DAR File No. 28357

Health, Health Care Financing, Coverage and Reimbursement Policy

R414-60

Medicaid Policy for Pharmacy Copayment Procedures

NOTICE OF PROPOSED RULE

DAR File No.: 28357
Filed: 11/15/2005, 05:49
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this filing is to consolidate the current Medicaid pharmacy rules, amend coverage provisions, and allow for provisions that enact Medicare Part D.

Summary of the rule or change:

The new rule contains provisions not contained in the old rule. For example, it contains client eligibility requirements, provisions for drug coverage under Medicare-Part D, program access requirements for pharmacy services, and service coverage criteria for drugs from manufacturers, optional drugs, and generic drugs. It also contains limitations in drug coverage that are not found in the old rule. There are no substantive provisions contained in the old rule that are eliminated in the new rule. However, the new rule incorporates from Rule R414-63 (Repealed) a seven prescription per month limitation and incorporates by reference from Rule R414-63, provisions for reimbursement. (DAR NOTE: The proposed repeal of Rule R414-63 is under DAR No. 28356 in this issue.)

State statutory or constitutional authorization for this rule:

Sections 26-15 and 26-18-3, and the Social Security Act 1935(a)

Anticipated cost or savings to:

the state budget:

There is an estimated cost to the state budget of approximately $4,800,000 as a result of this rulemaking.

local governments:

There is no cost to local governments as a result of this rulemaking because local governments are not funded through Medicare Part D.

other persons:

There is no additional cost to pharmacies. However, dual eligibles will have additional copayment requirements as there is no monthly copayment cap in Part D.

Compliance costs for affected persons:

Dual eligibles will have additional copayment requirements as there is no monthly copayment cap in Part D.

Comments by the department head on the fiscal impact the rule may have on businesses:

No costs are anticipated for business as a result of this rule. David N. Sundwall, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/03/2006

This rule may become effective on:

01/04/2006

Authorized by:

David N. Sundwall, Executive Director

RULE TEXT

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-60. Medicaid Policy for Pharmacy Copayment Procedures.

[R414-60-1. Introduction and Authority.

This rule establishes Medicaid copayment policy for pharmacy services for Medicaid clients who are not in any of the federal categories exempted from copayment requirements. The rule is authorized by 42 CFR 447.15 and 447.50, Oct. 1995 ed., which are adopted and incorporated by reference.

R414-60-2. Definitions.

In addition to the definitions in R414-1, the following definitions also apply to this rule:

(1) "Child" means any person under the age of 18.

(2) "HMO Enrollees" means individuals enrolled with any Health Maintenance Organization (HMO).

(3) "Institutionalized individual" means one who is an inpatient in a health care facility such as a hospital or nursing facility.

R414-60-3. Copayment Policy.

(1) The Department shall impose a copayment in the amount of $3 for each prescription filled when a non-exempt Medicaid client, as designated on his Medicaid card, receives the prescribed medication. The Department shall limit the out-of-pocket expense of the Medicaid client to $15 per month.

(2) The Department shall deduct $3 from the reimbursement paid to the provider for each prescription, up to the maximum amount of $15 per month for each client.

(3) The provider should collect the copayment amount from the Medicaid client for those prescriptions that require a copayment. The provider may deny service for any client who refuses to make the copayment when the client's medical card indicates copayment is required.

(4) Medicaid clients in the following categories are exempt from copayment requirements:

(a) children;

(b) pregnant women;

(c) institutionalized individuals;

(d) HMO enrollees for whom pharmacy services are included in the HMO benefit package;

(e) individuals whose total gross income, before exclusions or deductions, is below the Temporary Assistance to Needy Families (TANF) standard payment allowance. These individuals must indicate their income status to their eligibility case worker on a monthly basis to maintain their exemption from the copayment requirements.

(5) Pharmaceuticals prescribed for family planning purposes are exempt from the copayment requirements.]

R414-60-1. Introduction and Authority.

(1) The Utah Medicaid Pharmacy program reimburses for, covered, prescribed outpatient drugs dispensed to eligible medicaid clients.

(2) This rule is authorized by 42 CFR 447.331, 42 CFR 447.15 and .50, the Utah Pharmacy Practice Act 58-17a-605, Utah health Code 26-18-105, and House Bill 268.

R414-60-2. Client Eligibility Requirements.

