WSR 04-19-109

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Medical Assistance Administration)

[ Filed September 21, 2004, 11:14 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 04-09-035.

Title of Rule and Other Identifying Information: Amending WAC 388-530-1050 Definitions, 388-530-1100 Covered drugs, devices, and pharmaceutical supplies, 388-530-1125 Drug rebate program, 388-530-1150 Noncovered drugs and pharmaceutical supplies and reimbursement limitations, 388-530-1200 Prior authorization program, 388-530-1250 Prior authorization process, 388-530-1260 Therapeutic consultation service, 388-530-1270 Mail order services, 388-530-1400 Maximum allowable cost, 388-530-1900 Drug use and claims review and 388-530-1950 Point-of-sale (POS) system/prospective drug use review; and new sections WAC 388-530-1280 Preferred drug list(s) and 388-530-1290 Therapeutic interchange program.

Hearing Location(s): Blake Office Park East (behind Goodyear Courtesy Tire), Rose Room, 4500 10th Avenue S.E., Lacey, WA, on November 9, 2004, at 10:00 a.m.

Date of Intended Adoption: Not sooner than November 10, 2004.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail fernaax@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m., November 9, 2004.

Assistance for Persons with Disabilities: Contact Fred Swenson, DSHS Rules Consultant, by November 5, 2004, TTY (360) 664-6178 or (360) 664-6097.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rules implement SB 6088 (chapter 29, Laws of 2003) which directs state agencies to establish an evidence-based prescription drug program that identifies preferred drugs, develop programs to provide prescription drugs at a reasonable price to those in need, and increase public awareness regarding their safe and cost-effective use. To fulfill this legislative mandate, the proposed rules establish new sections within chapter 388-530 WAC, Pharmacy services, for preferred drug list(s) and the therapeutic interchange program (TIP). The proposed rules also amend the sections in chapter 388-530 WAC listed above to update, clarify, and make them consistent with the new sections.

Statutory Authority for Adoption: RCW 74.08.090, 70.14.050.

Statute Being Implemented: RCW 70.14.050, 69.41.150, 69.41.190, chapter 41.05 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Department of Social and Health Services, governmental.

Name of Agency Personnel Responsible for Drafting: Ann Myers, 905 Plum Street S.E., Olympia, WA 98501, (360) 725-1345; Implementation and Enforcement: Siri Childs, 805 Plum Street S.E., Olympia, WA 98501, (360) 725-1564.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

SUMMARY OF PROPOSED RULES: The Department of Social and Health Services' Medical Assistance Administration (MAA) is proposing to amend chapter 388-530 WAC, Pharmacy services. The 2003 state legislature directed state agencies to implement SB 6088 (chapter 29, Laws of 2003) which directs the establishment of an evidence-based prescription drug program that identifies preferred drugs, develop programs to provide prescription drugs at a reasonable price to those in need, and increase public awareness regarding their safe and cost-effective use. The proposed amendments:

Establish rules for preferred drug list(s);
Establish rules for the therapeutic interchange program (TIP);
Update program-related definitions; and
Clarify and update other sections in the chapter for consistency with the new sections.
SMALL BUSINESS ECONOMIC IMPACT STATEMENT: Chapter 19.85 RCW, the Regulatory Fairness Act, requires that the economic impact of proposed regulations be analyzed in relation to small businesses and outlines the information that must be included in a small business economic impact statement (SBEIS). Preparation of an SBEIS is required when a proposed rule has the potential of placing a more than minor economic impact on business.

The proposed rule changes will have an impact on providers who prescribe drugs for Medicaid clients and pharmacists who fill those prescriptions. The degree of impact will be determined by whether or not a prescriber enrolls as "an endorsing practitioner."

The therapeutic interchange program (TIP) allows prescribers to endorse a Washington preferred drug list (PDL). These "endorsing practioners" will find that TIP reduces the necessity for prior authorization for nonpreferred drugs. When these endorsing practitioners write a prescription for a drug that is not on the Washington PDL and indicate that substitution is permitted, the filling pharmacist substitutes a therapeutically equivalent drug from the preferred drug list for the prescribed drug and informs the prescriber. In those cases where the endorsing practitioner determines that it is medically necessary for the client to receive a drug that is not on the preferred drug list, and indicates "dispense as written (DAW)" on the prescription, the pharmacist may dispense the nonpreferred drug without obtaining prior authorization from MAA.

A pharmacist who receives a DAW prescription for a nonpreferred drug from a nonendorsing practitioner must obtain prior authorization from MAA prior to dispensing the drug. For these nonendorsing practitioners, TIP may result in an increase in the number of times that prior authorization is required. In these circumstances, the telephone calls and staff time required to communicate with the prescriber and obtain prior authorization may increase.

MAA is currently unable to determine what it may cost pharmacists for the telephone calls and staff time used to contact prescribers or contact MAA for prior authorization. Nor does MAA have specific information regarding the costs to the prescriber for telephone calls and staff time used in consultations with pharmacists. MAA concludes that some new costs may be imposed on the small businesses affected by them, but is unable to determine the extent of those costs at this time. If information about increased costs becomes available after adoption of the rule, MAA will analyze that information and consider possible mitigation measures.

PRELIMINARY ANALYSIS OF PROBABLE COSTS: The department anticipates that providers who are nonendorsing practitioners will experience an increase in the number of times that prior authorization is required to fill a prescription for a nonpreferred drug, thereby increasing the staff time necessary to handle these situations. It is also likely that pharmacists will experience an increase in the number of times they must obtain prior authorization to fill a prescription for a nonpreferred drug from a nonendorsing practitioner. While the department anticipates the provider's administrative tasks associated with obtaining prior authorization may increase, it is unable to determine specific costs for tasks such as telephone calls and staff time. The department also expects the number of providers who enroll as endorsing practitioners will increase substantially as the program is implemented, thereby reducing the probable increase in the administrative tasks mentioned above.

PRELIMINARY ANALYSIS OF PROBABLE BENEFITS: As more endorsing practitioners participate in the therapeutic interchange program (TIP), less prior authorization will be required by the prescriber and the dispensing pharmacist. Prescribers determine which nonpreferred drugs are medically necessary for the client by writing "Dispense as written (DAW)" on the prescription, and the pharmacist will dispense those nonpreferred drugs without prior authorization being required. The department is unable to quantify specific reductions in administrative burden (such as telephone calls), but anticipates that any associated costs of this program will be exceeded by the benefits that result from a significantly reduced need for prior authorization as TIP is implemented.

