N.J. Admin. Code § 10:51-2.5

Current through Register Vol. 56, No. 11, June 3, 2024

Section 10:51-2.5 - Basis of payment

(a) This section provides a summary of the elements involved in the calculation of the payment of a legend drug. The elements include the following:

1. Program restrictions affecting reimbursement for the dispensing of drugs as listed in 10:51-2.4;

2. Price information as supplied from a reference drug file subcontracted 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 10:51-2.10 (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 pharmaceutical program. 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 drugs (see (c) below), contraceptive diaphragms and legend devices.

(b) Payment for legend drugs, contraceptive diaphragms, and reimbursable legend devices, 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.

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 discounts, see 10:51-2.6.

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) For claims with service dates on or after the July 15, 1996, the maximum cost for each eligible prescription claim not covered by the Maximum Allowable Cost price, as defined in 10:51-2.5(b)1 i is based on the average wholesale price (AWP) of a drug, as defined in (b)1ii above, less a discount of 10 percent.

(d) The maximum charge to the New Jersey Medicaid program for pharmaceutical services provided in a nursing facility, including the drug cost and related capitation fee, shall be equal to the lower of:

1. MAC/EAC plus capitation fee, as described in 10:51-2.7; or

2. A provider's usual and customary charge for long-term care pharmacy services which is defined as the charge for legend drugs, including drug costs and related pharmaceutical services provided to non-Medicaid residents in the same facility, based on terms within the same contractual agreement with the facility.

(e) Providers of pharmaceutical services in nursing facilities are required, upon request by the Division of Medical Assistance and Health Services (DMAHS) or its authorized agent, to provide documentation supporting their usual and customary charges, including any relevant contracts and/or agreements related to similar services.

N.J. Admin. Code § 10:51-2.5

Amended by 48 N.J.R. 2785(a), effective 12/19/2016