BEFORE THE DEPARTMENT OF PUBLIC

  HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

 

In the matter of the amendment of ARM 37.86.105, 37.86.1101, 37.86.1102, 37.86.1105, and 37.86.1106 pertaining to changes to Montana Medicaid pharmacy reimbursement

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO: All Concerned Persons

 

          1. On May 12, 2016, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rules.

 

2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Public Health and Human Services no later than 5:00 p.m. on May 5, 2016, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.

 

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

          37.86.105 PHYSICIAN SERVICES, REIMBURSEMENT/GENERAL REQUIREMENTS AND MODIFIERS (1) through (3) remain the same.

          (4) Reimbursement to physicians for physician-administered drugs which are billed under HCPCS "J" and "Q" codes is made according to the department's fee schedule or the provider's usual and customary charge, whichever is lower. The department's fee schedule is updated at least annually based upon:

          (a) and (b) remain the same.

          (c) the estimated acquisition cost (EAC) Average Acquisition Cost (AAC) methodology as defined in ARM 37.86.1101 if there is an EAC; or

          (d) remains the same.

          (5) The maximum allowable cost limitation shall does not apply in those cases where the physician certifies in their own handwriting that in their medical judgment a specific brand name drug is medically necessary for a particular patient. Acceptable certification statements are "brand necessary" or "brand required"." A check-off box on a form or a rubber stamp is not acceptable.

          (6) through (11) remain the same.

 

AUTH: 53-6-101, 53-6-113, MCA

IMP: 53-6-101, 53-6-113, MCA

 

          37.86.1101 OUTPATIENT DRUGS, DEFINITIONS (1) remains the same.

          (2) "Average manufacturer price (AMP)" means, with respect to a covered outpatient drug of a manufacturer for a rebate period, the average price paid to the manufacturer for the drug in the United States by wholesalers for drugs distributed to the retail pharmacy class of trade. The AMP is determined without regard to customary prompt pay discounts extended to wholesalers.

          (3) "Best price" means with respect to a single source drug or innovator multiple source drug of a manufacturer (including the lowest price available to any entity for any such drug of a manufacturer that is sold under an approved new drug application) the lowest price available from the manufacturer during the rebate period to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity within the United States.

          (4) "Estimated acquisition cost (EAC)" means the calculation of the provider's estimated cost of a drug for which no federal maximum allowable cost (FMAC) or state maximum allowable cost (SMAC) price has been determined. The EAC is the department's best estimate of what price providers are generally paying in the state for a drug in the package size providers buy most frequently.  If actual wholesale cost is not available, the EAC is the lesser of:

          (a) eighty-five percent of average wholesale price (AWP); or

          (b) wholesale acquisition cost (WAC) plus 2%.

          (5) "Federal maximum allowable cost" (FMAC) means the per unit amount the department reimburses a provider for a prescription drug included in the federal upper limit program. FMAC is the federal upper limit the department will pay for multi-source drugs as published by the Centers for Medicare and Medicaid Services (CMS) at https://www.cms.gov/Reimbursement/05_FederalUpperLimits.asp.

          (6) "Legend drugs" means drugs that federal law prohibits dispensing without a prescription.

          (7) "Maintenance medications" means oral tablet or capsule drugs:

          (a) that have a low probability for dosage or therapy changes due to side effects;

          (b) are subject to serum drug concentration monitoring or therapeutic response of a course of prolonged therapy;

          (c) whose most common use is to treat a chronic disease state. Therapy with the drug is not considered curative or promoting of recover; and

          (d) the drug is administered continuously rather than intermittently.

          (8) "Multi-source" means a drug product sold under its generic name whose active ingredients are identical in chemical composition to one or more others sold under trademark that can be purchased from different manufacturers or distributors.

          (9) "State maximum allowable cost (SMAC)" means the per unit amount the department reimburses a provider for a prescription drug included in the state maximum allowable cost program. SMAC is the upper limit the department will pay for multi-source drugs.

          (10) "Outpatient drugs" means drugs which are obtained outside of a hospital.

          (11) "Active Pharmaceutical Ingredient" (API) means a nonrebatable bulk drug substance, which is defined in 21 CFR 207.3(a)(4)(2011) as any substance that is represented for use in a drug and that, when used in manufacturing, processing, or packaging of a drug, becomes an active ingredient of the drug product.

