be submitted to the
department within twelve (12) months of the date of service.
(b) The department shall not reimburse for a
claim submitted to the department after twelve (12) months from the date of
service unless the claim is for a drug dispensed to an individual who was
retroactively determined to be eligible for Medicaid.
(c) The department shall not reimburse a
claim for a drug dispensed to an individual who was retroactively determined to
be eligible for Medicaid after 365 days have lapsed from the date that the
department issued the notice of retroactive eligibility.
(5) Reimbursement shall be denied if:
(a) The recipient is ineligible on the date
of service;
(b) The drug is
excluded from coverage in accordance with
907 KAR
23:010; or
(c) Prior authorization is required by the
department and the request for prior authorization has not been approved prior
to dispensing the drug, except in an emergency supply situation.
(6) Pursuant to
KRS
205.622, prior to billing the department, a
provider shall submit a bill to a third party payer if the provider has
knowledge that the third party payer may be liable for payment.
(a) If a provider is aware that a Medicaid
recipient has additional insurance or if a recipient indicates in any manner
that the recipient has additional insurance, the provider shall submit a bill
to the third party in accordance with
KRS
205.622.
(b) A provider who is aware that a recipient
may have other insurance, but the other insurance is not identified on the
medical assistance identification card or by the recipient, shall notify the
department's fiscal agent of the potential third-party liability.
(7) There shall be no copayment or
cost-sharing for an outpatient drug.
(8) If a payment is made for a drug that was
not administered or dispensed in accordance with
907 KAR
23:010 or the payment was not appropriately reimbursed
as required by this administrative regulation, the provider shall refund the
amount of the payment to the department or the department may, at its
discretion, recoup the amount of the payment.
(9) Adherence to the requirements established
in this section shall be monitored through an on-site audit, post payment
review of the claim, a computer audit, or an edit of the claim.
Section 2. Reimbursement
Methodology.
(1) Drug cost shall be determined
in the pharmacy program using drug pricing and coding information obtained from
nationally recognized comprehensive drug data files with pricing based on the
actual package size utilized.
(2)
Lowest of Logic. Except as provided in Section 4 of this administrative
regulation, covered outpatient drug cost shall be reimbursed at the lowest of
the:
(a) National Average Drug Acquisition
Cost or NADAC, plus the professional dispensing fee, as established in Section
3 of this administrative regulation;
(b) Wholesale acquisition cost or WAC, plus
the professional dispensing fee, as established in Section 3 of this
administrative regulation;
(c)
Federal upper limit or FUL, plus the professional dispensing fee, as
established in Section 3 of this administrative regulation;
(d) Maximum allowable cost or MAC, plus the
professional dispensing fee, as established in Section 3 of this administrative
regulation; or
(e) The provider's
usual and customary charge to the public, as identified by the claim
charge.
(3) A clotting
factor shall be reimbursed via the lowest of logic established in subsection
(2) of this section and shall include the Average Sales Price plus six (6)
percent, plus the professional dispensing fee, as established in Section 3 of
this administrative regulation.
(4)
Pursuant to KRS 205.5510 to 205.5520:
(a)
Reimbursement methodologies for the managed care population shall be subject to
the terms of the awarded contract to administer the single pharmacy benefits
manager or PBM for the managed care population.
(b) The single PBM for the managed care
population shall not discriminate against 340B contract pharmacies via any
reimbursement methodologies utilized.
Section 3. Professional Dispensing Fee.
(1) Effective April 1, 2017, the professional
dispensing fee for a covered outpatient drug prescribed by an authorized
prescriber and dispensed by a participating pharmacy provider in accordance
with
907 KAR
23:010, and pursuant to a valid prescription shall be
$10.64 per pharmacy provider per recipient per drug per month.
(2) The professional dispensing fee for a
compounded drug shall be $10.64 per pharmacy provider per recipient per drug
reimbursed up to three (3) times every thirteen (13) days.
(3)
(a) As
warranted by the applicable standard of care, the professional dispensing fee
for a qualifying drug that is dispensed for the treatment of a substance use
disorder shall be $10.64 per pharmacy provider per recipient per drug
reimbursed once every seven (7) days.
(b) Any additional dispenses after the first
dispensing shall be warranted by the applicable standard of care.
Section 4.
Reimbursement Limitations.
(1) Emergency
supply. Dispensing of an emergency supply of a drug shall be made outside of
the prescriber's normal business hours and as permitted in accordance with
907 KAR
23:010.
(2) Partial fill. If the dispensing of a drug
results in partial filling of the quantity prescribed, including an emergency
supply, reimbursement for the drug ingredient cost for the actual quantity
dispensed in the partial fill and the completion fill for the remainder of the
prescribed quantity shall:
(a) Utilize the
lowest of logic established by Section 2 of this administrative regulation;
and
(b) Include payment of only one
(1) professional dispensing fee, which shall be paid at the time of the
completion fill.
(3)
Maintenance drugs. The department shall not reimburse for a refill of a
maintenance drug prior to the end of the dispensing period established by
907 KAR
23:010 unless the department determines that it is in
the best interest of the recipient.
(4) For a nursing facility resident meeting
Medicaid nursing facility level of care criteria, and in accordance with
201 KAR
2:190 and
902
KAR 55:065, an unused drug paid for by Medicaid shall
be returned to the originating pharmacy and the department shall be credited
for the drug ingredient cost.
(5)
For a Medicaid recipient participating in a hospice program, payment for a drug
shall be in accordance with
907 KAR
1:340.
(6)
Physician administered drugs (PAD).
(a)
Federal rebate required. Only covered PAD products that are federally
rebateable pursuant to a manufacturer rebate agreement shall be
reimbursed.