CONCLUSION: RCW 34.05.328 requires the administration to demonstrate that the probable benefits of a proposed exceed its probable costs. Based on the statements above, MAA concludes that the probable benefits of this proposed rule exceed the probable costs.

A copy of the statement may be obtained by contacting Siri Childs, P.O. Box 45506, Olympia, WA 98504, phone (360) 725-1564, fax (360) 586-8827, e-mail childsa@dshs.wa.gov.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Siri Childs, P.O. Box 45506, Olympia, WA 98504, phone (360) 725-1564, fax (360) 586-8827, e-mail childsa@dshs.wa.gov.

September 15, 2004

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

3467.1
AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1050   Definitions.   The following definitions and abbreviations and those found in WAC 388-500-0005, Medical definitions, apply to this chapter.

"Active ingredient" means the chemical component of a drug responsible for a drug's prescribed/intended therapeutic effect. The medical assistance administration (MAA) limits coverage of active ingredients to those with a national drug code (NDC) and those specifically authorized by MAA.

"Actual acquisition cost (AAC)" means the actual price a provider paid for a drug marketed in the package size of drug purchased, or sold by a particular manufacturer or labeler. Actual acquisition cost is calculated based on factors including, but not limited to:

(1) Invoice price, including other invoice-based considerations, such as prompt payment discounts;

(2) Order quantity and periodic purchase volume discount policies of suppliers (wholesalers and/or manufacturers);

(3) Membership/participation in purchasing cooperatives;

(4) Advertising and other promotion/display allowances, free merchandise deals; and

(5) Transportation or freight allowances.

"Administer" means the direct application of a prescription drug by injection, inhalation, ingestion, or any other means, to the body of a patient by a practitioner, or at the direction of the practitioner.

"Appointing authority" means, for the evidence-based prescription drug program of the participating agencies in the state-operated health care programs, the following persons acting jointly: the administrator of the health care authority (HCA), the secretary of the department of social and health services (DSHS), and the director of the department of labor and industries (L&I).

"Automated maximum allowable cost (AMAC)" means the rate established by the medical assistance administration (MAA) for a multiple-source drug that is not on the maximum allowable cost (MAC) list and that is designated by two or more products at least one of which must be under a federal drug rebate contract.

"Average wholesale price (AWP)" means the average price of a drug product that is calculated from wholesale prices nationwide at a point in time and reported to the medical assistance administration (MAA) by MAA's drug pricing file contractor.

"Certified average wholesale price (CAWP)" means the price certified by the First Data Bank to be the actual average wholesale price of an infusion, injectable, or inhalation drug marketed by a manufacturer or labeler who is subject to a consent order with the United States Department of Justice regarding the reporting of average wholesale price(s).

"Combination drug" means a commercially available drug including two or more active ingredients.

"Compendia of drug information" includes the following:

(1) The American Hospital Formulary Service Drug Information;

(2) The United States Pharmacopeia Drug Information; and

(3) DRUGDEX Information System.

"Compounding" means the act of combining two or more active ingredients or adjusting therapeutic strengths in the preparation of a prescription.

"Contract drugs" means drugs manufactured or distributed by manufacturers/labelers who signed a drug rebate agreement with the federal Department of Health and Human Services (DHHS).

"Deliver or delivery" means the transfer of a drug or device from one person to another.

"Dispense as written (DAW)" means an instruction to the pharmacist forbidding substitution of a generic drug or a therapeutically equivalent product for the specific drug product prescribed.

"Dispensing fee" means the fee the medical assistance administration (MAA) sets to reimburse pharmacy providers for dispensing MAA covered prescriptions. The fee is MAA's maximum reimbursement for expenses involved in the practice of pharmacy and is in addition to MAA's payment for the costs of covered ingredients.

(("Drug Evaluation Unit (DEU)" means a unit or group designated by the medical assistance administration (MAA) that makes drug coverage recommendations after studying the clinical and pharmacoeconomic attributes of drugs using the Academy of Managed Care Pharmacy drug review submission process. The DEU has physician and pharmacist staff and an advisory committee of actively practicing physicians and pharmacists.))

"Drug file" means a list of drug products, pricing and other information provided to the medical assistance administration's (MAA's) drug data base and maintained by a drug file contractor.

"Drug file contractor" also referred to as "drug pricing file contractor," means the entity which has contracted to provide the medical assistance administration (MAA), at specified intervals, the latest information and/or data base on drugs and related supplies produced, prepared, processed, packaged, labeled, distributed, marketed, or sold in the marketplace. Contractor-provided information includes, but is not limited to, identifying characteristics of the drug (national drug code, drug name, manufacturer/labeler, dosage form, and strength) for the purpose of identifying and facilitating payment for drugs billed to MAA.

"Drug rebates" means payments provided by pharmaceutical manufacturers to state Medicaid programs under the terms of the manufacturers' agreements with the Department of Health and Human Services.

"Drug-related supplies" means nondrug items necessary for the administration, delivery, or monitoring of a drug or drug regimen.

"Drug ((utilization)) use review (DUR)" means a review of covered outpatient drugs that assures prescriptions are appropriate, medically necessary, and not likely to result in adverse medical outcomes.

"Emergency kit" means a set of limited pharmaceuticals furnished to a nursing facility by the pharmacy that provides prescription dispensing services to that facility. Each kit is specifically set up to meet the emergency needs of each nursing facility's client population and is for use during those hours when pharmacy services are unavailable.

"Endorsing practitioner" means a practitioner who has reviewed the Washington preferred drug list (PDL) and has enrolled with the health care authority (HCA), agreeing to allow therapeutic interchange (substitution) of a preferred drug for any nonpreferred drug in a given therapeutic class on the Washington PDL.

"Estimated acquisition cost (EAC)" means the medical assistance administration's estimate of the price providers generally and currently pay for a drug marketed or sold by a particular manufacturer or labeler.

"Evidence-based practice center" means a research organization that has been designated by the Agency for Healthcare Research and Quality (AHRQ) of the U.S. government to conduct systematic reviews of all the evidence to produce evidence tables and technology assessments to guide health care decisions.

"Expedited prior authorization (EPA)" means the process for authorizing selected drugs in which providers use a set of numeric codes to indicate to the medical assistance administration (MAA) the acceptable indications, conditions, diagnoses, and criteria that are applicable to a particular request for drug authorization.

"Experimental drugs" means drugs the Food and Drug Administration (FDA) has not approved, or approved drugs when used for medical indications other than those listed by the FDA.

