Pharmacy Reimbursement Methodology Changes

On January 11, 2016, the Centers for Medicare & Medicaid Services (CMS) notified the Division of Medical Assistance (DMA) that our State Plan Amendment (SPA 14-047) had been reviewed and consistent with 42 CFR 430.20 was approved effective January 1, 2016.

The approved SPA proposes that the state will use an average acquisition cost (AAC) reimbursement methodology to reimburse brand and generic drug ingredient costs. The National Average Drug Acquisition Cost (NADAC) will be used to determine the AAC when NADAC is available. If NADAC pricing is not available, the state will calculate the AAC as the Wholesale Acquisition Cost (WAC) + 0%. Reimbursement methodology will continue to include the lesser of NADAC, or WAC in absence of NADAC, and the State Maximum Allowable Cost (SMAC) rate on file.

 

The amendment also proposed that the state pay pharmacies a tiered dispensing fee as follows:

  • $13.00 when 85% or more claims per quarter are for generic or preferred brand drugs,
  • $7.88 when less than 85% of claims per quarter are for generic or preferred brand drugs, and
  • $3.98 for non-preferred brand drugs

A NADAC FAQ has been posted on the DMA website.

These changes are being implemented in NCTracks on August 1, 2016. Pharmacy claims paid between January 1 and July 31, 2016, will be reversed and rebilled according to the updated reimbursement methodology. A further announcement will be posted when the date for the claim reprocessing has been finalized.

Until then, pharmacies will continue to be paid according to the current reimbursement methodology. Pharmacies are advised that this may result in an overpayment once the reverse and rebilling process is completed. Any difference will be recouped against future payments.