          (2) "Active pharmaceutical ingredient (API)" means a nonrebatable bulk drug substance, defined in 21 CFR 207.3(a)(4) (2011) as any substance that is represented for use in a drug and that, when used in manufacturing, processing, or packaging of a drug, becomes an active ingredient of the drug product.

          (3) "Allowed ingredient cost" means the "Average Acquisition Cost (AAC)" or "submitted ingredient cost," whichever is lower. If AAC is not available, drug reimbursement is determined at the lesser of "Wholesale Acquisition Cost (WAC)" or the "submitted ingredient cost."

          (4) "Average acquisition cost (AAC)" means the calculated average drug ingredient cost per drug determined by direct pharmacy survey, wholesale survey, and other relevant cost information.

          (5) "Average manufacturer price" means the price as defined at 42 CFR Part 447.504(a).

          (6) "Best price" means with respect to a single source drug or innovator multiple source drug of a manufacturer the lowest price available from the manufacturer during the rebate period to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity within the United States. Best price includes the lowest price available to any entity for any such drug of a manufacturer that is sold under an approved new drug application.

          (7) "Legend drugs" means drugs that federal law prohibits dispensing without a prescription.

          (8) "Maintenance medications" means oral tablet or capsule drugs that:

          (a) have a low probability for dosage or therapy changes due to side effects;

          (b) are subject to serum drug concentration monitoring or therapeutic response of a course of prolonged therapy;

          (c) the most common use is to treat a chronic disease state;

          (d) therapeutically are not considered curative or promoting of recovery; and

          (e) are administered continuously rather than intermittently.

          (9) "Multi-source" means a drug product sold under its generic name for which the active ingredients are identical in chemical composition to one or more other drugs sold under trademark that can be purchased from different manufacturers or distributors.

          (10) "Outpatient drugs" means drugs that are obtained outside of a hospital.

          (11) "Preferred drug list (PDL)" means selected drugs that have a significant clinical benefit over other agents in the same therapeutic class and also represent good value to the department based on total cost.

          (12)  "Submitted ingredient cost" means a pharmacy's actual ingredient cost. For drugs purchased under the 340B Drug Pricing Program, "submitted ingredient cost" means the actual 340B purchase price. For drugs purchased under the Federal Supply Schedule (FSS), "submitted ingredient cost" means the actual FSS purchase price.

          (13) "Usual and customary charge" means the price the provider charges a typical customer in the provider's typical course of business.

          (14) "Wholesale acquisition cost (WAC)" is the cost as defined in 42 USC 1395w-3a(c)(6)(B).

 

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

          37.86.1102 OUTPATIENT DRUGS, REQUIREMENTS (1) remains the same.

          (2) For purposes of Medicaid reimbursement, outpatient Ddrugs may not be filled or refilled without the authorization of the physician or other licensed practitioner who is authorized by law to prescribe drugs and is recognized by the Medicaid program.

          (3) The department will only participate in the payment of legend and over-the-counter drugs listed on the department drug formulary, as determined by the Medicaid Drug Formulary Committee established by the department. The formulary committee is the Drug Use Review Board, established and operating in accordance with 42 USC 1396r-8 (2011) (2016), which governs Medicaid drug programs. The drug formulary includes a preferred drug list. (PDL) of selected drugs that have a significant clinical benefit over other agents in the same therapeutic class and also represent good value to the department based on total cost. Prescribers must prescribe from the preferred drug list if medically appropriate.

          (a) remains the same.

          (4) The inappropriate use of drugs, as determined by professional review, may result in the imposition of a limitation upon the quantities of medications which are payable by the medical assistance program. Retroactive limitation will not be is not applied, unless the involved pharmacy has knowledge or can reasonably be expected to have had knowledge of the inappropriate use of drugs by the recipient member.

          (5) Each prescription shall must be dispensed in the quantity ordered except that:

          (a) Prescriptions for which a specific quantity has not been ordered shall must be dispensed in sufficient quantities to cover the period of time for which the condition is being treated except for injectable antibiotics, which may be dispensed in sufficient quantities to cover a three-day period.

          (b) Notwithstanding the above, maintenance medications may be dispensed in quantities sufficient for a 90-day supply or 100 units, whichever is greater. Other medications may not be dispensed in quantities greater than a 34-day supply. The department will post maintains a list of current drug classes which will be are considered maintenance medications and will be are posted on the department's web site at http://medicaidprovider.mt.gov.

          (6) The department will does not participate in the payment of a prescription drug:

          (a) remains the same.

