On Sep. 20, CMS issued final rule on Medicaid drug rebate program.
CMS issued fact sheet on final rule to update Medicaid drug rebate program (MDRP).
Final rule implements policies in MDRP related to new legislative requirements in the Medicaid Services Investment and Accountability Act 2019 (MSIAA), Pub. Law 116-16.
Re drug misclassification and drug pricing/product data misreporting by manufacturers
Misclassified Drug Information
Manufacturers that participate in MDRP must report certain drug-related product and pricing information upon participation in the MDRP on monthly and quarterly basis.
Final rule enhances MDRP integrity and strengthens policies that will ensure greater consistency and accuracy of drug information reporting, timely data collection.
Newly granted statutory authorities to address issues re incorrect reporting by drug manufacturers of drug product information in the Medicaid drug program (MDP).
Defines situations in which CMS would consider a drug misclassified for MDRP.
Also other situations in which manufacturer is paying rebates to States different from the rebates that are supported by the drug data being reported to the MDRP.
Describes process and timeline that CMS will use to notify the manufacturer that the agency has determined misclassification of covered outpatient drug (COD) occurred.
Allows CMS to suspend National drug rebate agreement of manufacturer for 30 days.
This for late reporting of drug product and pricing information required under statute.
Final rule implements CMS’ options under MSIAA for enforcing program requirements when manufacturer does not correct misclassification after being notified.
CMS can correct misclassification, suspending drug or terminating manufacturer from MDRP, excluding the misclassified drug from Medicaid payment, imposing civil penalty.
Program Enhancements
Final rule defines market date of drug for purposes of establishing base date average manufacturer price quarter, used to calculate inflation rebates that manufacturers owe.
Limits period for manufacturers to initiate disputes re State-invoiced utilization data during period under 12 quarters from last day of quarter from invoice postmark date.
Ingredient cost reimbursement, professional dispensing fee reimbursement must be based on pharmacy-established cost data, market-based research does not qualify.
Requires States to collect national drug code information on all physician-administered drugs; States should be invoicing for rebates for all physician-administered drugs.
Specify conditions that constitute internal investigation of pricing data to allow the manufacturer to make changes to already reported pricing data outside 12-quarters.
Pharmacy Benefit Operations
Requires that States instruct Medicaid managed care plans to assign and exclusively use Medicaid-specific bank identification number, processor control number (BIN/PCN).
Also, group number on Medicaid managed care beneficiaries’ cards, to help ensure the scope of benefits delivered, avoid duplicates under 340B Drug discount program.
State managed care contracts that include pharmacy benefit managers (PBMs) to be transparent about spread pricing, which occurs when the PBM retains the difference.
Between what is paid by managed care plan, what PBM pays a provider for drug cost.
Effectiveness
Regulations are effective on Nov. 19, 2024.
Sep. 26, 2024 Fed Reg Final Rule
On Sep. 26, 2024, CMS published final rule in the federal register, effective Nov. 19.
Except for 2 provisions in the Medicaid managed care contract requirements section.
42 CFR 438.3(s)(7) and 42 CFR 438.3(s)(8) first rating period for contracts with MCOs, PIHPs, and PAHPs applicability date beginning on/after 1 year following Nov. 19, 2024.
Regulators
CMS
Entity Types
Corp; Ins
Reference
89 FR 79020, 9/26/2024; PR, RF RIN 0938-AU28, Doc. 2024-21254, 9/20/2024; MSIAA; Citation: Pub. Law 116-16; 42 CFR 438.3;
Functions
Actuarial and Valuation; Compliance; Legal; Privacy; Product Administration; Reporting
