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Frequently Asked Questions

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.

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Do states need to track people enrolled in the adult group who become pregnant? If a woman indicates on the application she is pregnant, do states need to enroll her as a pregnant woman if she is otherwise eligible for the adult group? Would there be a need to track pregnancy if the benefits for both groups are the same?

If a woman indicates on an initial application that she is pregnant, she should be enrolled in Medicaid coverage as a pregnant woman, rather than in the new adult group. However, as stated in the preamble to the March 23, 2012 Medicaid and CHIP Eligibility & Enrollment final rule , states are not required to track the pregnancy status of women already enrolled through the new adult group. Women should be informed of the benefits afforded to pregnant women under the state's Medicaid program and if a woman becomes pregnant and requests a change in coverage category, the state must make the change if she is eligible.

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FAQ ID:92151

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If a woman moves from the adult group under 1902(a)(10)(A)(i)(VIII) to the pregnant woman group, are states then required to move former pregnant women from the pregnant women eligibility group back to the adult group when the post-partum period ends?

If a woman is enrolled in a group for pregnant women, before the end of the post-partum period, as specified in the definition of "pregnant woman" at 42 CFR 435.4, the state Medicaid agency will need to re-evaluate the woman's eligibility for other groups, including the lowincome adult group and advance payment of premium tax credits through the Marketplace. Our regulations at 42 CFR 435.916 explain the requirements for states in connection with renewals of eligibility or determinations of ineligibility based on a change in circumstances. The procedures outlined in the regulation are intended to promote continuity of coverage.

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FAQ ID:92161

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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

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One 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

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Can the Outpatient Hospital (OPH) Services Upper Payment Limit (UPL) demonstration consider Clinical Diagnostic Laboratory (CDL) services?

Section 1903(i)(7) of the Social Security Act specifies a separate UPL for CDL services which limits payment to no more than the Medicare rate on a per test basis. To meet the statutory provision, the UPL for CDL services must be separately demonstrated from the OPH services UPL. States do not have the ability to "borrow room" from the CDL UPL and apply it to the OPH UPL.

FAQ ID:92401

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How is the Psychiatric Residential Treatment Facility (PRTF) Upper Payment Limit (UPL) different from other institutional UPLs?

Unlike the UPLs for other Medicaid institutional payments, which rely on an aggregate approach by ownership category (private, state owned, non state government owned) to ensure Medicaid payments are consistent with efficiency and economy, the PRTF UPL is calculated for each facility. Specifically, the UPL relies on 42 CFR 447.325 which states that Medicaid agencies “may pay the customary charges of the provider but must not pay more than the prevailing charges in the locality for comparable services under comparable circumstances." The plain language meaning of this requirement is that a state may pay a PRTF no more than it charges for covered Medicaid services provided to Medicaid recipients.

FAQ ID:92416

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Is the state required to report in the Psychiatric Residential Treatment Facility (PRTF) Upper Payment Limit (UPL) template the number of service days for Medicaid beneficiaries?

Yes, the state is required to report the number of Medicaid days. This information is recorded at variable 310 – Medicaid days.

FAQ ID:92421

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If 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

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with the requirements of section 1902(a)(30)(A) of the Act, which specify that provider reimbursement rates should be consistent with efficiency, economy, and quality of care while assuring sufficient beneficiary access.

FAQ ID:94691

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If 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)).

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FAQ ID:94671

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Will 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.

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FAQ ID:94676

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