Archived 12.1 THE BASIS FOR ESTABLISHING A RATE OF PAYMENT DETERMINING A FEE... 2
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1 SECTION 12 - REIMBURSEMENT METHODOLOGY 12.1 THE BASIS FOR ESTABLISHING A RATE OF PAYMENT DETERMINING A FEE A LONG-TERM CARE DISPENSING FEE REQUIREMENTS B CREDITS ON MEDICATIONS RETURNED FROM LONG TERM CARE FACILITIES C DISPENSING FEE DIFFERENTIAL MEDICARE/MEDICAID REIMBURSEMENT (CROSSOVER CLAIMS) RECIPIENT COST SHARING GENERIC REIMBURSEMENT OVERRIDE PUBLIC HEALTH SERVICE DRUG PRICING PROGRAM A MANAGED HEALTH CARE DELIVERY SYSTEM METHOD OF REIMBURSEMENT A MANAGED HEALTH CARE PRIOR CONTENTS NO LONGER APPLICABLE DIRECT DEPOSIT OPTION
2 SECTION 12 REIMBURSEMENT METHODOLOGY 12.1 THE BASIS FOR ESTABLISHING A RATE OF PAYMENT The Division of Medical Services is charged with establishing and administering the rate of payment for those medical services covered by the Missouri Title XIX Program. The Division establishes a rate of payment that meets the following goals: Ensures access to quality medical care for all recipients by encouraging a sufficient number of providers; Allows for no adverse impact on private-pay patients; Assures a reasonable rate to protect the interests of the taxpayers; and Provides incentives that encourage efficiency on the part of medical providers. Funds used to reimburse providers for services rendered to eligible recipients are received in part from federal funds and supplemented by state funds to cover the costs. The amount of funding by the federal government is based on a percentage of the allowable expenditures. The percentage varies from program to program and in some cases different percentages for some services within the same program may apply. Funding from the federal government may be as little as 60% or as much as 90%, depending on the service and/or program. The balance of the allowable, (10-40%) is paid from state General Revenue appropriated funds. Total expenditures for Medicaid must be within the appropriation limits established by the General Assembly. If the expenditures do not stay within the appropriation limits set by the General Assembly and funds are insufficient to pay the full amount, then the payment for services may be reduced pro rata in proportion to the deficiency DETERMINING A FEE Under a fee system each procedure, service, medical supply and equipment covered under a specific program has a maximum allowable fee established. Missouri Medicaid reimbursement for pharmacy claims is determined by applying the following methodology. Payment is made at the lower of the: 1. Average Wholesale Price (AWP) less 10.43% plus professional dispensing fee, 2. Applicable Federal Upper Limit plus professional dispensing fee, 3. Applicable Missouri Maximum Allowable Cost (MAC) plus professional dispensing fee, 4. Applicable Wholesaler Acquisition Cost (WAC), plus 10%, plus professional dispensing fee, or 5. Usual and customary charge. 2
3 The Medicaid Program may not be billed an amount in excess of the provider s usual and customary charge for a particular service. Pharmacy claims must be submitted using the precise 11-digit national drug code (NDC) number of the package from which each prescription is dispensed. A product without an NDC is not reimbursable. Refer to the Missouri Maximum Allowable and Federal Upper Limit Cost for Specific Drug Products for further information A LONG-TERM CARE DISPENSING FEE REQUIREMENTS The qualifications for determining the controlled dose long-term care prescription fee differential that must be met are as follows: The medication was dispensed in unit-dose and/or controlled-dose containers which meet at a minimum, Class B standards for moisture permeation as defined in the United States Pharmacopoeia. The pharmacy provides emergency services at 24 hours a day, 7 days a week availability and the willingness to assist the facility and the facility s residents in accessing medications through the Medicaid exception process. The provider certifies by completing the Missouri Medicaid Long Term Care Pharmacy Dispensing Fee Provider Specialty Application form that these requirements are met. Each prescription is identified as having been dispensed in qualifying controlled dose or unit-dose packaging by entering an X in the nursing home indicator field (Field #4) of the Pharmacy Claim form. The recipient is identified as a resident of a long term care facility on the recipient eligibility file at DMS. Reference the Missouri Medicaid Long Term Care Pharmacy Dispensing Fee Provider Specialty Application form B CREDITS ON MEDICATIONS RETURNED FROM LONG TERM CARE FACILITIES Providers must submit a credit to the state for the cost of drugs which may be returned from long term care (LTC) facilities for re-dispensing. The Division of Medical Services has established policy in regulation which states, in part, that the "Division of Medical Services shall not pay for an unused pharmacy item returned to the dispensing pharmacy by or on behalf of a Medicaid recipient, due to a change in prescription, hospitalization, death of a recipient, or other reason when the item can be accepted for reuse by the pharmacy in accordance with applicable federal or state laws or regulations." 3
4 Pharmacies dispensing on behalf of Medicaid beneficiaries residing in LTC facilities must provide the Division of Medical Services credit for all reusable items (any unused portion) not taken by the Medicaid recipient, under the following conditions: The medication may be accepted for reuse per pharmacist's professional judgement as well as federal and state law or regulation. The products, in the pharmacist's professional judgement, may be reused. The cost of the ingredient accepted for re-use is greater than $4.24. Providers must accept medications dispensed on or after July 30, 2001, and subsequently returned from long term care facilities. Documentation and tracking of these medications must take place as state and federal laws and regulations dictate. The Division of Medical Services will not establish specific methods to conduct these functions. Providers are reimbursed a handling fee for each transaction. The amount will not exceed $4.24, the current maximum total dispensing fee for medications dispensed to Medicaid eligible residents of LTC facilities C DISPENSING FEE DIFFERENTIAL The amount providers are reimbursed for Medicaid fee-for-service prescriptions is the