"Expired drug" means a drug for which the shelf life expiration date has been reached.

"Federal upper limit (FUL)" means the maximum allowable payment set by the Centers for Medicare and Medicaid Services (CMS) (formerly known as HCFA) for a multiple-source drug.

"Four brand name prescriptions per calendar month limit" means the maximum number of paid prescription claims for brand name drugs that MAA allows for each client in a calendar month without a complete review of the client's drug profile.

"Generic code number sequence number" means a number used by the medical assistance administration's drug file contractor to group together products that have the same ingredients, route of administration, drug strength, and dosage form. It is applied to all manufacturers and package sizes.

"Generic drug" means a nonproprietary drug that is required to meet the same bioequivalency tests as the original brand name drug.

"Inactive ingredient" means a drug component that remains chemically unchanged during compounding but serves as the:

(1) Necessary vehicle for the delivery of the therapeutic effect; or

(2) Agent for the intended method or rate of absorption for the drug's active therapeutic agent.

"Ingredient cost" means the portion of a prescription's cost attributable to the covered drug ingredients or chemical components.

"Less than effective drug" or "DESI" means a drug for which:

(1) Effective approval of the drug application has been withdrawn by the Food and Drug Administration (FDA) for safety or efficacy reasons as a result of the drug efficacy study implementation (DESI) review; or

(2) The secretary of the department of health and human services (DHHS) has issued a notice of an opportunity for a hearing under section 505(e) of the federal Food, Drug, and Cosmetic Act on a proposed order of the secretary to withdraw approval of an application for such drug under such section because the secretary has determined the drug is less than effective for some or all conditions of use prescribed, recommended, or suggested in its labeling.

"Long-term therapy" means a drug regimen a client receives or will receive continuously through and beyond ninety days.

"MAA preferred drug list (PDL)" means the medical assistance administration's (MAA's) list of drugs of choice within selected therapeutic drug classes.

"Maximum allowable cost (MAC)" means the maximum amount that the medical assistance administration pays for a specific dosage form and strength of a multiple-source drug product.

"Medically accepted indication" means any use for a covered outpatient drug:

(1) Which is approved under the federal Food, Drug, and Cosmetic Act; or

(2) The use of which is supported by one or more citations included or approved for inclusion in any of the compendia of drug information, as defined in this chapter.

"Modified unit dose delivery system" (also known as blister packs or "bingo/punch cards") means a method in which each patient's medication is delivered to a nursing facility:

(1) In individually sealed, single dose packages or "blisters"; and

(2) In quantities for one month's supply, unless the prescriber specifies a shorter period of therapy.

"Multiple-source drug" means a drug marketed or sold by:

(1) Two or more manufacturers or labelers; or

(2) The same manufacturer or labeler:

(a) Under two or more different proprietary names; or

(b) Under a proprietary name and a generic name.

"National drug code (NDC)" means the eleven-digit number the manufacturer or labeler assigns to a pharmaceutical product and attaches to the product container at the time of packaging. The NDC is composed of digits in 5-4-2 groupings. The first five digits comprise the labeler code assigned to the manufacturer by the Food and Drug Administration (FDA). The second grouping of four digits is assigned by the manufacturer to describe the ingredients, dose form, and strength. The last grouping of two digits describes the package size.

"Noncontract drugs" are drugs manufactured or distributed by manufacturers/labelers who have not signed a drug rebate agreement with the federal Department of Health and Human Services.

"Nonpreferred drug" means a drug that has not been selected as a preferred drug within the therapeutic class(es) of drugs on the preferred drug list.

"Obsolete NDC" means a national drug code replaced or discontinued by the manufacturer or labeler.

"Over-the-counter (OTC) drugs" means drugs that do not require a prescription before they can be sold or dispensed.

"Peer reviewed medical literature" means a research study, report, or findings regarding the specific use of a drug that has been submitted to one or more professional journals, reviewed by experts with appropriate credentials, and subsequently published by a reputable professional journal. A clinical drug study used as the basis for the publication must be a double blind, randomized, placebo or active control study.

"Pharmacist" means a person licensed in the practice of pharmacy by the state in which the prescription is filled.

"Pharmacy" means every location licensed by the State Board of Pharmacy in the state where the practice of pharmacy is conducted.

"Point-of-sale (POS)" means a pharmacy claims processing system capable of receiving and adjudicating claims on-line.

"Practice of pharmacy" means the practice of and responsibility for:

(1) Accurately interpreting prescription orders;

(2) Compounding drugs;

(3) Dispensing, labeling, administering, and distributing of drugs and devices;

(4) Providing drug information to the client that includes, but is not limited to, the advising of therapeutic values, hazards, and the uses of drugs and devices;

(5) Monitoring of drug therapy and use;

(6) Proper and safe storage of drugs and devices;

(7) Documenting and maintaining records;

(8) Initiating or modifying drug therapy in accordance with written guidelines or protocols previously established and approved for a pharmacist's practice by a practitioner authorized to prescribe drugs; and

(9) Participating in drug utilization reviews and drug product selection.

"Practitioner" means an individual who has met the professional and legal requirements necessary to provide a health care service, such as a physician, nurse, dentist, physical therapist, pharmacist or other person authorized by state law as a practitioner.

"Preferred drug" means ((MAA's)) drug(s) of choice within a selected therapeutic class that are selected based on clinical evidence of safety, efficacy, and effectiveness.

"Prescriber" means a physician, osteopathic physician/surgeon, dentist, nurse, physician assistant, optometrist, pharmacist, or other person authorized by law or rule to prescribe drugs. See WAC 246-863-100 for pharmacists' prescriptive authority.

"Prescription" means an order for drugs or devices issued by a practitioner authorized by state law or rule to prescribe drugs or devices, in the course of the practitioner's professional practice, for a legitimate medical purpose.

"Prescription drugs" means drugs required by any applicable federal or state law or regulation to be dispensed by prescription only or that are restricted to use by practitioners only.

"Prior authorization program" means a medical assistance administration (MAA) program, subject to the requirements of 42 U.S.C. 1396r-8 (d)(5), that may require, as a condition of payment, that a drug on MAA's drug file be prior authorized. See WAC 388-530-1200.

"Prospective drug ((utilization)) use review (Pro-DUR)" means a process in which a request for a drug product for a particular client is screened, before the product is dispensed, for potential drug therapy problems.

"Reconstitution" means the process of returning a single active ingredient, previously altered for preservation and storage, to its approximate original state. Reconstitution is not compounding.

