Pennsylvania Code & Bulletin

• No statutes or acts will be found at this website.

The Pennsylvania Bulletin website includes the following: Rulemakings by State agencies; Proposed Rulemakings by State agencies; State agency notices; the Governor’s Proclamations and Executive Orders; Actions by the General Assembly; and Statewide and local court rules.

PA Bulletin, Doc. No. 18-1902



Fee-for-Service Payment for Outpatient Drugs in the Medical Assistance Program

[48 Pa.B. 7589]
[Saturday, December 8, 2018]

 The Department of Human Services (Department) announces an adjustment to the fee-for-service (FFS) professional dispensing fee paid to pharmacy providers for outpatient drugs dispensed in the Medical Assistance (MA) program.

 On April 1, 2017, the Department issued a public notice that announced changes to the FFS payment methodology for outpatient drugs in the MA program, as required in the ''Medicaid Program; Covered Outpatient Drugs'' final rule of the Centers for Medicare & Medicaid Services (CMS) published at 81 FR 5170 (February 1, 2016) amending 42 CFR Part 447 (relating to payments for services) (47 Pa.B. 1921 (April 1, 2017)). The final rule requires states to use actual acquisition cost (AAC), rather than estimated acquisition cost, to pay for pharmacy ingredient costs. The final rule also requires states to pay a professional dispensing fee, rather than a ''reasonable dispensing fee,'' and describes the pharmacy costs that are to be included in the calculation of the professional dispensing fee.

 In the public notice issued last year, the Department announced the use of National Average Drug Acquisition Cost (NADAC) to determine AAC to pay for pharmacy ingredient costs and payment of a $7 professional dispensing fee. After implementation of the revised payment methodology, and in response to the Department's submission of a State Plan Amendment, the CMS expressed concern that the $7 professional dispensing fee was lower than the approved professional dispensing fees of neighboring states. The Department reconsidered the professional dispensing fee, taking into consideration the approved professional dispensing fees of states bordering this Commonwealth. As a result, the Department determined that the professional dispensing fee could be increased to $10, which is consistent with the $10 professional dispensing fee of New York and Delaware. On August 7, 2018, the CMS notified the Department that the State Plan Amendment was approved. The CMS approval included a letter from the CMS Director of the Division of Pharmacy, dated July 30, 2018, which advised the Department that it had demonstrated that the use of NADAC and a professional dispensing fee of $10 is consistent with the Federal requirement for efficiency, economy, and quality of care, and sufficient to ensure that care and services are available at least to the extent they are available to the general population in the geographic area.

Fiscal Impact

 The fiscal impact of the revised payment methodology is estimated at $8.218 million in total funds ($3.960 million in State funds) in Fiscal Year 2017-2018.

Effective Date

 The final rule requires that the new payment methodology be effective April 1, 2017. The Department implemented the $10 professional dispensing fee on August 8, 2018, and developed a process to adjust claims that were paid before the implementation of the $10 professional dispensing fee. The Department is notifying all enrolled pharmacies of the process by means of an MA Bulletin.

Copies of Notice

 This public notice is available for review at local County Assistance Offices throughout this Commonwealth.

Public Comment

 Interested persons are invited to submit written comments regarding the revised payment methodology within 30 days to the Department of Human Services, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120,

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


Fiscal Note: 14-NOT-1280. (1) General Fund; (2) Implementing Year 2018-19 is $8,884,000; (3) 1st Succeeding Year 2019-20 through 5th Succeeding Year 2023-24 are $3,930,000; (4) 2017-18 Program—$477,690,000; 2016-17 Program—$450,970,000; 2015-16 Program—$392,918,000; (7) MA—Fee-for-Service; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 18-1902. Filed for public inspection December 7, 2018, 9:00 a.m.]

No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.