Medication Reimbursement

Reimbursement for prescription medications remains a struggle for pharmacies across the state. As pharmacy benefit managers (PBMs) dictate a pharmacy's contracted rate for reimbursement, pharmacies are left to face alone the skyrocketing generic drug prices and slow updates to reimbursement rates by PBMs. IPA has worked with key stakeholders to provide relief for appropriate medication reimbursement rates.

Iowa Medicaid

In Iowa, reimbursement for generic prescription drugs is determined as the lowest of the following methods: the average actual acquisition cost (AAC) plus a professional dispensing fee, the maximum allowable cost (MAC)/federal upper limit (FUL) plus the professional dispensing fee, or the provider's usual and customary charge. In such cases when an AAC rate hasn’t been established, the default reimbursement rate utilizes the Wholesale Acquisition Cost (WAC) rate. 
A biennial cost of dispensing (COD) survey of Iowa pharmacies is used to determine the dispensing fee or how much it costs for a pharmacy to fill a prescription excluding the cost of the drug itself. Together the AAC and COD assist in determining an accurate reimbursement rate for Iowa pharmacies.
Federal Upper Limit (FUL) Rate Override
IPA worked with Medicaid to compile a list of medications when Medicaid will not apply the FUL to a drug. This override would occur if: (1) the product does not meet the criteria for establishment of a federal upper limit, pursuant to section 1927(e)(4) of the Social Security Act (three or more therapeutically and pharmaceutically equivalent products), or the amount of the FUL is now below 150 percent of the published price for the least costly therapeutic equivalent, and (2) the current FUL is less than the Iowa average AAC. The FUL Override List can be used to identify past claims to be back dated to the effective date; and therefore reimbursed at AAC. Pharmacy professionals should contact the Myers and Stauffer Help Desk at 800-591-1183 to request that the Iowa Medicaid Enterprise review the AAC and FUL for particular drugs.

Preferred Drug List (PDL) Updates
When a status change occurs for a previously preferred brand name drug to non-preferred status, up to a minimum of 30 days transition period is given to pharmacies to help utilize existing brand name product in stock in an effort to decrease a pharmacy’s remaining brand name drug inventory (see PDL comment section regarding transition periods exceeding 30 days). If additional stock remains beyond this time period, pharmacies may call the POS Helpdesk at 877-463-7671 or 515-256-4608 (local) to request an override for the non-preferred brand name drug with a recent status change.

Recent Informational Letters for PDL

Commercial Insurance

IPA continues to work closely with the Iowa Insurance Division (IID) regarding regulation of PBMs. While IID continues to investigate and update their PBMs rules, pharmacies are encouraged to submit formal complaints to IID against PBM practices. Prior to filing a PBM complaint to the IID, pharmacy professionals must first submit a rate review request to the PBM. This process will likely need the assistance of a pharmacy’s contracted PSAO (Pharmacy Services Administrative Organization).

PBM Complaint Process
Following any inadequate rate of review with the PBM, a complaint can be submitted to the IID. The complaint must include:  pharmacy name and address, your name, e-mail address, telephone number, PBM’s full name, PSAO if applicable, Insurance Company’s full name, prescription number, date of service, and reason for complaint. Completed forms may be submitted online or be returned to: 

Iowa Insurance Division
Market Regulation Bureau
601 Locust St., 4th Floor
Des Moines, IA 50309-3738

IPA has compiled a PBM Complaint Toolkit as a how-to guide to walk you through the process of filing your complaints. (member login required)  

Other Resources:

Pharmacy Audit Assistance Service (PAAS): PAAS is a program developed to assist pharmacists with third-party audits, negotiations and contracts.