"Retrospective drug ((utilization)) use review (Retro-DUR)" means the process in which client's drug utilization is reviewed on a periodic basis to identify patterns of fraud, abuse, gross overuse, or inappropriate or unnecessary care.

"Risk/benefit ratio" means the result of assessing the side effects of a drug or drug regimen compared to the positive therapeutic outcome of therapy.

"Single source drug" means a drug produced or distributed under an original new drug application approved by the Food and Drug Administration (FDA).

"Substitute" means to replace a prescribed drug, with the prescriber's authorization, with:

(1) An equivalent generic drug product of the identical base or salt as the specific drug product prescribed; or

(2) A therapeutically equivalent drug other than the identical base or salt.

"Systematic review" means a specific and reproducible method to identify, select, and appraise all the studies that meet minimum quality standards and are relevant to a particular question. The results of the studies are then analyzed and summarized into evidence tables to be used to guide evidence-based decisions.

"TCS" See "therapeutic consultation service."

"Terminated NDC" means a national drug code (NDC) that is discontinued by the manufacturer for any reason. The NDC may be terminated immediately due to health or safety issues or it may be phased out based on the product's shelf life.

"Therapeutic alternative" means a drug product that contains a different chemical structure than the drug prescribed, but is in the same pharmacologic or therapeutic class and can be expected to have a similar therapeutic effect and adverse reaction profile when administered to patients in a therapeutically equivalent dosage.

"Therapeutic class" means a group of drugs used for the treatment, remediation, or cure of a specific disorder or disease.

"Therapeutic consultation service (TCS)" means the prescriber and a medical assistance administration (MAA) designated clinical pharmacist jointly review prescribing activity when drug claims for a medical assistance client exceed program limitations.

"Therapeutic interchange" means to dispense a therapeutic alternative to the prescribed drug when an endorsing practitioner who has indicated that substitution is permitted, prescribes the drug. See Therapeutic interchange program (TIP).

"Therapeutic interchange program (TIP)" means the process developed by participating state agencies under RCW 69.41.190 and 70.14.050, to allow prescribers to endorse a Washington preferred drug list, and in most cases, required pharmacists to automatically substitute a preferred, equivalent drug from the list.

"Therapeutically equivalent" means drug products that contain different chemical structures but have the same efficacy and safety when administered to an individual, as determined by:

(1) Information from the Food and Drug Administration (FDA);

(2) Published and peer-reviewed scientific data;

(3) Randomized controlled clinical trials; or

(4) Other scientific evidence.

"Tiered dispensing fee system" means a system of paying pharmacies different dispensing fee rates, based on the individual pharmacy's total annual prescription volume and/or the drug delivery system used.

"True unit dose delivery" means a method in which each patient's medication is delivered to the nursing facility in quantities sufficient only for the day's required dosage.

"Unit dose drug delivery" means true unit dose or modified unit dose delivery systems.

"Usual and customary charge" means the fee that the provider typically charges the general public for the product or service.

"Washington preferred drug list (Washington PDL)" means the list of drugs selected by the appointing authority to be used by applicable state agencies as the basis for purchase of drugs in state-operated health care programs.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1050, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-24-066, 388-530-1050, filed 11/30/01, effective 1/2/02; 01-01-028, 388-530-1050, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1050, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1100   Covered drugs, devices, and pharmaceutical supplies.   (1) The medical assistance administration (MAA) covers medically necessary drugs, devices, and pharmaceutical supplies when they are prescribed for medically accepted indications, subject to the restrictions described in this section and other published WAC. For exceptions to the prescription requirement, see subsection (4) of this section.

(2) MAA reimburses a provider for medically necessary drugs only when the manufacturer has a signed drug rebate agreement with the federal Department of Health and Human Services (DHHS). Exceptions to the drug rebate requirement are described in WAC 388-530-1125 which describes the drug rebate program.

(3) MAA covers the following medically necessary drugs, devices, and supplies:

(a) Outpatient drugs, generic or brand name.

(b) Over-the-counter (OTC) drugs when the drug:

(i) Is prescribed by a provider with prescribing authority (see exceptions in subsection (4) of this section);

(ii) Is not excluded from coverage under WAC 388-530-1150;

(iii) Is a less costly therapeutic alternative; and

(iv) Does not require prior authorization.

(c) Drugs requiring prior authorization when:

(i) Prior authorized by MAA; or

(ii) They meet MAA's published expedited prior authorization (EPA) criteria and the dispensing pharmacist follows the EPA process described in WAC 388-530-1250(4).

(d) Oral, topical and/or injectable drugs, vaccines for immunizations, and biologicals, prepared or packaged for individual use.

(e) Drugs with obsolete national drug codes (NDCs) for up to two years from the date the NDC is designated obsolete, unless the drug is expired as defined in WAC 388-530-1050.

(f) Drugs and supplies used in conjunction with family planning under subsection (4) of this section and under chapter 388-532 WAC, including drugs dispensed for emergency contraception and nonprescribed OTC contraceptive supplies.

(g) Drugs, devices, and supplies provided under unusual and extenuating circumstances to clients by providers who request and receive MAA approval.

(h) Drug-related supplies as determined in consultation with federal guidelines.

(i) Preferred drugs in drug classes on the preferred drug list(s), according to WAC 388-530-1280.

(4) MAA covers family planning drugs, devices, and supplies per chapter 388-532 WAC and as follows:

(a) MAA covers certain over-the-counter (OTC) family planning drugs, devices, and supplies without a prescription when they meet the criteria of WAC 388-530-1200(3); ((and))

(b) MAA may cover family planning drugs that do not meet the federal drug rebate requirement in WAC 388-530-1125 on a case-by-case basis, under the provisions of subsection (6) of this section; and

(c) MAA covers contraceptive patches, contraceptive rings, and oral contraceptives (excluding emergency contraceptive pills, which are not subject to the at-least-three-month supply limitation), only when dispensed in at least a three-month supply, unless otherwise directed by the prescriber.

(5) MAA determines if certain drugs are medically necessary and covered with or without restrictions based on evidence contained in compendia of drug information and peer-reviewed medical literature.

(a) Decisions regarding restrictions are based on, but are not limited to:

(i) Client safety;

(ii) FDA-approved indications;

(iii) Quantity;

(iv) Client age and/or gender; and

(v) Cost.

(b) Restrictions ((apply)) and limitations may include, but are not limited to:

(i) Exclusion of drugs covered in the nursing facility per diem rate;

(ii) Number of refills within a calendar month; ((and))

(iii) Refills requested before seventy-five percent of the previously dispensed supply is scheduled to be exhausted; and

(iv) Quantity and days-supply dispensed.

