Louisiana Regulatory Report

Louisiana

Category:

Reimbursement Rates

Title:

 Medicaid Pharmacy Program - Average Wholesale Price

Agency:

Department of Health and Hospitals

Summary:

   The Department of Health and Hospitals, Office of the Secretary, Bureau of Health Services Financing adopted a rule in April, 1990, amending the reimbursement  methodology for drugs  under the  Louisiana Medicaid Pharmacy  Program ( Louisiana  Register, Volume 16, Number 4). In compliance with Act 10 of the 1999 Regular Session of the  Louisiana  Legislature, the Bureau amended the April 20, 1990 rule to limit payments for prescription  drugs  to the lower of:

  1)  average wholesale price (AWP)   minus 10.5 percent for independent pharmacies and 13.5 percent for chain pharmacies;

   2)  Louisiana's  maximum allowable cost (MAC) limitation plus the maximum allowable overhead cost (MAOC);

   3) federal upper limits plus the; or

   4) provider's usual and customary charges to the general public. In addition, the definition of chain pharmacies was established as five or more Medicaid enrolled pharmacies under common ownership ( Louisiana  Register, Volume 26, Number 6).

   As a result of a budgetary shortfall, the Bureau adopted a rule amending the June 20, 2000 rule to limit payments for prescription  drugs  to the lower of ( AWP)  minus 15 percent for independent pharmacies and 16.5 percent for chain pharmacies. In addition, the definition of chain pharmacies was changed from five or more to more than fifteen Medicaid-enrolled  pharmacies  under common

ownership ( Louisiana  Register, Volume 26, Number 8). As a result of the allocation of funds by the Legislature during the 2001 Regular Session, the Bureau increased the  reimbursement  rate for prescription drugs under the Medicaid Pharmacy  Program by amending the estimated acquisition cost formula from ( AWP)  minus 15 percent to 9( AWP)  minus 13.5 percent for independent

pharmacies and from ( AWP)  minus 16.5 percent to ( AWP)  minus 15 percent for chain pharmacies. This emergency rule is being adopted to continue the provisions contained in the August 6, 2001 rule.

Emergency Rule

   Effective for dates of services on or after April 5, 2002, the Department of Health and Hospitals, Office of the Secretary, Bureau of Health Services Financing increases the  reimbursement  rate for prescription  drugs  under the  Medicaid Pharmacy  Program by amending the estimated acquisition cost formula from  average wholesale price (AWP)  minus 15 percent to  AWP  minus

13.5 percent for independent pharmacies and from  AWP  minus 16.5 percent to  AWP minus 15 percent for chain pharmacies. This adjustment applies to single source  drugs,  multiple source  drugs  that do not have a state maximum allowable cost (MAC) or federal upper limit and those prescriptions subject to (MAC) overrides based on the physician's certification that a brand name

product is medically necessary.

Agency Contact:

Ben A. Bearden, Bureau of Health Services Financing, P.O. Box 91030, Baton Rouge,  LA  70821-9030.

Citation:

R.S. 49:953.B(1) et seq.

Effective Date:

April 5, 2002