(1) Prescribed drugs are covered for Medicaid eligible, categorically and medically needy individuals.

(2) Effective January 1, 2006, outpatient drugs covered under Medicare Prescription Drug Benefit-Part D for full-benefit dual eligible beneficiaries who are defined as individuals who have Medicare and Medicaid benefits, will not be covered under Medicaid in accordance with SSA 1935(a).

(3) Drugs excluded under Medicare-Part D are not covered by Medicaid for dual eligible recipients. Certain limited drugs provided, in accordance with SSA, Section 1927(d)(2), to all Medicaid recipients, and not covered under the Medicare Prescription Drug Benefit-Part D, are payable by Medicaid. These drugs are limited as described in the Pharmacy Provider Manual and include some, but not all (a) agents when used for cough and cold, (b) over-the-counter drugs, and all ( c) barbiturates, (d) benzodiazepines.

R414-60-3. Program Access Requirements.

Pharmacy services must be prescribed by a Utah licensed health care provider lawfully permitted to issue the prescription. The pharmacy filling the prescription must be enrolled as a Utah Medicaid provider. The clients receiving the pharmacy services may be living at home, a Long Term Care (LTC) facility, an Extended Care or Skilled facility or a community based group home.

R414-60-4. Program Coverage.

(1) All drugs are covered from manufacturers who have signed rebate agreements with Health Care Financing beginning with the SSA Title XIX and the Obra Law of 1990.

(2) The optional drugs allowed in SSA 1927 (d)(2) are covered as follows, some, but not all (a) agents when used for cough and cold, (b) over-the-counter drugs, and all ( c) barbiturates, (d) benzodiazepines.

(3) In accordance with Utah Law 58-17b-606 (4), when a multisource A-rated legend drug is available in the generic form, reimbursement for the generic form of the drug will be made unless the treating physician demonstrates a medical necessity for dispensing the nongeneric, brand-name legend drug.

R414-60-5. Limitations.

(1) Cumulative amounts for 30 day periods may apply to some drug categories.

(2) Limitations may be placed upon drugs the same as imposed by manufacturers and the Food and Drug Administration (FDA).

(3) Duplication of drugs within therapeutic categories is limited.

(4) Step therapy, requiring documentation of therapeutic failure with one drug before reimbursement for another drug in the same category may be used.

(5) Pharmacy reimbursement for some drugs is regulated by prior approval as described in the provider manual.

(6) Some drugs may be supplied through contracted specialty pharmacies.

(7) Medicaid may use the criteria developed by academics and professionally recognized experts to determine product utilization in order to achieve reasonable outcomes for client improvement, elimination of pain, and/or recovery.

(8) Drug Efficacy Study Implementation Project Drugs (DESI Drugs) as determined by the FDA to be less-than-effective are not a benefit.

(9) Other drugs and/or categories of drugs as determined by the Utah State Division of Health Care Financing and listed in the Pharmacy Provider Manual are not a benefit.

(10) The Drug Utilization Review Board (DUR) recommends appropriate drug use for covered drugs. The DUR reviews and approves Medicaid drug use criteria and policy. The board makes determinations on specific cases and requests for therapeutic drug use.

(11) Clients whose prescriptions exceed seven prescriptions per month are subject to a clinical review by the Division.

(12) Drugs provided to clients during inpatient hospital stays are not a benefit and are included in the DRG payment.

R414-60-6. Co-payment Policy.

(1) The Department shall impose a co-payment in the amount of $3 for each prescription filled when a non-co-payment exempt Medicaid client, as designated on his Medicaid card, receives the prescribed medication.

(2) The Department shall deduct $3 from the reimbursement paid to the provider for each prescription, up to a maximum amount of $15 per month for each client.

(3) It is the providers responsibility to collect the copayment amount from the Medicaid client for those prescriptions that require a copayment.

(4) Co-payments do not apply to recipients and services excluded from cost sharing requirements in 42 CFR 447.53 (b).

R414-60-7. Reimbursement.

Pharmaceuticals are reimbursed using the fee schedule as established in the Utah Medicaid State Plan and incorporated by reference in R414-1-5(2).

KEY: Medicaid

[2003]2006

Notice of Continuation June 26, 2002

26-18-3

26-1-5

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For questions regarding the content or application of this rule, please contact Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.