The Centers for Medicare & Medicaid Services (CMS) issued a final rule on the Medicaid Drug Rebate Program on Sept. 20, implementing requirements of the Medicaid Services Investment and Accountability Act of 2019 (P.L. 116-16). The rule includes provisions defining a “covered outpatient drug” (COD) under the Medicaid statute, requiring Medicaid managed care organizations (MCOs) to identify managed care beneficiaries clearly on their insurance cards, and mandating transparency related to pharmacy benefit manager spread pricing.
Under the Medicaid statute, a drug is not classified as a COD (and therefore is not eligible for a rebate) if the drug is provided incidental to another service and is not directly reimbursed (e.g., drugs for which payment is bundled with payment for another service). In the final rule, the CMS adopted a definition clarifying the term “direct reimbursement” to include instances when reimbursement for the drug is provided as part of a single inclusive payment, but the claim separately identifies the drug charge and payment amount directly attributable to the drug. This change could expand the types of drugs subject to a Medicaid rebate, as well as a discount under the 340B Drug Pricing Program, which adopts the Medicaid COD definition.
The CMS also finalized a proposal to require the use of a bank identification number and a processor control number on an enrollee’s identification card so the beneficiary can be identified as covered under Medicaid when filling a prescription. The agency noted this could help with identification of managed care claims to exclude from Medicaid rebate claims for purposes of avoiding duplicate discounts on drugs that also benefited from a 340B discount.
The CMS did not finalize other proposals, including proposed definitions of “manufacturer” and “vaccine,” verifying drug prices through a manufacturer survey, or accounting for stacking in calculating best price.
- Washington Highlights