7 AAC 145.400 - Covered outpatient drug payment rates and home infusion therapy drug rates

(a) In addition to complying with the requirements of 7 AAC 105.220, and before submitting a claim for payment from the department, a pharmacy provider shall bill any third-party prescription drug plan in which the recipient is enrolled and that is in effect on the date of service. After the pharmacy provider receives notification from the third-party prescription drug plan of the amount, if any, that the third-party prescription drug plan will pay, the pharmacy provider may submit a claim for payment from the department for the remaining cost of service. The department will pay the pharmacy provider the lesser of the difference between the payment by the third-party prescription drug plan and the department-calculated allowable payment, minus any recipient cost-sharing amounts imposed under AS 47.07.042 by the department or the remaining patient liability amount, minus any recipient cost-sharing amounts imposed under AS 47.07.042 by the department. The department will consider the payment to be payment in full.

(b) For a prescription of a covered outpatient drug as described in 7 AAC 120.110(b), the department will pay the provider for reasonable and necessary postage or freight shipping, not to exceed $16, incurred in the delivery of the prescription from the dispensing pharmacy to the recipient if pharmacy services are not available in the recipient's community. If multiple prescriptions for covered outpatient drugs are shipped in a single package, the postage or freight shipping costs must be divided by the number of prescriptions for covered outpatient drugs shipped and the partial postage amount is to be billed on each prescription claim.

(c) The department may establish a state maximum allowable cost for a covered outpatient drug described in 7 AAC 120.110(b). The state maximum allowable cost will be established by reviewing pricing sources, including the wholesale acquisition cost, purchase invoices, or direct price for the covered outpatient drug as identified in the First Data Bank National Drug Data File (NDDF) Plus, taking into consideration the cost of the most frequently dispensed drugs.

(d) The department will maintain on its website, or on the website of the department's designated contractor, a current listing of covered outpatient drugs and their corresponding state maximum allowable costs.

(e) The payment for covered outpatient drugs described in 7 AAC 120.110(b) is the lowest of the following:

(1) the submitted covered outpatient drug cost plus the dispensing fee set under 7 AAC 145.410;

(2) the federal upper limit established by CMS plus the dispensing fee;

(3) the estimated acquisition cost of the covered outpatient drug plus the dispensing fee;

(4) the state maximum allowable cost plus the dispensing fee.

(f) The department will pay for a vaccine product at the rate established in 7 AAC 145.275(1).

(1) the submitted vaccine cost plus the submitted vaccine administration fee under 7 AAC 145.410;

(2) the state maximum allowable cost plus the vaccine administration fee;

(3) the federal upper limit established by CMS plus the submitted vaccine administration fee;

(4) the estimated acquisition cost plus the vaccine administration fee.

(g) The payment for brand names of multiple-source drugs that are covered outpatient drugs described in 7 AAC 120.110(b) and that the prescriber specifies in accordance with 42 C.F.R. 447.512, adopted by reference, is the lowest of the following:

(1) the submitted covered outpatient drug cost plus the dispensing fee set under 7 AAC 145.410;

(2) the estimated acquisition cost of the covered outpatient drug plus the dispensing fee.

(h) For a specific covered outpatient drug described in 7 AAC 120.110(b), a provider may not submit a charge to the department in excess of the amount applicable to that drug under 7 AAC 145.020 or the provider's usual and customary charge for the covered outpatient drug. The usual and customary charge is the lowest amount a provider charges to the general public and reflects all advertised savings, discounts, special promotions, or other programs. The department will pay the lesser of the calculated allowed amount under (e) - (o) of this section less any cost-sharing amount under 7 AAC 105.610, the charged amount submitted under 7 AAC 145.020 less any cost-sharing amount under 7 AAC 105.610, or the provider's usual and customary charge less any cost-sharing amount under 7 AAC 105.610.

(i) For a compounded prescription that contains one or more covered outpatient drugs described in 7 AAC 120.110(b), the department will pay the sum of the dispensing fee set under 7 AAC 145.410 and the cost of each covered outpatient drug, with the cost of each covered outpatient drug set at the lowest of the following:

(1) the submitted cost for that covered outpatient drug;

(2) the federal upper limit established by CMS for that covered outpatient drug;

(3) the state maximum allowable cost for that covered outpatient drug;

(4) the estimated acquisition cost for that covered outpatient drug.

(j) A provider that dispenses covered outpatient drugs described in 7 AAC 120.110(b) in unit doses to a recipient in a long-term care facility shall return unused covered outpatient drugs to the pharmacy, and the claim will be adjusted.

