This section provides an overview of Federal Medicaid prescription drug policies that directly influence States’ reimbursement of prescription drugs, including an in-depth look into each State’s coverage and reimbursement methodologies as provided in the State’s Medicaid plan.  We also highlight those States with supplemental drug rebate agreements and provide a list of State pharmacy assistance programs (SPAP)that currently meet our criteria for exemption from the manufacturers’ calculations of best price.

Excluded Drug Coverage by State Medicaid Program

Effective January 1, 2006, Medicaid enrollees who are entitled to receive Medicare benefits under Part A or Part B no longer receive their pharmacy benefits under their State Medicaid agency, except for drugs that are not covered under Medicare Part D. Each State has the option to cover these drugs for their Medicaid beneficiaries who also have Medicare coverage. Each State has a list of excluded drugs [ZIP]. Please note this does not apply to the territories.

Physician Administered Drugs

The Deficit Reduction Act of 2005 (DRA) requires States to collect Medicaid rebates for certain physician-administered drugs.  Beginning January 1, 2006, States must collect utilization data for single source, physician-administered drugs in order to secure rebates for such drugs.  Effective January 1, 2007, States must also collect National Drug Codes (NDC) for the 20 multiple source physician-administered drugs with the highest dollar volume in Medicaid.  Beginning January 1, 2008, the DRA provides that States not collecting NDCs on these 20 drugs will not receive Federal matching payments for the drugs unless they receive a hardship waiver.  For further information on this part of the DRA, please see the SMD letter on physician-administered drugs.

We are proposing to stop publishing the “Top 20 multiple source physician-administered drugs” on the Medicaid.gov website.  Previously, this listing was available for States to use when requiring providers to place National Drug Codes (NDCs) on claims for at least the top 20 multiple source drugs, in addition to all other physician-administered drugs.  

After a thorough search of the limited highest dollar volume Medicaid multiple source drugs, we discovered that most of the drugs were low-cost products and would not effectively represent a benefit to the States in rebate collection.  Further, we believe the State impact in removing the top 20 listing will be minimal, as virtually all States do not limit NDC numbers on claims for only these drugs, but require NDC submission for all physician-administered drugs.

If you have comments on this proposal, please submit them to Joseph Fine at joseph.fine@cms.hhs.gov.

State Medicaid Reimbursement Information

The Medicaid reimbursement chart outlines the methodologies and co-payment amounts utilized by States.  Pharmacy payment requirements are outlined in Federal regulations at 42 CFR 447 Subpart F.  The Code of Federal Regulations specifically covers payment requirements for estimated acquisition cost and reasonable dispensing fees.  Co-payment amounts are addressed at 42 CFR 447.54.  Information will be updated and posted on the web quarterly with the data provided for in the CMS approved State plans.  We update the chart quarterly and archive the previous four quarters.

Medicaid Prescription Reimbursement Information by State - Quarter Ending June 2012 

Medicaid Prescription Reimbursement Information by State - Quarter Ending March 2012

Medicaid Prescription Reimbursement Information by State - Quarter Ending December 2011

Medicaid Prescription Reimbursement Information by State-Quarter Ending September 2011

Medicaid Prescription Reimbursement Information by State - Quarter Ending June 2011

State Supplemental Drug Rebate Agreements

Many States have received CMS approval on their State Plan Amendments to enter into single-State and multi-State supplemental drug rebate pools that generate rebates that are at least as large as the rebates set forth in the Secretary's national rebate agreement with drug manufacturers.  For your information, we have compiled a chart that depicts the States with Medicaid Pharmacy Supplemental Rebate Agreements (SRA) [PDF] with their effective dates. 

SPAP Best Price

The Medicaid statute allows manufacturers participating in the Medicaid Drug Rebate Program to exclude prices to State pharmaceutical assistance programs (SPAPs) from their Medicaid Best Price calculations.  CMS has compiled a list of programs that meet the criteria to be considered SPAPs called Medicaid SPAP Best Price List.  For the purposes of determining whether a SPAP is excluded from the Medicaid Best Price, manufacturers should refer to this list.  Please note that this list only includes States that submitted a description of their programs to CMS for review based on the established criteria in CMS' Manufacturer Release No. 68 [PDF] (April 1, 2005).  The qualification of State-only programs as SPAPs is based on the information provided by the State and may be subject to further review if changes occur within the program.

Question on State prescription drug resources or questions regarding Medicaid Prescription Drug Program in general?  Email RxDrugPolicy@cms.hhs.gov.

Page last updated on 7/30/2012