(6) MAA evaluates requests for drugs, devices, and pharmaceutical supplies that are subject to limitations or other restrictions in this chapter on a case-by-case basis. MAA approves the requested services that are beyond the stated limits or restrictions of this chapter when MAA determines that the services are medically necessary, under subsection (5) of this section and under the standards for covered services in WAC 388-501-0165.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1100, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1100, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1100, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1125   Drug rebate program.   The medical assistance administration (MAA) covers only those outpatient prescription drugs and over-the-counter (OTC) drugs supplied by manufacturers who have a drug rebate contract with the Department of Health and Human Services (DHHS)((. MAA may make exceptions to the drug rebate requirement based on medical necessity on a case-by-case basis. Exceptions to this requirement must be prior authorized by MAA)), according to 42 U.S.C. 1396r-8. MAA may exempt the following from the drug rebate requirement in WAC 388-530-1100(2):

(1) Family planning drugs as provided by WAC 388-530-1100(4); and

(2) Other drugs approved under WAC 388-501-0165.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1125, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-029, 388-530-1125, filed 12/7/00, effective 1/7/01.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1150   Noncovered drugs and pharmaceutical supplies and reimbursement limitations.   (1) The medical assistance administration (MAA) does not cover:

(a) Brand or generic drugs, when the manufacturer has not signed a rebate agreement with the federal Department of Health and Human Services. Refer to WAC 388-530-1125 for information on the drug rebate program.

(b) A drug prescribed:

(i) For weight loss or gain;

(ii) For infertility, frigidity, impotency, or sexual dysfunction;

(iii) For cosmetic purposes or hair growth; or

(iv) To promote ((smoking)) tobacco cessation, except as described in WAC ((388-533-0400(21), smoking)) 388-533-0345 (3)(d) tobacco cessation for pregnant women.

(c) Over-the-counter (OTC) drugs and supplies, except as described under WAC 388-530-1100.

(d) Prescription vitamins and mineral products, except:

(i) When prescribed for clinically documented deficiencies;

(ii) Prenatal vitamins, only when prescribed and dispensed to pregnant women; or

(iii) Fluoride preparations for children under the early and periodic screening, diagnosis, and treatment (EPSDT) program.

(e) A drug prescribed for an indication that is not evidence based as determined by:

(i) MAA in consultation with federal guidelines; or

(ii) The Drug ((Utilization and Education (DUE) Council)) Use Review (DUR) board; and

(iii) MAA medical consultants and MAA pharmacist(s).

(f) Drugs listed in the federal register as "less-than-effective" ("DESI" drugs) or which are identical, similar, or related to such drugs.

(g) Drugs that are:

(i) Not approved by the Food and Drug Administration (FDA); or

(ii) Prescribed for non-FDA approved indications or dosing, unless prior authorized; or

(iii) Unproven for efficacy or safety.

(h) Outpatient drugs for which the manufacturer requires as a condition of sale that associated tests or monitoring services be purchased exclusively from the manufacturer or manufacturer's designee.

(i) Drugs requiring prior authorization for which MAA authorization has been denied.

(j) Preservatives, flavoring and/or coloring agents.

(k) Less than a one-month supply of drugs for long-term therapy.

(l) A drug with an obsolete National Drug Code (NDC) more than two years from the date the NDC is designated obsolete by the manufacturer.

(m) Products or items that do not have an eleven-digit NDC.

(n) Nonpreferred drugs when a therapeutic equivalent is on the preferred drug list(s) (PDL), according to WAC 388-530-1100, 388-530-1280, and 388-530-1290.

(o) Less than a three-month supply of contraceptive patches, contraceptive rings, or oral contraceptives (excluding emergency contraceptive pills), unless otherwise directed by the prescriber.

(2) MAA does not reimburse enrolled providers for:

(a) Outpatient drugs, biological products, insulin, supplies, appliances, and equipment included in other reimbursement methods including, but not limited to:

(i) Diagnosis-related group (DRG);

(ii) Ratio of costs-to-charges (RCC);

(iii) Nursing facility per diem;

(iv) Managed care capitation rates;

(v) Block grants; or

(vi) Drugs prescribed for clients who are on the MAA hospice program when the drugs are related to the client's terminal condition.

(b) Any drug regularly supplied as an integral part of program activity by other public agencies (e.g., immunization vaccines for children).

(c) Prescriptions written on pre-signed prescription blanks filled out by nursing facility operators or pharmacists. MAA may terminate the core provider agreement of pharmacies involved in this practice.

(d) Drugs used to replace those taken from nursing facility emergency kits.

(e) Drugs used to replace a physician's stock supply.

(f) Free pharmaceutical samples.

(g) A drug product after the product's national drug code (NDC) termination date.

(h) A drug product whose shelf life has expired.

(3) MAA evaluates each request for a noncovered drug under WAC 388-530-1100(5) and under the provisions of WAC 388-501-0165.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1150, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1150, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1150, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1200   Prior authorization program.   (1) The medical assistance administration (MAA) pharmacist(s), medical consultants, and drug utilization review team evaluate drugs to determine prior authorization status on the drug file. MAA may consult with ((a drug evaluation unit, the Drug Utilization and Education (DUE) Council)) an evidence-based practice center, the Drug Use Review (DUR) Board, and/or participating MAA providers in this evaluation.

(2) To facilitate the evaluation process for a drug product, a drug manufacturer may send the MAA pharmacist(s) a written request and the following supporting documentation:

(a) Background data about the drug;

(b) Product package information;

(c) Any pertinent clinical studies;

(d) Outcome and effectiveness data using the Academy of Managed Care Pharmacy's drug review submission process; and

(e) Any additional information the manufacturer considers appropriate.

(3) MAA evaluates a drug based on, but not limited to, the following criteria:

(a) Whether the manufacturer has signed a federal drug rebate agreement except as specified in WAC 388-530-1125;

(b) Whether the drug is a less-than-effective drug;

(c) The drug's risk/benefit ratio;

(d) Whether like drugs are on MAA's drug file list and there are less costly therapeutic alternative drugs;

(e) Whether the drug falls into one of the categories authorized by federal law to be excluded from coverage;

(f) The drug's potential for abuse; and

(g) Whether outcome data demonstrate that the drug is cost effective.

(4) MAA updates and reviews the drug file list as necessary and periodically publishes a list of drugs not requiring prior authorization.

