N.J. Admin. Code § 10:51-1.20 - Prescription Drug Price and Quality Stabilization Act

(a) The Prescription Drug Price and Quality Stabilization Act, N.J.S.A. 24:6E-1 et seq., shall apply to the New Jersey Medicaid and NJ FamilyCare programs. This law requires that every prescription blank contain the statements "Substitution Permissible" and "Do Not Substitute." The prescriber shall initial one of the statements in addition to signing the prescription blank.

1. When the prescriber does not initial "Substitution Permissible" or the "Do Not Substitute" statement on a prescription for a drug product listed in the DURC Formulary, the pharmacist shall substitute from the list of interchangeable products and bill Medicaid or NJ FamilyCare accordingly.

2. When the prescriber initials "Substitution Permissible," the pharmacist shall dispense and bill Medicaid or NJ FamilyCare for one of the less expensive products listed in the DURC Formulary as interchangeable with the brand name prescribed. The Medicaid or NJ FamilyCare beneficiary must accept the interchangeable product unless the beneficiary is willing to pay the pharmacy's full, usual and customary price. If that occurs, the pharmacist shall so note on the prescription blank and no claim shall be submitted to Medicaid or NJ FamilyCare.

3. For non-MAC drugs (see N.J.A.C. 10:51-1.5) when the prescriber initials "Do Not Substitute," the pharmacist shall indicate the prescriber's preference by indicating "Medical Certification" on the claim form or the similar field in the EMC claim format and shall dispense and bill Medicaid or NJ FamilyCare for the prescribed product. Reimbursement will be the estimated acquisition cost (EAC) (see N.J.A.C. 10:51-1.5) plus applicable dispensing fee or the usual and customary charge, whichever is less for that product (see Appendix D, Fiscal Agent Billing Supplement for instructions about the claim form and Appendix E regarding the proper EMC claim format.)

4. When the prescriber orders by the generic name, N.J.A.C. 8:71 (see N.J.A.C. 10:51-1.4) does not apply. The pharmacist shall dispense the least expensive, therapeutically effective product available to him or her at the time of dispensing. The product need not necessarily be from the list of interchangeable products.

(b) Federal regulations prescribe the aggregate upper limit, for which Federal Financial Participation (FFP) is available, that Medicaid or NJ FamilyCare-Plan A may reimburse for certain multi-source drugs. The limit shall apply to all listed MAC drugs (see Appendix B) unless the prescriber indicates in his or her own handwriting on each written prescription or follow-up written prescription to a telephone rendered prescription (see N.J.A.C. 10:51-1.9) the phrase "Brand Medically Necessary." The Federal regulation requires a handwritten statement and does not permit the use of alternatives such as a check-off box, initials or prescriber's signature, next to a preprinted statement "Do Not Substitute," nor does it allow a hand written statement "Do Not Substitute." For purposes of reimbursement, the physician's override capability under N.J.S.A. 24:6E-1 does not apply to drugs which have a Federal MAC limit. The Division shall also apply these Federal requirements to NJ FamilyCare-Plans B and C.

(c) Blanket authorization denying substitutions shall not be permitted. Each prescription order shall state "Brand Medically Necessary" in the prescriber's own handwriting. For non-MAC drugs, each prescription order shall follow the requirements of N.J.S.A. 24:6E-1 et seq. (see (a) above).

(d) For claims with service dates on or after July 1, 1999, the pharmacist shall dispense the least expensive, therapeutically effective nutritional supplement or specialized infant formula, at the time of dispensing, unless the prescriber indicates in his or her own handwriting on each written prescription or follow-up written prescription to a telephone rendered prescription the phrase "Brand Medically Necessary."

(e) The dispenser must always report the actual labeler code and drug product code of the drug dispensed. The package size code reported may differ from the stock package size used to fill the prescription.

(f) The "Brand Medically Necessary" requirement for MAC prescriptions shall not apply for Medicaid or NJ FamilyCare beneficiaries enrolled in a Medicaid or NJ FamilyCare participating Health Maintenance Organization (HMO).

Notes

N.J. Admin. Code § 10:51-1.20

Amended by R.1996 d.146, effective 3/18/1996 (operative April 1, 1996).
See: 27 New Jersey Register 4566(a), 28 New Jersey Register 1526(a).
Recodified from N.J.A.C. 10:51-1.19 by R.1998 d.154, effective 2/27/1998 (operative March 1, 1998; to expire August 31, 1998).
See: 30 New Jersey Register 1060(a).
Former N.J.A.C. 10:51-1.20, Drug Efficacy Study Implementation (DESI), recodified to N.J.A.C. 10:51-1.21.
Adopted concurrent proposal, R.1998 d.487, effective 8/28/1998.
See: 30 New Jersey Register 1060(a), 30 New Jersey Register 3519(a).
Readopted the provisions of R.1998 d.154 without change.
Amended by R.1998 d.488, effective 9/21/1998.
See: 30 New Jersey Register 2169(b), 30 New Jersey Register 3538(a).
In (a), inserted references to NJ KidCare throughout; in (b), inserted a reference to NJ KidCare-Plan A in the first sentence, and added the last sentence; and added (e).
Amended by R.2001 d.124, effective 4/16/2001.
See: 32 New Jersey Register 4392(a), 33 New Jersey Register 1201(a).
Added new (d) and recodified former (d) and (e) as (e) and (f).
Amended by R.2004 d.26, effective 1/20/2004.
See: 35 New Jersey Register 3788(a), 36 New Jersey Register 558(a).
In (a)4, amended N.J.A.C. reference; and substituted "NJ FamilyCare" for "NJ KidCare" throughout.