CurrentCareSourcePolicy PAD-0098-AR-MCD

Medicaid Drug Rebate Program (MDRP) Coverage Rules - AC Reject

Governs pharmacy staff guidance on MDRP requirements for covered outpatient drugs and the AC NCPDP pharmacy reject when manufacturers are non-participating; affects CareSource Medicaid pharmacy operations and claims processing.

Policy Summary

PayerCareSource

PolicyMedicaid Drug Rebate Program (MDRP) Coverage Rules - AC Reject

Policy CodePolicy PAD-0098-AR-MCD

Change TypeNo material change

Effective Date07/26/2022

Next Review Date

Key ActionDo not assume this policy ensures authorization or payment; refer to the plan contract/Evidence of Coverage if there is a conflict.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

ACNCPDP reject code for non-participation

07/26/2022Effective date

PAD-0098-AR-MCDDocument ID

MDRPProgram

MDRP Coverage Requirements & Exclusions

MDRP coverage criteria and exclusions

Requirements for a drug to be eligible for Medicaid coverage under the Medicaid Drug Rebate Program (MDRP) and enumerated exclusions.

ALL of the following

ALL of the following
- Approved for safety and effectiveness as a prescription drug by the FDA under section 505 or 507 of the FFDCA or under section 505(j) of the FFDCA
- Or: commercially used or sold in the U.S. before the Drug Amendments of 1962 (or identical/similar/related per 21 CFR 310.6(b)(1)) and not finally determined to be a 'new drug' or subject to certain enforcement actions
- Or: described in section 107(c)(3) of the Drug Amendments of 1962 with Secretary determination of compelling medical need or related/identical per 21 CFR 310.6(b)(1), or without a pending notice to withdraw approval for being less than effective

Policy Summary

PayerCareSource

PolicyMedicaid Drug Rebate Program (MDRP) Coverage Rules - AC Reject

Policy CodePolicy PAD-0098-AR-MCD

Change TypeNo material change

Effective Date07/26/2022

Next Review Date

Key ActionDo not assume this policy ensures authorization or payment; refer to the plan contract/Evidence of Coverage if there is a conflict.

SourceLink

On This Page

Drugs and situations that are NOT considered Covered Outpatient Drugs (examples)

Any drug product (prescription or OTC) for which an NDC number is not required by the FDA
Any drug product for which the manufacturer has not submitted evidence to CMS demonstrating it satisfies the Conditions of Coverage
Any drug product or biological used for a medical indication that is not a medically accepted indication
Over-the-counter products that are not drugs
Any drug, biological product, or insulin provided as part of or incident to and in the same setting as: inpatient services, hospice services, dental services (except drugs the State plan authorizes direct reimbursement to the dispensing dentist), physician services, outpatient hospital services, nursing facility and ICF/IID services, other laboratory and x-ray services, or renal dialysis

Pharmacy Processing & Authorization Notes

Note

Authorization / Contract Precedence

Administrative Policy Statements prepared by CSMG Co. and its affiliates (including CareSource) do not ensure an authorization or payment of services. Please refer to the plan contract (often referred to as the Evidence of Coverage) for the service(s) referenced in the Administrative Policy Statement. If there is a conflict between the Administrative Policy Statement and the plan contract (i.e., Evidence of Coverage), then the plan contract (i.e., Evidence of Coverage) will be the controlling document used to make the determination.

Denial Risk

AC Reject Processing

Pharmacy claims not eligible for reimbursement due to not meeting CMS Medicaid Drug Rebate Program (MDRP) requirements will reject at the point of sale with the NCPDP Pharmacy Reject Code AC and the following description: "AC - Product Not Covered Non-Participating Manufacturer; Manufacturer is not participating in drug rebate on date of service dispensed."

NCPDP Reject Code: AC — Product Not Covered Non-Participating Manufacturer
Reject description returned when manufacturer is not participating in MDRP on date of service

Key Terms

Covered Outpatient Drug (COD) — definition entry

TermCovered Outpatient Drug (COD)

DefinitionA drug which may be dispensed only upon a prescription and is treated as a prescribed drug for the purposes of section 1905(12) of the Social Security Act (with exceptions in Conditions of Coverage).

Scope NoteExceptions described in Section E (Conditions of Coverage) paragraphs II and III are not CODs.

Medicaid Drug Rebate Program (MDRP) — definition entry

TermMedicaid Drug Rebate Program (MDRP)

DefinitionA program that includes CMS, state Medicaid agencies, and participating drug manufacturers to help offset Federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients.

PurposeEnsures manufacturer participation and rebate agreements to support Medicaid coverage and cost offsets.

National Drug Rebate Agreement (NDRA) — definition entry

TermNational Drug Rebate Agreement (NDRA)

DefinitionAn agreement entered into by a drug manufacturer with the Secretary of the Department of Health and Human Services in exchange for state Medicaid coverage of most of the manufacturer's drugs.

ImplicationManufacturer drugs covered by Medicaid generally require an NDRA in effect on the date of service.

Manufacturer — definition entry

TermManufacturer

DefinitionAny entity engaged in the production, preparation, propagation, compounding, conversion, processing, packaging, repackaging, labeling, relabeling, or distribution of prescription drug products; does not include wholesale drug distributors or retail pharmacies licensed under State law.

NoteIncludes entities that perform chemical synthesis or extraction-based production and those that package or distribute drug products.

340B Program — definition entry

Term340B Program

DefinitionA discount drug pricing program under Section 340B of the Public Health Service Act that requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to qualifying health care organizations.

RelevanceManufacturer participation and 340B pricing status affect Medicaid coverage and rebate obligations.

Federal Supply Schedule (FSS) — definition entry

TermFederal Supply Schedule (FSS)

DefinitionAlso known as the General Services Administration (GSA) Schedule or Multiple Award Schedule (MAS); a long-term governmentwide contract providing access to commercial products and services at fair and reasonable prices to the government.

Relation to MDRPAn FSS master agreement with the VA Secretary is one of the manufacturer agreements relevant to MDRP eligibility considerations.

NCPDP Reject Code — definition entry

TermNCPDP Reject Code

DefinitionA type of reject error code received by a pharmacy upon processing a prescription.

Example (Operational)AC — used when a product is not covered due to a non-participating manufacturer (see AC reject processing).

OpenPayer

Medicaid Drug Rebate Program (MDRP) Coverage Rules - AC Reject

MDRP Coverage Requirements & Exclusions

NCPDP Reject Codes

Pharmacy Processing & Authorization Notes

Key Terms