          (b) that is not subject to a rebate agreement between the manufacturer and the secretary of HHS as required by 42 USC 1396r-8 (2011) (2016); and

          (c) that does not meet prior authorization criteria as determined by the Medicaid Drug Formulary Committee, established and operating in accordance with 42 USC 1396r-8 (2011) (2016), without the existence of a prior authorization request approved by the department or its designated representative. A list of drugs subject to prior authorization, known as the prior authorization drug list, will be provided to interested Medicaid providers.

          (7) remains the same.

          (8) The drug formulary, PDL, and the prior authorization drug list will be is updated by the department on a monthly basis, on the last day of each month. A copy of the most current listings may be obtained from the department web site at www.dphhs.mt.gov, or by writing to the Department of Public Health and Human Services, Health Resources Division, Allied Health Services Bureau, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

          (9) The department has a drug rebate program administered in accordance with 42 USC 1396r-8 (2011) (2016) and CMS drug program state releases, CMS drug manufacturer releases, and the National Drug Rebate Agreement in effect in 2008,. which the The department adopts and incorporates by reference the National Drug Rebate Agreement (2008). A copy of all documents incorporated by reference in this rule may be obtained from the department web site at www.dphhs.mt.gov, or by writing to the Department of Public Health and Human Services, Health Resources Division, Allied Health Services Bureau, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

          (a) Pharmaceutical manufacturers, hereafter referred to as the manufacturer, will must make rebate payments to the department for each calendar quarter within 30 days after receiving from the department the Medicaid utilization information defined in their federal rebate agreement. The manufacturer is responsible for timely payment of the rebate within 30 days of receiving, at a minimum, information on the number of units paid, by NDC number.

          (b) 42 USC 1396r-8 (2011) (2016) states establishes the requirements that must be met by the department, drug manufacturers, and providers in order for providers to receive reimbursement for outpatient drugs that have been dispensed. This statute describes rebate agreements, covered drugs, prior authorization, reimbursement limits, and drug use review programs.

          (10) A provider shall must maintain a signature log to act as proof of delivery of prescription drugs that the dispensed medication has been received by the member or an individual acting on behalf of the member. Each recipient The member, or an individual acting on behalf of the recipient member, must sign the log each time that they receive a prescription drug is delivered from a pharmacy provider. For prescription drugs delivered to a nursing facility, the individual charged with ensuring the security of pharmaceutical supplies may sign the log after verifying delivery of all prescription drugs.

          (11) The department will use uses the following procedures to develop the preferred drug list (PDL):

          (a) The department will performs a pharmacoeconomic analysis of the Medicaid Pharmacy Program and identify identifies therapeutic classes of drugs for possible PDL inclusion.

          (b) The department and the Drug Use Review (DUR) Board/Formulary Committee members will consider recommendations and determine which therapeutic drug classes will be reviewed at a meeting of the committee. Notice of the meeting and the therapeutic drug class to be considered will be is posted on the department's web site in advance of the meeting date.

          (c) The department will performs drug class reviews using peer-reviewed literature, established evidence-based practice methods, and local clinicians to interpret and apply practical experience to the structured evidence reviews. The department will also conducts supplemental rebate negotiations.

          (d) The committee will combines its members' evaluations and the evaluations from the department to consider equivalent products within the drug class. Information used by the department and its contractors will be is available to the public prior to the meeting. During the meeting, the committee will also hears comments from interested parties.

          (e) The committee will recommends to the department which preferred agents should be selected for the specific therapeutic class.

          (f) The department will makes a final decision and posts its decision on the department's web site.

 

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-113, 53-6-141, MCA

 

          37.86.1105 OUTPATIENT DRUGS, REIMBURSEMENT (1) Outpatient Ddrugs will be are paid for on the basis of the Montana "estimated acquisition cost", "the federal maximum allowable cost", or the "state maximum allowable cost", plus a dispensing fee established by the department, or the provider's "usual and customary charge", whichever is lower; except that the "federal maximum allowable cost", or the "state maximum allowable cost" limitation shall not apply in those cases where a physician or other licensed practitioner who is authorized by law to prescribe drugs and is recognized by the Medicaid program certifies in their own handwriting that in their medical judgment a specific brand name drug is medically necessary for a particular patient. An example of an acceptable certification would be the notation "brand necessary" or "brand required". A check-off box on a form or a rubber stamp is not acceptable. reimbursed at the lower of:

(a)  the provider's "usual and customary charge"; or

          (b)  the "allowed ingredient cost" plus a dispensing fee.

