Frequently Asked Questions

To the extent that a state is conducting a cost of dispensing survey, it should be a transparent, comprehensive, and well-designed tool that addresses a pharmacy provider's cost to dispense the drug product to a Medicaid beneficiary. States have the flexibility to set PDFs, including using national or regional data from another state and we do not require that a state use a specific standard or methodology such as a survey to do so.

Further, states are not required to use a specific formula or methodology such as a cost study or use an inflation update where cost studies are not conducted; however, the burden is on each state to ensure that pharmacy providers are reimbursed in accordance with the requirements in section 1902(a)(30)(A) of the Act. CMS will review each SPA submission against these standards (see 81 FR 5311).

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• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94681

The intent of the new reimbursement methodology requirements is not necessarily to result in a cost neutral outcome. The requirements are to more accurately reflect the pharmacy providers' actual prices paid to acquire drugs and the professional services required to fill a prescription. Each state's AAC reimbursement methodology and proposed professional dispensing fee will be reviewed through the SPA process to ensure they are meeting the requirements of this final rule.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94686

The NADAC files have weekly updates posted on Medicaid.gov that reflect any price changes that have occurred since the last posted monthly file. States using the NADAC for their AAC reimbursement methodology will have access to the weekly updates of the NADAC to ensure pharmacies are reimbursed with the most updated NADAC pricing.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94696

AAC reimbursement requirements for covered outpatient drugs extend to retail community pharmacy providers where drugs are covered by Medicaid under the state's covered outpatient drug pharmacy benefit and are not reimbursed as part of a service. Physician-administered drugs are not required to meet AAC reimbursement requirements.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94701

The FULs represent an aggregate upper limit, which gives states flexibility to determine payment rates for individual drugs in accordance with the approved state plan. For drugs that have a FUL calculated, a state can use the calculated FUL price for reimbursement, or they can use another metric, such as an AAC, for reimbursement, as long as that metric will allow the state to remain within the FUL aggregate. Generally, we can say with certainty that if a state uses the NADAC to reimburse for those drugs that have a FUL calculated, the state will not exceed the FUL aggregate. However, if a state wants to use another AAC metric for reimbursement (other than NADAC) for drugs that have a FUL calculated, the state must demonstrate that its AAC metric will allow them to remain within the FUL aggregate. CMS will allow the states four quarters from the effective date of the final rule with comment, which is April 1, 2016, to revise their state plan, if necessary, and submit a SPA with an effective date no later than April 1, 2017, to comply with requirements of 42 CFR 447.512(b).

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94711

As noted in the final rule with comment, we recognize that states may need to revise their state plans to accommodate the reimbursement provisions of the final rule and are allowing states four quarters from the effective date of the final rule to submit a SPA to comply with these provisions. However, states are required to implement pharmacy reimbursement limits, in the aggregate, in accordance with 42 CFR 447.512 and 447.514 as of the effective date of this final rule (81 FR 5310). CMS issued the first set of Affordable Care Act (ACA) FULs on March 29, 2016, and those FULs were effective on April 1, 2016.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94721

Not necessarily. In the case where a state is using the NADAC to meet the AAC reimbursement benchmark, for drugs that have a FUL calculated, states would generally not exceed the FUL aggregate. However, if a state uses another reimbursement benchmark to establish their AAC model of reimbursement, such as a state survey of retail prices, the state cannot assume that the FUL aggregate will not be exceeded.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94731

States are required to implement the limits set by the ACA FULs in their reimbursement methodologies as of the effective date of the final rule with comment, that is, April 1, 2016. The FULs are to be applied as an aggregate upper limit, so the states have flexibility to determine payment rates for individual drugs in accordance with the approved State plan, such that the total reimbursement for all drugs to which the FUL applies does not exceed the FUL in the aggregate. Many states have FULs as part of their ""lower of"" logic in their state plans already. While we recognize that many states will be using NADAC or their own AAC methodology, and many of these values will be below the FULs, we still ask that states include in their state plans, either as a part of their lower of methodology or in a separate entry or description in the state plan, how they intend to meet the FULs in the aggregate.

FAQ ID:94736

CMS will not publish a FUL price for a FUL product group where the agency does not have a corresponding NADAC to compare to the 175 percent of the weighted average of AMPs for the FUL product group. For further information please see the Methodology and Data Elements Guide on the Medicaid.gov website at on the Medicaid.gov website at https://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Benefits/Prescription-Drugs/Federal-Upper-Limits.html.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94741

States are required to apply the ACA FULs, in the aggregate, as of the effective date of the final rule with comment, that is, April 1, 2016. A SPA is not required to begin applying the ACA FULs in the aggregate.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)

FAQ ID:94746