Current through Register Vol. 56, No. 18, September 16, 2024
(a) Subject to the requirements of the annual
State appropriations act, this section provides a summary of the elements involved in the calculations of the
payment of legend or certain non-legend drugs. The elements include the following:
1. Program restrictions affecting reimbursement for the dispensing of drugs
as listed in 10:167A-1.6;
2.
Price information as supplied from a reference drug file subcontracted for this purpose by the fiscal agent
and accepted by the Division of Medical Assistance (Medicaid) as the primary source of pricing information
for the New Jersey Medicaid Management Information System (NJMMIS). The drug price shall not exceed the lower
of the average wholesale price minus 10 percent as supplied by the reference drug file contractors; the
provider's usual and customary charge; or the drug's maximum allowable cost, if applicable (see (b) below);
i. The NJMMIS reference drug file is updated periodically by the fiscal
agent based upon data supplied by First Data Bank (FDB). The update process provides the fiscal agent with
current data to include changes in product description. Providers are made aware of therapeutic indications
for various classes of drugs by product literature distributed by drug manufacturers and by various trade
publications. Based on market information, providers can determine whether a product's therapeutic
classification meet the criteria specified in
10:167A-1.14, Covered pharmaceutical services.
3. Federal regulations (
42
CFR 447.512 through 514) that set the aggregate upper limits on payment for
certain covered drugs in the pharmaceutical program. The New Jersey Medicaid program refers to these upper
limits as the "maximum allowable cost" (see (b) below); and
4.
Provider's usual and customary charge for legend drugs (see (c) below), insulin or insulin needles and
syringes.
(b) Payment for legend drugs is based upon
the maximum allowable cost. This means the lower of the upper payment limit price list (MAC price) as
published by the Federal government or the average wholesale price (AWP). See N.J.A.C. 10:51, Appendix B, for
the listing of MAC drugs.
1. Maximum allowable cost is defined as:
i. The MAC price for listed multi-source drugs published periodically by
the CMS of the United States Department of Health and Human Services; or
ii. For legend drugs not included in (b)1i above, the Estimated Acquisition
Cost (EAC), which is defined as the average wholesale price (AWP) listed for the package size (billed to the
New Jersey Medicaid program), in the current national price compendia or other appropriate sources (such as
the First Data Bank (FDB) reference drug file contractor), and their supplements, minus discount.
2. For information about the usual and customary charge, see
10:167A-1.13.
3. If
the published MAC price as defined in (b)1i above is higher than the maximum allowable cost which would be
paid as defined in (b)1ii above, then (b)1ii above shall apply.
(c) The maximum charge to the PAAD program for drugs, including the charge
for the cost of medication and the dispensing fee, shall not exceed the provider's usual and customary and/or
posted or advertised charge.
