Statutes, codes, and regulations
New Jersey Administrative Code
Title 10 - HUMAN SERVICESChapter 167A - PROVISION OF PHARMACEUTICAL SERVICES UNDER THE PHARMACEUTICAL ASSISTANCE TO THE AGED AND DISABLED PROGRAM (PAAD)
Subchapter 1 - REQUIREMENTS FOR PROVISION OF PHARMACEUTICAL SERVICES
Section 10:167A-1.21 - Prescription Drug Price and Quality Stabilization Act

N.J. Admin. Code § 10:167A-1.21

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Current through Register Vol. 57, No. 1, January 6, 2025
Section 10:167A-1.21 - Prescription Drug Price and Quality Stabilization Act
(a) The Prescription Drug Price and Quality Stabilization Act, N.J.S.A. 24:6E-1 et seq., shall apply to the PAAD program. This law requires that every prescription blank contain the statements "Substitution Permissible" and "Do Not Substitute." The prescriber shall initial one of the statements in addition to signing the prescription blank.
1. When the prescriber does not initial "Substitution Permissible" or the "Do Not Substitute" statement on a prescription for a drug product, the pharmacist shall substitute from the list of interchangeable products and bill PAAD accordingly.
2. When the prescriber initials "Substitution Permissible," the pharmacist shall dispense and bill PAAD for one of the less expensive products listed as an interchangeable drug product with the brand name prescribed.
3. When the prescriber orders by generic name, the pharmacist shall dispense the least expensive, therapeutically effective product available to him or her at the time of dispensing. The product is not required to be from the list of interchangeable products.
4. Whenever the prescriber does not specify that substitution is not permitted and an interchangeable drug product is available for the prescription written, the PAAD program shall reimburse the pharmacy only for the maximum allowable cost of the interchangeable product, less the PAAD program co-payment.
i. For non-MAC drugs (see N.J.A.C. 10:167A-1.7), when the prescriber initials "Do Not Substitute," the pharmacist shall indicate the prescriber's preference by indicating "Medical Certification" in the EMC claim format and shall dispense and bill PAAD for the prescribed product. Reimbursement will be in accordance with N.J.A.C. 10:167A-1.7 (see N.J.A.C. 10:51, Appendix D, incorporated herein by reference, Fiscal Agent Billing Supplement for instructions about the claim form or N.J.A.C. 10:51, Appendix E, incorporated herein by reference, regarding the proper EMC claim format); or
ii. For MAC drugs and in those situations in which a prescriber authorizes, in accordance with (b) below, the dispensing of a brand drug, the pharmacist shall indicate the prescriber's preference by indicating "Medical Certification" in the EMC claim format and shall dispense and bill PAAD for the prescribed product. Reimbursement will be in accordance with N.J.A.C. 10:167A-1.7 (see N.J.A.C. 10:51, Appendix D, incorporated herein by reference, Fiscal Agent Billing Supplement for instructions about the claim form or N.J.A.C. 10:51, Appendix E, incorporated herein by reference, regarding the proper EMC claim format).
(b) Federal regulations at 42 CFR 447.512 prescribe the aggregate upper limit, or maximum allowable cost (MAC) for certain legend drugs, which are applied to Medicaid-covered pharmacy services (see (d) below). For claims with service dates on or after July 15, 1996, these limits shall apply to all MAC drugs (see N.J.A.C. 10:51, Appendix B, incorporated herein by reference) covered by PAAD unless the prescriber indicates in his or her own handwriting on each written prescription or follow-up written prescription to a telephone-rendered prescription (see N.J.A.C. 10:167A-1.7) the phrase "Brand Medically Necessary." The Federal regulation at 42 CFR 447.512 requires a written statement and does not permit the use of alternatives, such as a check-off box initials or prescriber's signature, next to a preprinted statement "Do Not Substitute," nor does it allow a handwritten statement "Do Not Substitute." For purposes of reimbursement, the physician's override capability under N.J.S.A. 24:6E-1 does not apply to drugs, which have a Federal MAC limit.
(c) A blanket authorization denying substitutions shall not be permitted. Each prescription order shall state "Brand Medically Necessary" in the prescriber's own handwriting. For non-MAC drugs, each prescription order shall follow the requirements of N.J.S.A. 24:6E-1 et seq. (see (a) above).
(d) The dispenser must always report the actual labeler code and drug product code of the drug dispensed. The package size code reported may differ from the stock package size used to fill the prescription.

N.J. Admin. Code § 10:167A-1.21

Amended by R.1996 d.146, effective 3/18/1996 (operative April 1, 1996).
See: 27 N.J.R. 4566(a), 28 N.J.R. 1526(a).
Amended by R.1997 d.252, effective 6/16/1997.
See: 28 N.J.R. 2481(a), 28 N.J.R. 3221(a), 29 N.J.R. 2678(a).
Amended by R.1998 d.464, effective 9/8/1998.
See: 30 N.J.R. 2197(a), 30 N.J.R. 3309(a).
Recodified from N.J.A.C. 8:83C-1.19 and amended by R.2003 d. 248, effective 6/16/2003.
See: 34 N.J.R. 3456(a), 35 N.J.R. 2642(a).
Amended N.J.A.C. reference in (a)5, 6, (b). Former N.J.A.C. 8:83C-1.21, Bundled drug service, recodified to N.J.A.C. 8:83C-1.23.
Amended by R.2009 d.293, effective 10/5/2009.
See: 41 N.J.R. 1637(a), 41 N.J.R. 3804(a).
Amended by 49 N.J.R. 446(a), effective 3/6/2017