Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
Please clarify that state flexibility to reimburse in the aggregate extends to reimbursement rates for I/T/U pharmacies and FSS drugs, and that states can establish rates that are based on a variety of data sources, which may include FSS prices, national and State price surveys, AMP data, and other price benchmarks.
The new AAC requirements were designed to more accurately reflect the pharmacy providers' actual prices paid to acquire drugs and the professional services required to fill a prescription. We agree that each state is able to establish rates that satisfy (or are consistent with) AAC and may be based on a variety of data sources, which may include FSS prices, and other pricing benchmarks.
FAQ ID:95111
SHARE URLThe Inpatient Hospital Services (IPH), Outpatient Hospital Services (OPH), and Nursing Facility (NF) templates do not include fields to sum the Upper Payment Limit (UPL) gap by ownership category (private, Non-State Governmental Organization (NSGO), State Government Ownded (SGO). How should these totals be presented in the template?
The total UPL gap by ownership category can be shown by inserting a new tab in the file with these calculations, unless a summary worksheet is already included in the workbook. If there are any questions about how to add this tab, please reach out to your CMS Regional Office or send a follow-up question (with your template) to the UPL mailbox and additional guidance will be provided.
FAQ ID:92281
SHARE URLOne of the required fields in the Nursing Facility template is the Medicare Provider Number (Medicare Certification Number - Variable 112), but not all facilities are Medicare certified. How should data be entered for these facilities since it is a required field?
When a Medicare provider number is not available, such as for some nursing facilities, the state should populate variable 112 using the acronym NMC, which stands for "Not Medicare Certified". Adding this information will help to clearly identify the facility's status.
FAQ ID:92286
SHARE URLBased on CMS guidance, states may take up to 18 months to bring an IV&V contractor on board to perform certification tasks or align current IV&V contract to comply with CMS guidance pertaining to scope of services and financial independence. What must the state do if the IV&V contractor's start up is delayed?
IV&V contractor activities must still be performed such as checklist evaluation, artifact review and preparation of IV&V Progress Reports. The state should provide a plan and timeline for how these activities will be supported and performed until the proper IV&V contract can be either procured or aligned with updated CMS guidance on IV&V.
FAQ ID:94866
SHARE URLIs IV&V required during operations and maintenance (O&M) for MMIS?
As contained in the MECT standard RFP/contract language required by CMS, CMS does not cover activities that the state may require of the IV&V contractor during ongoing O&M. However, as Medicaid is moving away from monolithic single applications, it is expected that states will continuously update and replace modules in their enterprise. Therefore, IV&V should always have a role to ensure successful integration and testing.
FAQ ID:94881
SHARE URLWhat would preclude a company from being eligible to bid on the MMIS or E&E IV&V contract(s)?
If an organization is performing another role (such as systems integrator, PMO, quality assurance, etc.) on the MMIS or E&E project, it may not perform the IV&V function on the same project. A state may contract the same vendor to perform the IV&V role for both its E&E and MMIS projects.
FAQ ID:94886
SHARE URLWhy does the IV&V contractor need to sit outside the Medicaid agency?
To reduce potential conflict of interest, CMS is ensuring that states are arranging IV&V services through contracts that should be owned outside of the agency that owns the MMIS or E&E project. The oversight organization for the IV&V contractor should not be involved in oversight of the development effort, a stakeholder in the business implementation, or the DDI contractor. The IV&V contract monitor should be aware of system development problem solving, reporting, and contractor management. This contract oversight provides true independence between the IV&V contractor and system development teams. This requirement is consistent with other HHS agencies' practices and industry best practices.
FAQ ID:94891
SHARE URLIf a state can prove that they are under the aggregate limits of AAC and PDF and have strong participation by pharmacies, are they required to adopt the AAC and PDF reimbursement methodology at the individual claim level?
All states are required to adopt the AAC and professional dispensing fee methodology; however, it is not required to be adopted at the individual claim level, but in the aggregate. In accordance with the regulatory requirements at 42 CFR 447.512(b), the state is responsible for establishing a payment methodology, that must not exceed, in the aggregate, payment levels that the agency has determined by applying the lower of the AAC plus a professional dispensing fee or the providers' usual and customary charges to the general public. In conjunction with this the state is also responsible to ensure that pharmacy reimbursement is consistent
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94691
SHARE URLIf a state is already using actual acquisition cost (AAC) as their reimbursement methodology, does the state need to file a State Plan Amendment (SPA) or provide assurances that the current formula meets requirements established in the final rule? Is there a requirement for such states to file a SPA to provide assurance that the state's current dispensing fee amount meets the requirements of the final rule?
If a state is already making payment for prescription drugs under its state plan based on AAC, it may continue to use that methodology. However, if a state decides to change its AAC model of reimbursement, (e.g., the state decides to use the National Average Drug Acquisition Cost (NADAC) instead of a state survey to implement a payment methodology based on AAC), the state must submit a new SPA through the formal SPA process for review.
Additionally, the state should review its currently approved professional dispensing fee (PDF) to determine if, in light of the regulation (42 CFR 447.518), the PDF needs to be revised and a SPA needs to be submitted. The state does not have to submit a new SPA to provide assurance that its dispensing fee is reasonable.
Furthermore, we expect that all states, even those currently operating under an AAC reimbursement methodology, will evaluate their current state plans to determine if a SPA will be required to comply with the reimbursement requirements (including, but not limited to, AAC, PDF, 340B and the federal upper limits (FULs)).
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94671
SHARE URLWill there be an annual review of PDFs that are required as part of SPA approvals?
No, CMS will not perform an annual review of PDFs; however, states must consider both the ingredient cost reimbursement and the PDF reimbursement when proposing changes to ensure that total reimbursement to the pharmacy provider is calculated in accordance with requirements of section 1902(a)(30)(A) of the Act.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94676
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