          (2) The dispensing fee for filling prescriptions will be is determined for each pharmacy provider annually.

          (a) The dispensing fee is based on the pharmacy's average cost of filling prescriptions. The average cost of filling a prescription will be is based on the direct and indirect costs that can be allocated to the cost of the prescription department and that of filling a prescription, as determined from the Montana Dispensing Fee Questionnaire. A provider's failure to submit, upon request, the dispensing fee questionnaire properly completed will results in the assignment of the minimum dispensing fee offered. A copy of the Montana Dispensing Fee Questionnaire is available upon request from the department.

          (b) The dispensing fees assigned will be are as provided in ARM 37.85.105(3).

          (c) If the individual provider's usual and customary average dispensing fee for filling prescription is less than the foregoing method of determining the dispensing fee, then the lesser dispensing fee will be is applied in the computation of the payment to the pharmacy provider.

          (3) In-state pharmacy providers that are new to the Montana Medicaid program will be are assigned the maximum dispensing fee in (2)(b) until a dispensing fee questionnaire, as provided in (2), can be completed for six months of operation. At that time, a new dispensing fee will be is assigned which will be is the lower of the dispensing fee calculated in accordance with (2) for the pharmacy or the maximum allowed dispensing fee provided in (2)(b). Failure to comply with the six months dispensing fee questionnaire requirement will results in assignment of a dispensing fee of $2.00.

          (4) The department will reimburses pharmacies for compounding drugs only if the client's member's drug therapy needs cannot be met by commercially available dosage strengths, forms of the therapy, or both.

          (a) Prescription claims for compound drugs will be are billed and reimbursed using the National Drug Code (NDC) number and quantity for each compensable ingredient in the compound.

          (b) remains the same.

          (c) Reimbursement for each drug component will be is determined in accordance with ARM 37.86.1101.

          (d) remains the same.

          (e) The department will reimburses pharmacies a compound-drug dispensing fee as provided in ARM 37.85.105(3) in lieu of the dispensing fee stated in (2). Prior authorization will be is required for reimbursement above the lowest compound dispensing fee.

          (f) remains the same.

          (g) The department will publishes guidelines for billing the different level of effort fees.

          (h) remains the same.

          (5) The department will reimburses pharmacies a vaccine administration fee as provided in ARM 37.85.105(3) in lieu of the dispensing fee stated in (2) for any covered vaccine as allowed by the Montana Pharmacy Practice Act, 37-7-101, MCA.

          (6) Reimbursement for outpatient drugs provided to Medicaid persons in state institutions will be is as follows:

          (a) and (b) remain the same.

          (7) Full-benefit dual eligible persons qualify for pharmaceutical drug coverage under Medicare Part D prescription drug plans (PDPs) on January 1, 2006 under 42 USC 1302, 1395w-101 through 1395w-152 (2011), the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). For purposes of the MMA and this rule, the term full-benefit dual eligible has the same meaning as stated in 42 CFR 423.772.

          (8) The MMA allows PDPs to exclude from coverage the drug classes listed in 42 USC 1396r-8(d)(2) (2011). Montana Medicaid may also exclude these drugs and has chosen to do so except for the prescription and nonprescription drugs identified on the department's drug formulary. On January 1, 2006, Montana Medicaid's reimbursement for outpatient drugs provided to full-benefit dual eligible persons, for whom third party payment is not available, will be is limited to the excluded drugs identified on the department's drug formulary.

          (9) The department will reimburses pharmacies a unit dose prescription fee as provided in ARM 37.85.105(3). The unit dose prescription fee will offsets the additional cost of packaging supplies and materials which are directly related to filling unit dose prescriptions by the individual pharmacy. This fee is in addition to the regular dispensing fee allowed. The unit dose prescription fee will not be is not paid for a unit dose prescription packaged by drug manufacturers. Unit dose prescriptions may not exceed the 34-day supply limit. Only one unit dose prescription fee is allowed each month for each prescribed medication.

          (10) Providers must bill Montana Medicaid the following:

          (a) their actual acquisition cost including providers who purchase drugs through the Federal Supply Schedule or providers who are participating in the 340B Drug Pricing Program; and

          (b) their "usual and customary charge" as defined in ARM 37.86.1101.

          (11) In accordance with the NCPDP 340B Information Exchange Reference Guide Version 1.0 (July 2011), a claim for Section 340B drugs must be identified through the use of a valid value 20 in the NCPDP Submission Clarification Code (420-DK) field. If a claim is identified as a 340B claim and the submitted ingredient cost is greater than the AAC, or WAC if no AAC is present, the claim will deny.