(b) Non-340B purchased
PAD. Reimbursement for drug cost for a drug administered by a physician or the
physician's authorized agent in an office or outpatient clinic setting, not
purchased through the 340B Program, and submitted for reimbursement as a
medical benefit shall be reimbursed only for the drug cost by the lowest of
logic required by Section 2 of this administrative regulation, which shall
include the average sales price (ASP) plus six (6) percent. A professional
dispensing fee shall not be paid for PAD.
(c) 340B purchased PAD. For a drug purchased
through the 340B Program and administered by a physician or the physician's
authorized agent in an office or outpatient clinic setting, and submitted for
reimbursement as a medical benefit, the lowest of logic required by Section 2
of this administrative regulation shall include the 340B ceiling price. The
covered entity shall bill no more than the actual 340B acquisition cost. A
professional dispensing fee shall not be paid for PAD.
Section 5. 340B Pharmacy
Transactions for Fee-For-Service.
(1) A
pharmacy dispensing drugs purchased through the 340B Program pursuant to a 340B
eligible prescription from a covered entity shall bill the department no more
than the actual 340B acquisition cost, plus the professional dispensing
fee.
(2) For a 340B purchased drug
dispensed by a pharmacy, the lowest of logic shall include the 340B ceiling
price.
(3) A drug dispensed by a
340B contract pharmacy shall not be eligible as a 340B transaction and shall be
reimbursed in accordance with the lowest of logic as required by Section 2 of
this administrative regulation plus the professional dispensing fee.
Section 6. 340B Pharmacy
Transactions for Managed Care.
(1) A pharmacy
dispensing drugs purchased through the 340B Program pursuant to a 340B eligible
prescription from a covered entity shall bill the department and be reimbursed
pursuant to Section 2 of this administrative regulation.
(2) A 340B covered entity pharmacy shall
notify the department on its own behalf and on behalf of any contracted
pharmacy if it intends to use 340B drugs to fill prescriptions for qualified
pharmacy claims within the managed care Medicaid program.
(3)
(a) A
covered entity that intends to use 340B drugs to fill prescriptions for
qualified pharmacy claims shall submit a complete and accurate Kentucky
Medicaid 340B Participation Notice Form.
1. A
form shall be filed by the fifteenth (15th) of the last month of a quarter in
order to be effective for that quarter. A form that is submitted later than the
fifteenth (15th) of the last month of a quarter shall be effective for the
following quarter and until revoked.
2. The form shall be effective until revoked
pursuant to subsection (4) of this section.
(b) Any covered entity that no longer intends
to participate and use 340B drugs to fill prescriptions for qualified pharmacy
claims shall submit a complete an accurate Kentucky Medicaid 340B
Nonparticipation Notice Form.
(5) The following entities, as relevant,
shall review each previous quarter's eligible pharmacy claims:
(a) The covered entity, or the entity's
designated claims administrator; and
(b) The contract pharmacy, or the entity's
designated claims administrator.
Section 7. The maximum allowable cost, or
MAC, shall be determined by taking into account each drug's cost, rebate status
(non-rebateable or rebateable) in accordance with
42 U.S.C.
1396r-8(a), marketplace
status (obsolete, terminated, or regional availability), equivalency rating
(A-rated), and relative comparable pricing. Other factors considered shall
include clinical indications of drug substitution, utilization, and
availability in the marketplace.
(1) Drug
pricing resources used to compare estimated acquisition costs for
multiple-source drugs shall include comprehensive data files maintained by a
vendor under contract to the department, such as:
(a) NADAC as published by CMS;
(b) WAC, manufacturer's price list, or other
nationally recognized sources;
(c)
The Average Manufacturers Price for 5i Drugs as reported by CMS;
(d) ASP as published by CMS;
(e) Nationally recognized drug file vendors
approved for use at a federal level and that have been approved by the
department;
(f) Pharmacy providers;
or
(g) Wholesalers.
(2) The department shall maintain
a current listing of drugs and their corresponding MAC prices accessible
through the department's pharmacy Web page.
(3) The process for a pharmacy provider to
appeal a MAC price for a drug shall be as established in this subsection.
(a) The pharmacy provider shall email or fax
a completed Kentucky Medicaid MAC Price Research Request Form to Kentucky's
authorized agent in accordance with the instructions on the form.
(b) An appeal of a MAC price for a drug shall
be investigated and resolved within three (3) business days.
(c) If available, the provider shall be
supplied with the name of one (1) or more manufacturers who have a price
comparable to the MAC price.
(d)
The MAC price and effective date of that price shall be adjusted accordingly,
retroactive to the date of service for the claim in question, if:
1. It is determined that a manufacturer does
not exist in the price range referenced in paragraph (c) of this subsection;
or
2. The provider is able to
document that despite reasonable efforts to obtain access, he or she does not
have access to the one (1) or more manufacturers supplied to the
provider.
(e) If an
adjusted MAC price becomes effective, the provider shall be informed that the
claim may be rebilled for the price adjustment.
Section 8. Federal Approval and Federal
Financial Participation. The department's reimbursement for services pursuant
to this administrative regulation shall be contingent upon:
(1) Receipt of federal financial
participation for the reimbursement; and
(2) Centers for Medicare and Medicaid
Services' approval for the reimbursement.
Section 9. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Kentucky Medicaid MAC Price
Research Request Form", 2012;
(b)
"Kentucky Medicaid 340B Participation Notice Form", 2022; and
(c) "Kentucky Medicaid 340B Nonparticipation
Notice Form", 2022.
(2)
This material may be inspected, copied, or obtained, subject to applicable
copyright law, at:
(a) The Department for
Medicaid Services, 275 East Main Street, Frankfort, Kentucky, Monday through
Friday, 8:00 a.m. to 4:30 p.m.; or