SOCIAL AND HEALTH SERVICES
(Health and Recovery Services Administration)
Preproposal statement of inquiry was filed as WSR 07-04-017.
Title of Rule and Other Identifying Information: Part 1 of 4: WAC 388-530-1000 Outpatient drug program -- General and 388-530-1050 Definitions.
Hearing Location(s): Blake Office Park East, Rose Room,
4500 10th Avenue S.E., Lacey, WA 98503 (one block north of the intersection of Pacific Avenue S.E. and Alhadeff Lane. A map or directions are available at http://www1.dshs.wa.gov/msa/rpau/docket.html or by calling (360) 664-6097), on June 26, 2007, at 10:00 a.m.
Date of Intended Adoption: Not earlier than June 27, 2007.
Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA 98503, e-mail firstname.lastname@example.org, fax (360) 664-6185, by 5:00 p.m. on June 26, 2007.
Assistance for Persons with Disabilities: Contact Stephanie Schiller, by June 19, 2007, TTY (360) 664-6178 or (360) 664-6097 or by e-mail at email@example.com.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The health and recovery services administration (HRSA) is amending chapter 388-530 WAC, Pharmacy services. A complete reorganization of the pharmacy chapter was necessary prior to the implementation of the new ProviderOne point-of-sale system. Changes to WAC 388-530-1000 and 388-530-1050 include:
• Organizing the sections in a logical order;
• Clarifying the existing language;
• Updating WAC references; and
• Clarifying existing definitions, adding new definitions, and removing unnecessary definitions.
Reasons Supporting Proposal: See above.
Statutory Authority for Adoption: RCW 74.08.090.
Statute Being Implemented: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of social and health services, health and recovery services administration, governmental.
Name of Agency Personnel Responsible for Drafting: Wendy Boedigheimer, P.O. Box 45504, Olympia, WA 98504-5504, (360) 725-1306; Implementation and Enforcement: Siri Childs, P.O. Box 45506, Olympia, WA 98504-5506, (360) 725-1564.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule and concluded that no new costs will be imposed on businesses affected by them. The preparation of a comprehensive SBEIS is not required.
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, Health and Recovery Service Administration, Olympia, WA 98504-5506, phone (360) 725-1564, fax (360) 586-9727.
May 16, 2007
Stephanie E. Schiller
(2) The department reimburses ((
only pharmacies that:
(a) Are department-enrolled providers; and
(b) Meet the general requirements for providers described under WAC 388-502-0020.
(3) To be both covered and reimbursed under this chapter, prescription drugs must be)) for outpatient prescription drugs, devices, and pharmaceutical supplies that are:
Medically necessary as defined in WAC 388-500-0005)) Covered. Refer to WAC 388-530-2000 for covered
drugs, devices, and pharmaceutical supplies and to WAC 388-530-2100 for noncovered drugs and pharmaceutical supplies;
Within the scope of coverage of an eligible
client's medical assistance program. Refer to WAC 388-501-0060 and 388-501-0065 for scope of coverage
information)) Prescribed by a provider with presribing
authority (see exceptions for family planning in WAC 388-530-2000 (1)(b);
For a medically accepted indication appropriate to
the client's condition)) Within the scope of an eligible
client's medical assistance program;
Billed according to the conditions under WAC 388-502-0150 and 388-502-0160)) Medically necessary as defined
in WAC 388-500-0005 and determined according to the process
found in WAC 388-501-0165; and
Billed according to the conditions and requirements
of this chapter)) Authorized, as required within this chapter;
(f) Billed according to WAC 388-502-0150 and 388-502-0160; and
(g) Billed according to the requirements of this chapter.
(3) The department may not pay for prescriptions written by healthcare practitioners whose application for a core provider agreement (CPA) has been denied, or whose CPA has been terminated.