state portion of the pharmacy professional dispensing fee in effect for the date of service. In addition, for qualifying pharmacies dispensing MC+ managed care health plan prescriptions, the difference between the dispensing fee received from the plan and the state portion is paid for the first 1000 prescriptions filled in any calendar quarter. Be aware that this differential is contingent upon legislative action each fiscal year. The MC+ managed care plan pharmacy professional dispensing fee differential shall be paid by the applicable managed care plan and shall be available only to: 1. corporations, partnerships or individual proprietorships with less than 25 employees who operate pharmacies or pharmacy franchises. For the purpose of identifying eligible pharmacies, an employee is defined as either a part-time or a full-time employee; 2. public health care entities owned and operated by a state, county or local governmental agency; and 3. hospitals that qualify as first-tier 10% add-on disproportionate share hospitals in accordance with 13 CSR MEDICARE/MEDICAID REIMBURSEMENT (CROSSOVER CLAIMS) For Medicaid recipients who are also Medicare beneficiaries and receive services covered by the Medicare Program, Missouri Medicaid pays the deductible and coinsurance amounts otherwise charged to the recipient by the provider. Certain drugs have been determined by the Centers for Medicare & 4
5 Medicaid Services (CMS) to be eligible for consideration as a Part B Medicare benefit. See Section 16 for a detailed explanation of these claims RECIPIENT COST SHARING Certain Medicaid services are subject to recipient cost sharing, referred to as copay, coinsurance, or shared dispensing fee (pharmacy). The cost sharing amount is paid by the recipient at the time services are rendered. Services of the Pharmacy Program described in this manual are subject to a cost sharing amount. The provider must accept in full the amounts paid by the state agency plus any dispensing fee amount required of the recipient. Refer to Section for program specific information GENERIC REIMBURSEMENT OVERRIDE A provider may obtain approval for an override to a generic reimbursement limitation, such as Missouri Maximum Allowable and Federal Upper Limit Cost for Specific Drug Products, in order to allow for reimbursement at a trade name level. For more information on the generic reimbursement override, reference Section PUBLIC HEALTH SERVICE DRUG PRICING PROGRAM Covered entities who participate in the public health service drug pricing program must bill their actual net cost NOT the usual and customary. These entities must not charge above their net charge plus a reasonable dispensing fee A MANAGED HEALTH CARE DELIVERY SYSTEM METHOD OF REIMBURSEMENT One method through which Medicaid provides services is a Managed Health Care Delivery System. A basic package of services is offered to the recipient by the health plan; however, some services are not included and are covered by Medicaid on a fee-for-service basis. Pharmacy services are included as a plan benefit in Missouri s MC+ managed health care program A MANAGED HEALTH CARE Under a managed health plan, a basic set of services is provided either directly or through subcontractors. Managed health care plans are reimbursed at an established rate per member per month. Reimbursement is based on predicted need for health care and is paid for each recipient for each month of coverage. Rather than setting a reimbursement rate for each unit of service, the total reimbursement for all enrollees for the month must provide for all needed health care to all recipients in the group covered. The health plan is at risk for staying within the overall budget that is, within the negotiated rate per member per month multiplied by the number of recipients covered. Some individual cases 5
6 exceed the negotiated rate per member per month but many more cases cost less than the negotiated rate. The Medicaid Program utilizes the managed care delivery system for certain included Medicaid eligibles. Refer to Section 1 and Section 11 for a detailed description PRIOR CONTENTS NO LONGER APPLICABLE 12.9 DIRECT DEPOSIT OPTION The Missouri Medicaid Program offers providers the option of having their Medicaid checks automatically deposited into their checking or savings accounts. This option is much quicker than receiving payment through the mail and eliminates the possibility of lost checks. Providers electing to participate in direct deposit must complete the Application for Provider Direct Deposit form. Direct deposit begins following a submission of a properly completed application form to the Division of Medical Services, the successful processing of a test transaction through the banking system and the authorization of the Division to make payment using the direct deposit option. The state conducts direct deposit through the automated clearing house system, utilizing an originating depository financial institution. The rules of the National Clearing House Association and its member local Automated Clearing House Association shall apply, as limited or modified by law. The Application for Provider Direct Deposit form provides instructions for completing the form on the reverse side. This form must also be used if providers wish to change an account number or cancel their election to participate. Exact copies of the form may be used. One form must be completed for each provider number. Providers may obtain additional forms by contacting the Provider Enrollment Unit of the Division of Medical Services at P.O. Box 6500, 615 Howerton Court, Jefferson City, MO The provider may also download these forms from this website. Please read the form and instructions carefully; Section C contains statements regarding legal obligations. The Division of Medical Services will terminate or suspend the direct deposit for administrative or legal actions, including but not limited to: ownership change, duly executed liens or levies, legal judgments, notice of bankruptcy, administrative sanctions for the purpose of ensuring program compliance, death of a provider, and closure or abandonment of an account. All payments are direct deposited or mailed. Providers and their representatives are not permitted to accept delivery of Medicaid checks in person. The Medicaid Remittance Advice is mailed separately. END OF SECTION TOP OF PAGE 6
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