(5) Manufacturers may seek review of MAA's prior authorization decisions by writing to MAA's chief medical officer.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1200, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1200, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1200, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1250   Prior authorization process.   (1) The medical assistance administration (MAA) requires pharmacies to obtain prior authorization for:

(a) Drugs with a prior authorization indicator on the MAA drug file list;

(b) Drugs that exceed specific dosage or unit limits as indicated by the Food and Drug Administration (FDA); ((and))

(c) Additional fills in a calendar month for drugs dispensed for a less than thirty-four day supply when:

(i) Two fills for the same prescription have been dispensed, except for:

(A) Over-the-counter (OTC) contraceptives; or

(B) Drugs prescribed to a suicidal patient or a patient at risk for potential drug abuse; or

(ii) Four fills in the same calendar month for the same prescription have been dispensed for any of the following:

(A) Antibiotics;

(B) Anti-asthmatics;

(C) Schedule II and III drugs;

(D) Antineoplastic agents;

(E) Topical preparations; or

(F) Propoxyphene, propoxyphene napsylate, and all propoxyphene combinations.

(d) A nonpreferred drug in a drug class on the Washington PDL when the prescription is received from a nonendorsing practitioner, according to WAC 388-530-1290; and

(e) A nonpreferred drug in a drug class that is not on the Washington PDL and is not subject to TIP, when the prescription is received from an endorsing or a nonendorsing practitioner, according to WAC 388-530-1280.

(2) The pharmacy provider must make a request to MAA for a drug requiring prior authorization before dispensing the drug. The pharmacy provider must:

(a) Ensure the request states the medical diagnosis and includes medical justification for the drug; and

(b) Keep on file documentation of the prescriber's medical justification that is communicated to the pharmacy by the prescriber at the time the prescription is filled. The records must be retained for the period specified in WAC 388-502-0020 (1)(c).

(3) MAA evaluates a request for prior authorization based on, but not limited to:

(a) Requirements in this section;

(b) Requirements under WAC 388-530-1000, 388-530-1150, and 388-501-0165; and

(c) The least costly alternative between two or more products of equal effectiveness.

(4) MAA authorizes certain prescribed drugs through a process called "expedited prior authorization (EPA)." MAA determines which drugs can be authorized through the EPA process by using factors ((which)) that include, but are not limited to:

(a) Product cost;

(b) Potential for clinical misuse;

(c) Narrow therapeutic indication; and

(d) Safety concerns.

(5) MAA may authorize reimbursement at the brand name estimated acquisition cost (EAC) for a brand name multiple-source drug that would have been reimbursed at the maximum allowable cost (MAC) for that multiple-source drug, if:

(a) The pharmacist calls for prior authorization; and

(b) The prescriber indicates:

(i) "Dispense as written" on the prescription; and

(ii) That a specific brand is "medically necessary" for a particular client; or

(c) The availability of generic equivalents in the marketplace is severely curtailed and the price disparity between the brand name EAC and the generic MAC reimbursement affects clients' access to the medication.

(6) MAA provides a response, by telephone or other telecommunication device, within twenty-four hours of a request for drugs that require prior authorization, if the request is received during normal state business hours. If a provider needs prior authorization to dispense a drug during a weekend or Washington state holiday, the provider may dispense the drug without prior authorization only when:

(a) Given in an emergency;

(b) MAA receives justification within seventy-two hours of the fill date, excluding weekends and Washington state holidays; and

(c) MAA agrees with the justification and approves the request.

(7) MAA's prior authorization:

(a) Is limited to a decision of medical appropriateness for a drug; and

(b) Does not guarantee payment.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1250, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1250, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1250, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 01-24-066, filed 11/30/01, effective 1/2/02)

WAC 388-530-1260   Therapeutic consultation service.   (1) The medical assistance administration (MAA) provides a therapeutic consultation service (TCS) to aid appropriate utilization of prescription drugs, improve quality of care and health care outcomes for medical assistance clients, and promote cost effectiveness.

(2) A TCS review occurs when a drug claim((:

(a))) exceeds the four-brand-name-prescriptions-per calendar-month limit((; or

(b) Is for a nonpreferred drug within selected therapeutic classes)). The exceptions to this are:

(a) When the brand-name drug is a preferred drug on the Washington Preferred Drug List (PDL) (preferred brand-name drugs on the Washington PDL do not count against the limit); or

(b) When an endorsing practitioner indicates dispense as written (DAW) for a nonpreferred drug. Nonpreferred drugs do not count against the limit in these cases. However, if a nonendorsing practitioner indicates DAW for a nonpreferred drug, the nonpreferred drug counts against the limit and requires prior authorization, regardless of the DAW indication. See WAC 388-530-1290.

(3) Through TCS, MAA((:

(a))) provides a complete drug profile review for each client whose claims exceed four brand name prescriptions in a calendar month. MAA excludes the following from the four brand name prescriptions per calendar month limit:

(((i))) (a) Generic drugs; and

(((ii))) (b) The following drugs:

(((A))) (i) Antidepressants;

(((B))) (ii) Antipsychotics;

(((C))) (iii) Chemotherapy;

(((D))) (iv) Contraceptives;

(((E))) (v) HIV;

(((F))) (vi) Immunosuppressants; and

(((G))) (vii) Hypoglycemia rescue agents.

(((b) Publishes a list of preferred drugs within selected therapeutic classes. MAA chooses a drug or drugs from a selected therapeutic class for placement on the preferred list when:

(i) The drugs in the class are essentially equal in terms of safety and efficacy; and

(ii) The selected drug or drugs may be the least costly in the therapeutic class.))

(4) When a pharmacy provider submits a claim that exceeds ((TCS limitations)) the four-brand-name-prescriptions-per-calendar-month limitation for a client, MAA notifies the pharmacy provider that a TCS review is required.

(5) The TCS review process includes all of the following:

(a) Pharmacy provider requirements:

(i) The pharmacy provider notifies the prescriber that the prescriber or prescriber designee must call the TCS toll-free telephone number to begin a TCS review according to subsection (2) of this section; and

(ii) If the TCS review cannot take place due to the prescriber's or prescriber designee's unavailability, the pharmacy provider has the option to dispense an emergency supply of the requested drug only when:

(A) Given in an emergency;

(B) MAA receives justification within seventy-two hours of the fill date, excluding weekends and Washington state holidays; and

(C) MAA agrees with the justification and approves the request.

