Current through Register Vol. 56, No. 18, September 16, 2024
(a) This section provides a summary of the
elements involved in the calculation 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 10:167C-1.4;
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). If reimbursement for a drug is not
covered under the Medicare Prescription Drug Program, the drug price shall not exceed the lower of the
reimbursement standard set forth in the Fiscal Year 2007 Appropriations Act,
P.L. 2006, c.
45, as amended and supplemented by subsequent State appropriations acts, 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 meets the criteria specified in
10:167C-1.12, Covered pharmaceutical services;
3. Federal regulations ( 42 CFR 447.301, 331 - 333) that set the
aggregate upper limits on payment for certain covered drugs in the 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, insulin needles and syringes, or diabetic testing materials.
(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, incorporated herein by reference, for the
listing of MAC drugs.
1. Maximum allowable cost is defined as:
i. The MAC price as stated for listed multi-source drugs published
periodically by CMS and in accordance with the Deficit Reduction Act of 2005,
Pub. L. 109-171, effective
February 8, 2006; 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 current national price compendia or other
appropriate sources (such as the First Data Bank (FDB) reference drug file contractor), and their
supplements, minus regression category or discount.
2.
For information about the "pharmacy discounts," see
10:167C-1.6 and for usual and customary charge, see
10:167C-1.11.
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 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.
(d) For claims with service dates on
or after July 1, 2005, that are not covered by the Medicare Prescription Drug Program, the maximum cost for
each eligible prescription claim not covered by the maximum allowable cost price, as defined in (b)1i above,
shall be based on the pharmacy reimbursement standards defined in the Fiscal Year 2007 Appropriations Act,
P.L. 2006, c.
45, as amended and supplemented by subsequent State appropriations acts, and for
multi-source drugs, shall be in accordance with the Deficit Reduction Act of 2005,
Pub. L. 109-171, effective
February 8, 2006.