(k) For covered outpatient drugs described in 7 AAC 120.110(b) and used as home infusion therapy drugs for patients in a long-term care facility, the department will pay a provider the sum of the dispensing fee set under 7 AAC 145.410 and the cost of each covered outpatient drug, with the cost of each covered outpatient drug set at the lowest of the following:

(1) the submitted cost for that covered outpatient drug;

(2) the state maximum allowable cost for that covered outpatient drug;

(3) the federal upper limit established by CMS for that covered outpatient drug;

(4) the estimated acquisition cost for that covered outpatient drug.

(l) For covered outpatient drugs described in 7 AAC 120.110(b) and used as home infusion therapy drugs for patients outside a long-term care facility, the department will pay a provider the sum of the covered outpatient drug costs without a dispensing fee, with the cost of each covered outpatient drug set at the lowest of the following:

(1) the submitted cost for that covered outpatient drug;

(2) the state maximum allowable cost for that covered outpatient drug;

(3) the federal upper limit established by CMS for that covered outpatient drug;

(4) the estimated acquisition cost for that covered outpatient drug.

(m) If a facility is a covered entity as described in 42 U.S.C. 256 b (sec. 340B, Public Health Service Act) and indicates to the United States Department of Health and Human Services that it will use covered outpatient drugs purchased through the 340B drug pricing program under 42 U.S.C. 256 b and 42 C.F.R. Part 10 to bill Medicaid, the facility must notify the department and may not submit a charge to Medicaid for more than the actual acquisition cost of the covered outpatient drug and a dispensing fee calculated under 7 AAC 145.410. If a covered entity as described in 42 U.S.C. 256 b notifies the United States Department of Health and Human Services, Health Resources and Services Administration, Office of Pharmacy Affairs of any changes in the entity's enrollment or participation in the program, including that the entity's pharmacy is not included under 42 U.S.C. 256 b, that the entity's pharmacy is going to begin using covered outpatient drugs purchased through the 340B program to bill Medicaid, or that the pharmacy is no longer going to use covered outpatient drugs purchased through the 340B program to bill Medicaid, the entity shall also notify the department. For covered outpatient drugs from a facility indicating to the United States Department of Health and Human Services that it will use covered outpatient drugs purchased through the 340B drug pricing program to bill Medicaid, the department will pay the lesser of the following:

(1) the submitted actual acquisition covered outpatient drug cost plus the dispensing fee set under 7 AAC 145.410;

(2) the federal upper limit established by CMS plus the dispensing fee;

(3) the estimated acquisition cost plus the dispensing fee;

(4) the state maximum allowable cost plus the dispensing fee.

(n) For purposes of (m) of this section, actual acquisition covered outpatient drug cost is the unit cost that the facility pays for a drug, after subtracting all discounts. A facility may establish written protocols for establishing or calculating the facility's actual acquisition drug cost based on a monthly, quarterly, or other average of the facility's actual acquisition drug cost. A written protocol may not include an inflation, mark-up, spread, or margin to be added to the facility's actual purchase price after subtracting all discounts.

(o) If a facility purchases drugs through the Federal Supply Schedule of the United States General Services Administration or drug pricing program under 38 U.S.C. 8126, 42 U.S.C. 256 b, or 42 U.S.C. 1396r-8, other than through the 340B drug pricing program under 42 U.S.C. 256 b and 42 C.F.R. Part 10, the facility shall notify the department. The facility shall notify the department of any changes in participation in purchasing drugs through the Federal Supply Schedule or drug pricing program under 38 U.S.C. 8126, 42 U.S.C. 256 b, or 42 U.S.C. 1396r-8. For covered outpatient drugs from a facility purchasing drugs through the Federal Supply Schedule or drug pricing program under 38 U.S.C. 8126, 42 U.S.C. 256 b, or 42 U.S.C. 1396r-8 other than through the 340B drug pricing program, the department will pay the lesser of the following:

(1) the submitted covered outpatient drug cost plus the dispensing fee set under 7 AAC 145.410;

(2) the federal upper limit established by CMS plus the dispensing fee;

(3) the wholesale acquisition cost of the covered outpatient drug minus 15 percent plus the dispensing fee;

(4) the state maximum allowable cost plus the dispensing fee.

(p) In this section,

(1) "estimated acquisition cost" means the wholesale acquisition cost plus one percent;

(2) "home infusion therapy"

(A) means drugs that require the use of a laminar flow hood or clean room for the protection of either the product or preparing personnel;

(B) includes cancer chemotherapy drugs, intravenous antibiotics, and hyperalimentation drugs;

(3) "wholesale acquisition cost" means the manufacturer's list price for the drug to wholesalers or direct purchasers in the United States, not including prompt-payor other discounts, rebates, or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug pricing data.

Notes

7 AAC 145.400

Eff. 2/1/2010, Register 193; am 1/1/2011, Register 196; am 5/18/2014, Register 210, July 2014; am 1/10/2021, Register 237, April 2021

Authority:AS 47.05.010

AS 47.07.030

AS 47.07.040