(b) Prescriber requirements:

(i) When the pharmacy provider contacts the client's prescriber as described in subsection (5)(a)(i) of this section, the prescriber or prescriber designee ((contacts)) calls the TCS toll-free telephone number to contact the MAA designee (MAA-designated clinical pharmacist) to begin a TCS review;

(ii) After the prescriber or prescriber designee and the MAA designee review the client's drug profile and discuss clinically sound options and cost effective alternative drug(s), the prescriber does one of the following:

(A) Changes the prescription to an alternate drug or preferred drug and contacts the client's pharmacy with the new prescription;

(B) Provides the MAA designee with medical justification for the requested drug and the MAA designee authorizes the drug under the provisions of medical necessity as defined in WAC 388-500-0005; or

(C) Does not agree to prescribe an alternate drug or preferred drug and does not provide medical justification for the requested drug, then:

(I) The MAA designee authorizes only a one-month supply of the requested drug with no refills and sends the initiating prescriber a copy of the client's drug profile and a therapy authorization turnaround form;

(II) The prescriber signs the therapy authorization turnaround form and returns it to the MAA designee; and

(III) Upon receipt of the therapy authorization turnaround form, the MAA designee authorizes ((six additional)) up to twelve months of the requested drug.

(c) MAA designee responsibilities:

(i) Notifies the following by facsimile, electronic mail, or telephone call, the results of the TCS review:

(A) Prescriber; and

(B) Pharmacy provider((; and

(C) MAA for notification to the client. When the TCS indicates a need for a change, limitation, or denial of the requested drug, MAA notifies the client according to WAC 388-501-0165(7))).

(ii) Notifies MAA clinical program staff when concerns for client safety are identified during the TCS reviews. See WAC 388-530-1100(2) for how MAA determines restrictions on drug coverage based on, but not limited to, client safety.

(iii) Contacts other prescribers identified during the TCS review when opportunities to further improve the client's healthcare outcome are discovered.

(((6) A client who does not agree with a TCS decision has a right to a fair hearing under chapter 388-02 WAC. After receiving a request for a fair hearing, MAA may request additional information from the client, the prescriber, or the pharmacy provider. After MAA reviews the available information, the result may be:

(a) A reversal of the initial department decision;

(b) Resolution of the client's issue(s); or

(c) A fair hearing conducted per chapter 388-02 WAC.))

[Statutory Authority: RCW 74.08.090, 74.04.050. 01-24-066, 388-530-1260, filed 11/30/01, effective 1/2/02.]


AMENDATORY SECTION(Amending WSR 03-05-043, filed 2/13/03, effective 3/16/03)

WAC 388-530-1270   Mail-order services.   The medical assistance administration (MAA) provides a contracted mail-order pharmacy service for client use. The mail-order contractor is selected as a result of a competitive procurement process.

(1) The contracted mail-order pharmacy service is available as an option to all medical assistance clients, subject to the:

(a) Scope of the client's medical care program;

(b) Availability of services from the contracted mail-order provider; and

(c) Special terms and conditions described in subsection (2) and (3) of this section.

(2) The mail-order prescription service may not dispense medication in a quantity greater than authorized by the prescriber. (See RCW 18.64.360(5), Nonresident pharmacies.)

(3) Prescribed medications may be filled by the mail-order pharmacy service within the following restrictions:

(a) Drugs available from mail-order in no more than a ninety day supply include:

(i) Preferred drugs (see WAC ((388-530-1260)) 388-530-1280);

(ii) Generic drugs; and,

(iii) Drugs that do not require prior authorization or expedited prior authorization (see WAC 388-530-1200 and 388-530-1250).

(b) Drugs available in no more than a thirty-four-day supply:

(i) Controlled substances (schedules II through V); and

(ii) Drugs requiring prior authorization or expedited prior authorization (see WAC 388-530-1200).

(c) Other pharmacy restrictions (chapter 388-530 WAC, Pharmacy services) continue to apply.

(4) The contracted mail-order pharmacy services are reimbursed at levels lower than those established for the regular outpatient pharmacy services.

[Statutory Authority: RCW 74.08.090, 74.09.510, and 2002 c 371 (2001-03 Revised Omnibus Operating Budget - 2002 Supp.). 03-05-043, 388-530-1270, filed 2/13/03, effective 3/16/03.]


NEW SECTION
WAC 388-530-1280   Preferred drug list(s).   This section contains the medical assistance administration's (MAA) rules for preferred drug list(s) (PDL). Under RCW 69.41.090 and 70.14.050, MAA and other state agencies cooperate in developing and maintaining preferred drug list(s).

(1) The Washington preferred drug list (PDL):

(a) Washington state contracts with evidence-based practice center(s) for systematic reviews of drug(s).

(b) The Pharmacy and Therapeutics (P&T) Committee reviews and evaluates the safety, efficacy, and outcomes of prescribed drugs, using evidence-based information provided by the evidence-based practice center(s).

(c) The P&T committee makes recommendations to state agencies as to which drug(s) to include on the Washington PDL, under chapter 182-50 WAC.

(d) The appointing authority makes the final selection of drugs included on the Washington PDL.

(d) Nonpreferred drugs within a therapeutic class on the Washington PDL are subject to the Therapeutic Interchange Program (TIP) according to WAC 388-530-1290.

(2) The medical assistance administration's (MAA's) PDL. Drugs on MAA's PDL:

(a) Are not part of the Washington PDL;

(b) Are not subject to TIP; and

(c) Continue to require prior authorization when they are designated as nonpreferred.

(3) Combination drugs that are not on the Washington PDL, that are not reviewed by the evidence-based practice center(s), and that are not subject to TIP under WAC 388-530-1290, are considered for coverage according to MAA's prior authorization program.

[]

Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 388-530-1290   Therapeutic interchange program (TIP).   This section contains the medical assistance administration's (MAA) rules for the Endorsing Practitioner Therapeutic Interchange Program (TIP). TIP is established under RCW 69.41.190 and 70.14.050. The statutes require state-operated prescription drug programs to allow physicians and other prescribers to endorse a Washington preferred drug list (PDL) and, in most cases, requires pharmacists to automatically substitute a preferred, equivalent drug from the list.

(1) The Therapeutic Interchange Program (TIP) applies only to drugs within therapeutic classes on the Washington PDL that are prescribed by an endorsing practitioner. TIP does not apply to other drugs that require MAA's prior authorization or to other program limitations.

(2) A practitioner who wishes to become an endorsing practitioner must specifically enroll with the health care authority (HCA) as such, under the provisions of chapter 182-50 WAC.

