Title 7 . Health and Social Services

Chapter 43 . Hearings

Section 591. Drug reimbursement

7 AAC 43.591. Drug reimbursement

(a) In addition to complying with the requirements of 7 AAC 43.015, and before seeking reimbursement from Medicaid, 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 seek reimbursement from Medicaid for the remaining cost of service. The department will reimburse the pharmacy provider 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. The department will consider the reimbursement to be payment in full. The department will provide an exemption to a limit established under 7 AAC 43.594 for a therapeutic drug class, if the third-party prescription drug plan has a different limit for the therapeutic drug class.

(b) The department will reimburse the provider for reasonable and necessary postage or freight costs incurred in the delivery of the prescription from the dispensing pharmacy to the recipient.

(c) The payment for multiple source drugs for which the United States Health Care Financing Administration has established a specific upper limit amount in accordance with 42 C.F.R. 447.332, as amended July 31, 1987, is the lesser of the amount billed or that upper limit, plus the dispensing fee calculated under (g) of this section.

(d) The payment for drugs other than those described in (c) and ( l ) of this section, and for brand names of multiple-source drugs specified by the prescriber in accordance with 42 C.F.R. 447.331, as amended July 31, 1987, is the dispensing fee calculated under (g) of this section plus the estimated acquisition cost of that drug. The estimated acquisition cost is the average wholesale price accepted monthly by the department from the American Druggist Blue Book, less five percent of that amount. However, the provider may not charge the department in excess of the amount applicable to a specific drug under 7 AAC 43.040 plus the dispensing fee calculated under (g) of this section. If a facility is a covered entity and receives its drugs as described in 42 U.S.C. 256b, the facility may not charge Medicaid more than its actual acquisition cost, a freight charge of five percent, and a dispensing fee calculated under (g) of this section.

(e) Repealed 4/28/2005.

(f) The payment for compounding prescriptions is the sum of the costs of each of the ingredients as limited under (c) or (d) of this section, plus the dispensing fee calculated under (g) of this section, plus an additional compounding rate of $5.75 for each 15 minutes or portion of 15 minutes which is reasonably required to compound the prescription.

(g) The department will establish the dispensing fee based on the result of surveys of the costs of dispensing prescriptions for pharmacies in the state. Except as otherwise provided in this section, for each pharmacy the dispensing fee will be determined using the following formula: (1) $23,192 is added to the number that results from multiplying the total number of all prescriptions filled by that pharmacy in the previous calendar year by 5.070; (2) to the number arrived at under (1) of this subsection is added the result of multiplying the total number of Medicaid prescriptions filled by that pharmacy in the previous calendar year by 12.44; (3) from the number arrived at under (2) of this subsection is subtracted the result of multiplying the total floor space volume of that pharmacy, expressed in square feet, by 2.103; (4) the number arrived at under (3) of this subsection is then divided by the total number of all prescriptions filled by that pharmacy in the previous calendar year; (5) $0.73 is then added to the number arrived at under (4) of this subsection. However, the department will not pay less than $3.45 as a dispensing fee, nor more than the 90th percentile of all dispensing fees determined under the formula. A newly established pharmacy that does not have the information available to establish a fee will be assigned the statewide average fee until that pharmacy can provide 12 months of prescription data to the department.

(h) Upon request by the department, a pharmacy shall produce business records and related information relevant to the cost of drugs and the cost of dispensing. If a pharmacy does not provide dispensing fee data as requested by the department, the department may either pay that pharmacy the minimum dispensing fee established in (g) of this section or sanction the pharmacy as provided under 7 AAC 43.950 - 7 AAC 43.980.

(i) Notwithstanding the provisions of (b) - (h) of this section, payment will be made to a dispensing provider for the estimated acquisition cost of a drug. A dispensing fee will not be included, except that a dispensing provider located over 45 miles from a retail pharmacy that is not a covered entity under 42 U.S.C. 256b may receive a dispensing fee of $5.73.

(j) Payment to a provider of drugs who is located in a state other than Alaska will be made at the medicaid rate of that provider's state. For a Canadian provider of drugs, payment will be the lesser of the normal charge to the typical walk-in, cash-paying customer or the lowest total payment made for the same drug to a provider of drugs in Alaska.

(k) A provider dispensing drugs in unit doses to a recipient who is a resident in a nursing home or other long-term care facility will receive the highest dispensing fee paid in Alaska under (g) of this section for each unit dose prescription, refill, or dosage change. For purposes of this subsection, "unit dose" means a quantity of a drug which the provider re-packages into single dosage packing.

( l ) A provider preparing and dispensing pharmaceuticals that are commonly described as high technology drugs will be reimbursed the estimated acquisition cost of the drug as established under (d) of this section, plus the highest dispensing fee paid in Alaska under (g) of this section, plus a preparation fee of $10 for each 15 minutes or portion of 15 minutes reasonably required to prepare these drugs in a sterile or protective environment. For purposes of this subsection, "high technology drugs" means drugs that require the use of a laminar flow hood for the protection of either the product or preparing personnel, and include cancer chemotherapy drugs, intravenous antibiotics, and hyperalimentation drugs.

(m) Repealed 4/28/2005.

History: Eff. 2/1/89, Register 109; am 6/14/89, Register 110; readopt 8/7/96, Register 139; am 6/26/98, Register 146; am 5/5/99, Register 150; am 3/3/2001, Register 157; am 4/28/2005, Register 174

Authority: AS 47.05.010

AS 47.07.030

AS 47.07.050

Editor's note: The American Druggist Blue Book is available for inspection at the office of the Department of Health and Social Services, Division of Health Care Services, 4501 Business Park Boulevard, Suite 24, Anchorage, Alaska 99503-7167.

Effective 8/7/96, Register 139, the Department of Health and Social Services readopted 7 AAC 43.591 in its entirety, without change, under AS 47.05 and AS 47.07. Executive Order No. 72 transferred certain rate-setting authority to the department.