Current through Register Vol. 56, No. 6, March 18, 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.