(3) When an endorsing practitioner writes a prescription for an MAA client for a nonpreferred drug and indicates that substitution is permitted, the pharmacist must:

(a) Dispense the preferred drug in that therapeutic class in place of the nonpreferred drug. In the event that more than one preferred drug in that therapeutic class is on the Washington PDL, dispense one of the preferred drugs in place of the nonpreferred drug; and

(b) Notify the endorsing practitioner of the specific drug and dose dispensed.

(4) When an endorsing practitioner determines that a nonpreferred drug is medically necessary, all of the following apply:

(a) The practitioner must indicate that the prescription is to be dispensed as written (DAW);

(b) The filling pharmacist dispenses the nonpreferred drug as prescribed; and

(c) MAA does not require prior authorization to dispense the nonpreferred drug.

(5) In the event the following therapeutic drug classes are on the Washington PDL, pharmacists will not substitute a preferred drug for a nonpreferred drug in these therapeutic drug classes when the endorsing practitioner prescribes a refill (including the renewal of a previous prescription or adjustments in dosage):

(a) Antipsychotic;

(b) Antidepressant;

(c) Chemotherapy;

(d) Antiretroviral; or

(e) Immunosuppressive.

(6) When a pharmacist fills a prescription from a nonendorsing practitioner for an MAA client and the prescription is for a nonpreferred drug, the pharmacist must obtain prior authorization from MAA or its designee to dispense the nonpreferred drug.

[]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1400   Maximum allowable cost (MAC) methodology.   (1) The medical assistance administration (MAA) establishes a maximum allowable cost (MAC) for a multiple-source drug which is available from at least two manufacturers/labelers.

(2) MAA determines the MAC for a multiple-source drug by:

(a) When drug wholesalers make acquisition cost data available to MAA, MAA:

(i) Identifies what products are available from wholesalers for each MAC drug;

(ii) Determines pharmacy subscribers' approximate acquisition costs for these products;

(iii) Ranks the products in descending order by approximate acquisition cost; and

(iv) Establishes the MAC at a level which gives pharmacists access to one product from a manufacturer with a qualified rebate agreement (see WAC 388-530-1125).

(b) When drug wholesalers do not make acquisition cost data available to MAA, MAA may set a MAC for a drug in the same manner described in WAC 388-530-1350 (1)(b).

(3) The MAC established for a multiple-source drug does not apply if the written prescription identifies that a specific brand is medically necessary for a particular client. In such cases, the estimated acquisition cost (EAC) for the particular brand applies, provided prior authorization is obtained from MAA as specified under WAC 388-530-1250(5), Prior authorization.

(4) Except as provided in subsection (3) of this section, MAA reimburses providers for a multiple-source drug at the lowest of the rates calculated under the methods listed in WAC 388-530-1300(1).

(5) The MAC established for a multiple-source drug applies to all package sizes of that drug, including those identified as unit dose National Drug Codes (NDCs) by the manufacturer(s) of the drug.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1400, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-029, 388-530-1400, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1400, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1900   Drug ((utilization)) use and claims review.   (1) The medical assistance administration's (MAA's) drug ((utilization)) use review (DUR) consists of:

(a) A prospective drug ((utilization)) use review (Pro-DUR) that requires all pharmacy providers to:

(i) Obtain patient histories of allergies, idiosyncrasies, or chronic condition(s) which may relate to drug utilization;

(ii) Screen for potential drug therapy problems; and

(iii) Counsel the patient in accordance with existing state pharmacy laws and federal regulations; and

(b) A retrospective drug ((utilization)) use review (Retro-DUR), in which MAA provides for the ongoing periodic examination of claims data and other records in order to identify patterns of fraud, abuse, gross overuse, or inappropriate or medically unnecessary care among physicians, pharmacists, and individuals receiving benefits.

(2) MAA performs a periodic sampling of claims to determine if drugs are appropriately dispensed and billed. If a review of the sample finds that a provider is inappropriately dispensing or billing for drugs, MAA may implement corrective action that includes, but is not limited to:

(a) Educating the provider regarding the problem practice(s);

(b) Requiring the provider to maintain specific documentation in addition to the normal documentation requirements regarding the provider's dispensing or billing actions;

(c) Recouping the payment for the drug(s); and/or

(d) Terminating the provider's core provider agreement.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1900, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1900, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, 388-530-1900, filed 10/9/96, effective 11/9/96.]


AMENDATORY SECTION(Amending WSR 02-17-023, filed 8/9/02, effective 9/9/02)

WAC 388-530-1950   Point-of-sale (POS) system/prospective drug ((utilization)) use review (Pro-DUR).   (1) Pharmacy claims for drugs and other products listed in the medical assistance administration (MAA) drug file list and billed to MAA by National Drug Code (NDC) are adjudicated by the MAA point-of-sale (POS) system. Claims must be submitted for payment using the billing unit standard identified in WAC 388-530-1800.

(2) All pharmacy drug claims processed through the POS system undergo a system-facilitated prospective drug ((utilization)) use review (Pro-DUR) screening as a complement to the Pro-DUR screening required of pharmacists.

(3) If the MAA POS system identifies a potential drug therapy problem during Pro-DUR screening, a message will alert the pharmacy provider indicating the type of potential problem.

The alerts regarding possible drug therapy problems include, but are not limited to:

(a) Therapeutic duplication;

(b) Duration of therapy exceeds the recommended maximum period;

(c) Drug-to-drug interaction;

(d) Drug disease precaution;

(e) High dose;

(f) Ingredient duplication;

(g) Drug-to-client age conflict;

(h) Drug-to-client gender conflict; or

(i) Refill too soon.

(4) MAA provides pharmacy providers with a list of codes from which to choose in overriding MAA POS system alert messages. The override codes come from the national council for prescription drug programs (NCPDP).

(5) The dispensing pharmacist evaluates the potential drug therapy conflict and chooses one of the following:

(a) If the conflict is resolved, the pharmacy may process the claim using the applicable NCPDP override code.

(b) If the conflict is not resolved, MAA requires prior authorization. This includes all claims for which an alert message is triggered in the POS system and an NCPDP override code is not appropriate.

(6) MAA requires providers to retain documentation of the justification for the use of payment system override codes as described in subsections (4) and (5) of this section. MAA requires the documentation be retained for the same period as that described in WAC 388-502-0020.

(7) POS/Pro-DUR screening is not applicable to pharmacy claims included in the managed care capitated rate.

[Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, 388-530-1950, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, 388-530-1950, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-08-018 (Order 3960), 388-530-1950, filed 3/26/96, effective 4/26/96.]

Legislature Code Reviser 

Register

Washington State Code Reviser's Office