New Medicaid dispensing fee model proposed - we need your input!
Last week, the Ohio Department of Medicaid (ODM) released their long-awaited proposal for a revamped reimbursement model for pharmacies. The proposed rule changes will impact reimbursement for covered drugs and durable medical equipment (DME) within the Medicaid fee-for-service program. These are major, substantive changes, each with their own layers of potential issues for pharmacies, so we ask that you please review, and give us your feedback as soon as possible.
The Department plans to file the rules on January 13, 2017, and the initial comment period is open until December 23, 2016. While we will have additional opportunities to provide comment, we highly recommend submitting your comments by December 23. To submit comments on draft rules please send an email to BIA@Medicaid.Ohio.gov and CSIPublicComments@governor.ohio.gov. Comments on draft rules are public record, please do not submit any protected health information.
Also, as OPA plans to submit comments from the association as a whole, it is important that if you have issues you would like to call our attention to, we would need your feedback by Wednesday, December 21. Please send that feedback to email@example.com. We realize that this a very quick turnaround, but we're operating on the state's timeline; not ours.
To review the rule package and the reimbursement changes, click here.
Here are some initial items for you to note:
- Under the direction of CMS, all state Medicaid programs are shifting reimbursement models and recognizing a professional dispensing fee (PDF) for pharmacies. This model is an improvement over the current model, which is less objective and does not reflect a pharmacist's true cost to offer their services. Structurally speaking, OPA feels this shift should be a positive one. With this shift, pharmacies should see drug product reimbursement shrink, but for PDFs to increase.
- On the drug product side, for non-compounded drugs, pharmacies shall receive the lesser of the National Average Drug Acquisition Cost (NADAC), Wholesale Acquisition Cost (WAC), or the state's Maximum Allowable Cost (MAC).
- On the professional dispensing fee (PDF) side, ODM is proposing moving to a tiered system of reimbursements based upon pharmacy size. Through the Cost of Dispensing Survey, ODM found that in general, higher volume pharmacies had an overall lower cost to dispense than smaller pharmacies, so the intent of this model would be to have reimbursements more closely align with true costs to operate.
- The reimbursement rates would be as follows:
- For pharmacies that dispense fewer than 50,000 prescriptions per year: a PDF of $13.64
- For pharmacies that dispense between 50,000 prescriptions and 74,999 prescriptions per year: a PDF of $10.80
- For pharmacies that dispense between 75,000 prescriptions and 99,999 prescriptions per year: a PDF of $9.51
- For pharmacies that dispense more than 100,000 prescriptions per year: a PDF of $8.30
- But there's a catch... In 2013, OPA was successful in removing language from the Ohio Budget that would have allowed ODM to penalize pharmacies for failing to complete the Cost of Dispensing Survey. Despite the legislature rejecting ODM's authority to reduce dispensing fees to pharmacies for not completing the survey, the proposed rules would give pharmacies a PDF of $1.80 if they did not complete this year's survey. While the law does require pharmacies to complete the survey, penalties for doing so have not been approved by the legislature, nor were they proposed or even stated in advance of the survey being distributed. OPA disagrees with this proposal, and we are asking affected pharmacies to let us know if you will be impacted by this change.
- For new pharmacies in Ohio, PDFs would start at $13.64.
- There are also changes to compounding reimbursement:
- For claims for dispensing total parenteral nutrition (TPN): a PDF of $15/days supply, up to $150 for the claim. Please review the proposed rule for complete details and qualifiers.
- For dispensing sterile compounds, other than TPN: a PDF of $10/days supply, up to $70 for the claim. Please review the proposed rule for complete details and qualifiers.
- Compounded drugs that are not eligible for TPN or sterile compounding PDFs will receive the standard PDF rates listed above for traditional prescription drugs.
- For any drug purchased under the 340B program, the ingredient cost is the 340B ceiling price.
- For specialty drugs, the ingredient cost shall be the payment limit shown in the current Medicare Part B drug pricing file. If the drug is not listed that file, then the ingredient cost shall be the NADAC. If the drug is not listed in either, the ingredient cost shall be the WAC.
- Today, refills requested before 75% of the days supply has been utilized are generally denied by ODM. Under the proposed rules, it would change to 80% for non-DEA-scheduled drugs and 90% for DEA-scheduled drugs.
- Pharmacies can receive an administration fee for vaccines, that under these rules will be $19.35 in most instances.
Please keep in mind; there is more to the rule package than what is listed above, so it is important that if your practice may be impacted by changes in the Ohio Department of Medicaid's fee-for-service program (at this time, these changes do will not impact Medicaid Managed Care Organizations), it is important that you and your team review these proposed rule changes. We need your feedback by Wednesday if you would like OPA to know about your issues in advance of us submitting written comments. Send to firstname.lastname@example.org. We also highly recommend submitting your own comments independently by Friday, December 23. To submit comments on draft rules please send an email to BIA@Medicaid.Ohio.gov and CSIPublicComments@governor.ohio.gov. Comments on draft rules are public record, please do not submit any protected health information.
As OPA has informed you leading up to this point, this is the follow-up to the ODM survey of Ohio pharmacies for the cost of dispensing medications to Ohio Medicaid beneficiaries. The Centers for Medicare & Medicaid Services (CMS) published the federal Covered Outpatient Drugs Final Rule (CMS-2345-FC) on January 21, 2016. To comply with the Final Rule, ODM contracted with Mercer Government Human Services Consulting (Mercer), a part of Mercer Health & Benefits LLC, to conduct a professional dispensing fee (PDF) survey to better understand and approximate the current cost of dispensing prescription medications to Ohio Medicaid beneficiaries. That survey and its analysis are what ODM is using to gain an overall understanding and evaluation of its pharmacy reimbursement components and the impact to the cost of dispensing prescription medications in Ohio.
The ODM collaborated with Mercer to develop the PDF survey for pharmacy providers in Ohio. As a reminder, participation in the survey was mandatory in accordance with the provisions in the Ohio Revised Code (ORC) 5164.752.
The results of that survey have been published and can be accessed here. ODM and Mercer explained the results of that survey at a webinar earlier this month that OPA participated in. That webinar can be viewed here.
NOTE: These rules will be basis for pharmacy reimbursement moving forward. ODM plans to have the new fee schedule up and running for pharmacies by April 1, 2017, which is partly why they are moving so quickly on this. It is important that OPA and the Ohio Department of Medicaid get your feedback ASAP.
Please consider financial support of our legislative efforts by contributing to the OPA Pharmacy PAC. 100% of Pharmacy PAC money contributed by pharmacists goes to help candidates who support pharmacy in Ohio. Or if you'd like to make a corporate contribution to support OPA's investment in our advocacy program, please consider being a part of the OPA Legislative Defense Fund (LDF).