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
Both the State Medicaid Director Letter describing the Substance Use Disorder (SUD) section 1115 demonstration opportunity and the Centers for Medicare & Medicaid Services (CMS) SUD Implementation Plan template, reference needs assessment tools and program standards established by the American Society for Addiction Medicine (ASAM). Is a state required to reference or rely on the ASAM Criteria in implementing an SUD section 1115 demonstration?
No, a state is not required to reference or rely on the ASAM Criteria however, states should use guidelines/patient placement tools that are comparable to ASAM criteria. The State Medicaid Director Letter describing the SUD section 1115 demonstration opportunity references the ASAM Criteria as a recognized standard and an example of a patient placement assessment tool that states could use. Participating states are expected to ensure that providers use an SUD-specific, multi-dimensional assessment tool in determining the types of treatments and level of care a beneficiary with an SUD may need. The ASAM Criteria is referenced as a representative example of such an assessment tool.
Some states proposed alternative needs assessment tools. CMS reviews each alternative proposal on an individual basis, and CMS has so far determined that those alternatives are comparable to the ASAM Criteria and meet the expectations for this demonstration initiative. In addition, participating states are expected to implement provider qualifications for residential treatment providers that reflect well-established standards for these treatment settings. Again, the ASAM Criteria is referenced as an example of a resource that states may use for determining those standards.
FAQ ID:93681
SHARE URLPlease 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 URLOur state uses multiple cost centers (routine and ancillary) in the calculation of our inpatient hospital Upper Payment Limit (UPL). Do the templates permit the use of multiple cost centers?
Yes, the templates allow the use of multiple cost centers. For example, if the state uses a cost methodology for ancillary services and a per-diem methodology for routine services, the state will complete one cost template and one per-diem template in order to account for these two cost centers. Every hospital would be featured in each of the two templates; however, to differentiate their provider information, the state would append the Medicare Certification Number (Medicare ID) (variable 112) with a letter, such as an -A or a -B. For example, if the Medicare ID was 123456, it would be depicted in the cost template as 123456-A and in the per diem template as 123456-B. If a Medicare Certification Number is not available then the state should append the Medicaid Provider Number. If there are multiple cost centers under either the cost or per-diem methodology, the state would separate out the cost centers within their respective templates. Each cost center should be associated with only one appended letter and these should be described in the notes tab. When using multiple cost centers, the state should insert a new tab in the templates that summarizes the UPL gap calculations for each of the ownership categories (state government owned, non-state government owned, and private), unless a summary worksheet is already included in the workbook.
FAQ ID:92261
SHARE URLOur state uses multiple cost centers with varying cost-to-charge ratios in our calculation of the inpatient hospital Upper Payment Limit (UPL). Does the template accommodate this?
Yes, the template allows the use of multiple cost centers with multiple cost-to-charge ratios. The state would separately report the costs and payments associated with each of the cost centers in the cost template. To differentiate the cost centers, the state would append the Medicare Certification Number (Medicare ID) (variable 112) with a letter, for example an -A, -B, or -C, that would be used as a unique identifier for each cost center.
FAQ ID:92266
SHARE URLOur state uses multiple methodologies for the three ownership categories in the calculation of our inpatient hospital Upper Payment Limit (UPL). Do the templates permit the use of multiple methodologies?
Yes, the templates allow the use of multiple methodologies. The state would complete the templates associated with the UPL methodologies used. For example, if the state uses a cost-based methodology for state owned hospitals and a payment-based methodology for private hospitals, then the state would complete the cost template for the state owned hospitals and the payment template for the private hospitals. When using multiple methodologies, the state should insert a new tab in the templates that summarizes the UPL gap calculations for each of the ownership categories (state government owned, non-state government owned, and private), unless a summary worksheet is already included in the workbook.
FAQ ID:92271
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
SHARE URLWill CMS be providing guidance to states to ensure that states include reasonable components in their cost of dispensing survey?
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).
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94681
SHARE URLAfter a state evaluates changing reimbursement to actual acquisition cost plus an increased PDF and the state determines that the total cost of their pharmacy reimbursement will be increased compared to current costs, will CMS allow an adjustment in the PDF that would result in a cost neutral outcome?
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.
Supplemental Links:
- This FAQ was released as part of a larger set. View the full set. (PDF, 205.53 KB)
FAQ ID:94686
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