 

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-113, MCA

 

          37.86.1106  CALCULATION OF THE STATE MAXIMUM ALLOWABLE CHARGE, THE ESTIMATED ACQUISITION CHARGE, AND PROVIDER'S USUAL AND CUSTOMARY CHARGE AVERAGE ACQUISITION COST (1) The state maximum allowable cost (SMAC) Average Acquisition Cost (AAC) is the state average acquisition cost per drug determined by direct pharmacy survey, wholesale survey, and other relevant cost information.

          (a) The department will reviews SMAC AAC rates on an ongoing basis and adjusts the rates as necessary to reflect prevailing market conditions and ensure reasonable access by providers to drugs at or below the applicable SMAC AAC rate.

          (b) Pharmacies and providers that are enrolled in Montana Medicaid are required, as a condition of participation, to submit, upon request, to the department, or its designee, acquisition cost information, product availability information, and other information deemed relevant by the department for the efficient operation of the pharmacy benefit. Information will be is provided in the format requested by the department or its designee. Providers will are not be reimbursed for this information and will must submit information to the department or its designee within 30 days following a request for such information unless the department or its designee grants an extension upon written request of the pharmacy or provider.

          (2) The estimated acquisition cost (EAC) for a drug is:

          (a) the direct price charged by manufacturers to retailers;

          (b) a department set SMAC for specified drugs or drug categories when the department determines that acquisition cost is lower than (2)(a) or (c) based on national pricing data, or

          (c) the lesser of:

          (i) eighty-five percent of the average wholesale price (AWP) if there is no direct price available to providers in the state; or

          (ii) the wholesale acquisition cost (WAC) plus 2%.

          (3) The usual and customary charge is the price the provider charges a typical customer in the provider's typical course of business.

 

AUTH: 53-6-101, 53-6-113, MCA

IMP: 53-6-101, 53-6-113, MCA

 

          4. STATEMENT OF REASONABLE NECESSITY

 

The Department of Public Health and Human Services (department) is proposing amendments to ARM 37.85.105, found in MAR Notice No. 37-745, in conjunction with this rulemaking in order to increase the professional dispensing fees for Montana Medicaid pharmacy providers and to ARM 37.86.105, 37.86.1101, 37.86.1102, 37.86.1105, and 37.86.1106 in order to modify the calculation of drug reimbursement.

 

Montana Medicaid is proposing changes to outpatient drug ingredient reimbursement. This change will eliminate the estimated acquisition cost reimbursement methodology and sets drug ingredient reimbursement as close to actual acquisition as possible. Similar to the existing State Maximum Allowable Cost, the new methodology is referred to as Average Acquisition Cost (AAC). AAC is established based on drug invoice data, oftentimes coming directly from the wholesaler collected via acquisition cost surveys from Montana pharmacy providers. In conjunction with using AAC to set drug ingredient reimbursement, the professional dispensing fees for in-state Montana Medicaid pharmacy providers will be increased. This increase is shown in MAR Notice No. 37-745, but the fiscal impact will be included in this rule package as it directly correlates to the methodology change and is a CMS-required component of this change.

 

Montana Medicaid is adopting the AAC methodology in accordance with federal guidelines. On February 1, 2016, the Centers for Medicare and Medicaid Services (CMS) issued the final rule with comment period (CMS-2345-FC) regarding Medicaid covered outpatient drugs in the Federal Register. This rule revises requirements pertaining to Medicaid reimbursement for covered outpatient drugs to implement provision of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act). This change is a migration from "estimated acquisition cost" to "actual acquisition cost." In the rule CMS stated "we propose in section 447.518(c) to require all States to provide data to adequately support proposed changes in reimbursement using AAC. This supporting data could include, but is not limited to, a national survey, to create a database of actual acquisition costs that States may use as a basis for determining State-specific rates. Additionally, a State survey of retail pharmacy providers or other reliable data which reflects the pharmacy provider's price to acquire a drug could be used as a basis to support proposed changes in reimbursement. We believe that surveying pharmacy providers for acquisition costs or using other reliable data, based on actual sales transactions, as a base from which to develop an appropriate ingredient cost reimbursement is reasonable."

