Outpatient Drugs, Fraud, Waste, and Abuse — Coverage Criteria
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Requirements and controls for outpatient prescription drugs for Montana Medicaid, Healthy Montana Kids, and Mental Health Services Plan members, including fraud/abuse definitions, refill limits, prior authorization triggers, and opioid prescribing limits.
No material clinical or coverage changes in this revision.
Operational Coverage and Controls
Operational coverage and control criteria
Departmental rules and limits for outpatient drug dispensing and member monitoring
Exact drug list: CII-CV, ultram, ultracet, carisoprodol, gabapentin.
Authorization for early refills and requests for quantities that would exceed the program's supply limits are tightly controlled. Per ARM references in the policy, the department will not grant authorization for early refills, medications dispensed in quantities greater than a 34-day supply when manufacturer packaging precludes the 34-day limit, vacation supplies, or replacement for lost or stolen maintenance medications. This rule enforces the 34-day maximum supply constraint and makes exceptions for manufacturer packaging ineligible for additional supply authorization.
'Abuse' of the outpatient drug program includes misuse that leads to undue expenditures or substance misuse. Examples provided by the department include high utilization, multiple provider usage resulting in unnecessary services, repeated emergency room or urgent care use, unwarranted multiple pharmacy usage, and specifically the seeking of medical services that are not medically necessary. Such behaviors may prompt professional review and program interventions.
Codes, Limits, and Refill Thresholds
| CII-CV | Controlled substance schedules II through V (referred to in refill and reporting rules) |
| ultram | tramadol |
| ultracet | tramadol and acetaminophen |
| carisoprodol | specified muscle relaxant referenced in refill and reporting rules |
| gabapentin | specified drug referenced in refill and reporting rules |
Prior Authorization, Denials, and Management Interventions
Prior authorization required for 'Drug not covered'
A medication or medication class may be designated as “Drug not covered,” meaning the member cannot receive the medication unless a prior authorization is granted; members with a “drug not covered” may be required to have 100% of the estimated therapy days elapse before a refill authorization is granted.
Management interventions for inappropriate use
For inappropriate drug use determined by professional review, the department may impose targeted management interventions to limit diversion or misuse.
- Implementation of a treatment contract requiring one prescribing physician.
- Random drug screening.
- Random pill counts.
- Referral to the team care program (ARM 37.86.5303).
- Restrictions through 'Drug Not Covered' and requirement to utilize 100% of estimated therapy days prior to refill.
Rulemaking submission requirements
All rulemaking materials must be sent to the Office of Legal Affairs (OLA) as soon as possible or at least 4 weeks prior to filing with the Secretary of State; required materials include official text changes, a statement of reasonable necessity, fiscal impact statement, small business impact, and Medicaid performance‑based rulemaking information, using forms available on the OURS website.
- Use the Rule Forms on the OURS website under the Director's Office page.
- Contact OLA staff (contacts listed in source) with questions.
Early refill and oversupply denials
Authorizations for early refills, quantities exceeding a 34‑day supply when manufacturer packaging would preclude the 34‑day limit, vacation supplies, or replacement for lost or stolen maintenance medications will not be granted routinely.
- Manufacturer packaging that precludes a 34‑day supply is not a basis for approving quantities greater than 34 days.
- Lost, stolen, or vacation supply requests for maintenance medications are excluded from routine authorization.
Policy Background
This policy defines fraud and abuse for outpatient drug programs and establishes controls to prevent misuse and diversion. Fraud is described as intentional deception or misrepresentation, knowing it could produce an unauthorized benefit (examples: doctor shopping, suspected cash payments to circumvent Medicaid, or provider reports of diversion). Abuse is defined as misuse that results in undue expenditures or substance abuse, with examples including high utilization, multiple providers producing unnecessary services, seeking non‑medically necessary services, repeated ER/urgent care use, and multiple pharmacy usage. To limit misuse and diversion, the department enforces refill thresholds, supply limits (including a 34-day supply ceiling when applicable), reporting of cash payments for specified drugs, limits for opioid‑naïve members (a 7-day supply and up to 50 MME/day), and may require tamper‑resistant prescription pads and targeted management interventions such as random drug screening, random pill counts, or treatment contracts with a single prescriber.
Key Definitions
Opioid and Supply Limits
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