Current through Register Vol. 56, No. 24, December 18, 2024
(a) This section provides a summary of the
elements involved in the calculation of the payment of a legend or non-legend
drug for both the Medicaid and NJ FamilyCare programs. The elements include the
following:
1. Program restrictions affecting
reimbursement for the dispensing of drugs as listed in
N.J.A.C. 10:51-1.4;
2. Price information as supplied from a
reference drug file contracted for this purpose by the fiscal agent and
accepted by the Division as the primary source of pricing information for the
New Jersey Medicaid Management Information System (NJMMIS). The drug price or
ingredient cost shall not exceed the lower of the average wholesale price as
supplied by the reference drug file contractor; 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
N.J.A.C. 10:51-1.11 (Covered Pharmaceutical
Services).
3. Federal
regulations (42 CFR Part 447, Subpart I) that set the aggregate upper limits on
payment for certain covered drugs in the Medicaid and NJ FamilyCare-Plan A
pharmaceutical program. The Division applies the limits to NJ FamilyCare-Plans
B and C. The Division refers to these upper limits as the "maximum allowable
cost" (see (b) below); and
4. The
provider's usual and customary charge for legend or non-legend drugs (see (c)
below), contraceptive diaphragms and legend or non-legend devices.
(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 Appendix B for the listing of MAC drugs,
which is incorporated herein by reference.
1.
Maximum allowable cost is defined as:
i. The
MAC price for listed multi-source drugs published periodically by the Centers
for Medicare and Medicaid Services (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 or NJ FamilyCare 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 usual and
customary charge, see N.J.A.C. 10:51-1.10.
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 New Jersey Medicaid or NJ FamilyCare 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) The maximum allowance
for protein replacement supplements, specialized infant formulas, and food oils
under the Medicaid and NJ FamilyCare program is the lesser of:
1. The product's AWP plus 50 percent;
or
2. The usual over-the-counter
(OTC) retail price charged to the other persons in the community.
(e) For claims with service dates
on or after July 15, 1996, the maximum allowance for non-legend drugs
(including protein replacement supplements, specialized infant formulas and
food oils), devices, or supplies under the New Jersey Medicaid or NJ FamilyCare
program shall be calculated in accordance with (b)1ii above.
1. The product AWP less a volume discount
(see N.J.A.C. 10:51-1.6) plus dispensing fee
(see N.J.A.C. 10:51-1.7); or
2. The usual over-the-counter (OTC) retail
price charged to the other persons in the community.
(f) For claims with service dates on or after
July 15, 1996, 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 Average Wholesale Price (AWP) of a drug, as defined in (b)1ii
above, less a discount of 10 percent.