 

42 USC 256b(a)(5)(A)(i) prohibits duplicate discounts in association with the 340B drug pricing program. Therefore, state Medicaids are required to find methodologies to ensure that drug manufacturers are not invoiced for rebate for drugs dispensed under the 340B program.

 

Montana Medicaid is also proposing to require 340B pharmacy providers to disclose which prescriptions were dispensed as 340B. The disclosure, as indicated on a pharmacy claim, will assist the department in the appropriate invoicing of drug rebates. These providers will be required to submit claims that do not exceed their actual 340B purchase price. The department will configure the pharmacy claims processing system to deny 340B pharmacy claims if they are submitted with an ingredient cost that is greater than the AAC, or Wholesale Acquisition Cost (WAC) if no AAC is present.

 

This proposed rulemaking will also require all providers to submit their actual acquisition cost and usual and customary charge to Montana Medicaid, whether the drug was attained from the Federal Supply Schedule, is a 340B drug, or a drug not subject to any special reductions.

 

The department is proposing the following amendments in this rulemaking:

 

37.86.105, 37.86.1101, and 37.86.1106

 

The department is proposing to change the references to Estimated Acquisition Cost to Allowed Ingredient Cost within ARM 37.86.105, 37.86.1101, and 37.86.1106.

 

37.86.1101

 

The definitions for Federal Maximum Allowable Cost, State Maximum Allowable Cost will be removed from ARM 37.86.1101.  The department is adding definitions of Allowed Ingredient Cost, Average Acquisition Cost, Submitted Ingredient Cost, Wholesale Acquisition Cost, and Usual and Customary Charge to ARM 37.86.1101.  In addition, the department is revising the definition of Average Manufacturer Price.

 

37.86.1102

 

The reference to the provider signature log in ARM 37.86.1102 is modified to improve clarity.

 

37.86.1105

 

ARM 37.86.1105 incorporates the definitions from ARM 37.86.1101. This rule states that drugs are reimbursed at the lower of the provider's usual and customary charge or the allowed ingredient cost plus a professional dispensing fee. This rule is also revised to include requirements for pharmacy providers to identify through an indicator when a drug is dispensed as a 340B drug. In addition, these providers are required to bill Montana Medicaid the actual acquisition cost of the 340B product. Montana Medicaid will deny 340B claims that are submitted with an ingredient cost that is greater than the AAC, or WAC, if no AAC is present.

 

37.86.1106

 

The title of ARM 37.86.1106 will be modified to align with the reimbursement changes. This rule is being updated to explain the calculation of the Montana Average Acquisition Cost.

 

Fiscal Impact

 

This proposed rule amendment has an administrative cost of $139,583.31 in state fiscal year (SFY)2016 and $141,666.64 in SFY2017. In addition, the proposed changes will result in a projected cost savings of $4.3 million.

 

The proposed rulemaking is estimated to affect: 100,211 Medicaid members, 27,352 HELP members, 25,100 HMK members, 935 MHSP members, 420 pharmacies, 314 Inpatient Hospitals, 3 outpatient hospitals, 7,304 physicians, and 2,109 mid-level practitioners.

 

          5. The department intends to adopt these rule amendments effective July 1, 2016.

 

          6. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., May 20, 2016.

 

7. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.

 

8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.

 

9. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

11. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules will significantly and directly impact small businesses.

 

The group of small businesses that will be affected are pharmacies enrolled with Montana Medicaid that have fewer than 50 employees.

 

It is estimated that the affected small businesses would see a reduction on average of $2.56 per Montana Medicaid pharmacy claim.

 

Montana Medicaid weighed the alternative methodologies to satisfy 42 CFR Part 447. It was determined that using a Montana-based AAC would result in the least impact to small businesses.

 

12. Section 53-6-196, MCA, requires that the department, when adopting by rule proposed changes in the delivery of services funded with Medicaid monies, make a determination of whether the principal reasons and rationale for the rule can be assessed by performance-based measures and, if the requirement is applicable, the method of such measurement. The statute provides that the requirement is not applicable if the rule is for the implementation of rate increases or of federal law.

 

The department has determined that the proposed program changes presented in this notice are not appropriate for performance-based measurement and therefore are not subject to the performance-based measures requirement of 53-6-196, MCA because they are the result of rate changes necessitated by federal law.

 

 

/s/ Geralyn Driscoll for                           /s/ Richard H. Opper                  

Cary B. Lund                                         Richard H. Opper, Director

Rule Reviewer                                       Public Health and Human Services

 

 

Certified to the Secretary of State April 11, 2016.