Acceptance and filling of a prescription for a
client eligible for a medical care program constitutes
acceptance of the department's rules and fees. See WAC 388-502-0100 for general conditions of payment)) The
department may not pay for prescriptions written by non-CPA
healthcare practitioners who do not have a current core
provider agreement with the department when the department
determines there is a potential danger to the client's health
[Statutory Authority: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700. 06-24-036, § 388-530-1000, filed 11/30/06, effective 1/1/07. Statutory Authority: RCW 74.09.080, 74.04.050 and 42 C.F.R. Subpart K, subsection 162.1102. 02-17-023, § 388-530-1000, filed 8/9/02, effective 9/9/02. Statutory Authority: RCW 74.08.090, 74.04.050. 01-01-028, § 388-530-1000, filed 12/7/00, effective 1/7/01. Statutory Authority: RCW 74.08.090. 96-21-031, § 388-530-1000, filed 10/9/96, effective 11/9/96.]
Reviser's note: The spelling 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.
AMENDATORY SECTION(Amending WSR 05-02-044, filed 12/30/04, effective 1/30/05)
WAC 388-530-1050 Definitions. ((
The following)) In
addition to the definitions and abbreviations (( and those))
found in WAC 388-500-0005, Medical definitions, the following
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))) department limits coverage of active ingredients to
those with an eleven-digit national drug code (NDC) and those
specifically authorized by (( MAA)) the department.
"Actual acquisition cost (AAC)" ((
means the actual
price)) -The net cost a provider paid for a drug, device, or
supply 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)) The ACC includes discounts, rebates, charge backs and other adjustments to the price of the drug, device or supply, but excludes dispensing fees.
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 authorization" - Adjuducation of claims using submitted NCPDP data elements or claims history to verify that the department's authorization requirements have been satisfied without the need for the department to request additional clinical information.
"Automated maximum allowable cost (AMAC)" ((
means)) - The
rate established by the (( medical assistance administration
(MAA))) department 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 Manufacturer Price (AMP)" - The average price paid to a manufacturer by wholesalers for drugs distributed to retail pharmacies.
"Average Sales Price (ASP) - The weighted average of all non-federal sales to wholesalers net of charge backs, discounts, rebates, and other benefits tied to the purchase of the drug product, whether it is paid to the wholesaler or the retailer.
"Average wholesale price (AWP)" ((
means)) - The average
price of a drug product that is calculated from wholesale list
prices nationwide at a point in time and reported to the
(( medical assistance administration (MAA) by MAA's))
department by the department's drug (( pricing)) file
"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
"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.
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
"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
"Dispensing fee" ((
means)) - The fee the (( medical
assistance administration (MAA))) department sets to
(( reimburse)) pay pharmacy providers for dispensing (( MAA))
department-covered prescriptions. The fee is (( MAA's)) the
department's maximum reimbursement for expenses involved in
the practice of pharmacy and is in addition to (( MAA's
payment)) the department's reimbursement for the costs of
"Drug Evaluation Matrix" - The criteria-based scoring sheet used to objectively and consistently evaluate the food and drug administration (FDA) approved drugs to determine drug coverage status.
"Drug file" ((
means)) - A list of drug products, pricing
and other information provided to the (( medical assistance
administration's (MAA's) drug data base)) department 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)) - An entity
which has been contracted to provide regularly updated
information on drugs and related supplies at specified
intervals, for the purpose of pharmaceutical claim
adjudication. Information is provided specific to individual
national drug codes, including product pricing.
"Drug rebates" ((
means payments)) - Reimbursements
provided by pharmaceutical manufacturers to state medicaid
programs under the terms of the manufacturers' agreements with
the department of health and human services (DHHS).
"Drug-related supplies" ((
means)) - Nondrug items
necessary for the administration, delivery, or monitoring of a
drug or drug regimen.
"Drug use review (DUR)" ((
means)) - A review of covered
outpatient drug(( s)) use that assures prescriptions are
appropriate, medically necessary, and not likely to result in
adverse medical outcomes.
"Effectiveness" - The extent to which a given intervention is likely to produce beneficial results for which it is intended in ordinary circumstances.
"Efficacy" - The extent to which a given intervention is likely to produce beneficial effects in the context of the research study.
"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
"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)) - The department'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
"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)) reimbursement 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)) the department 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
"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
(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
"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))
department reimburses for a (( specific dosage form and
strength of a multiple-source)) drug (( product)), device, or
"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. The department considers the compendia to support the use only when the use is evidence-based.
"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
(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
(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 FDA and 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
"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.
means)) - A person licensed in the
practice of pharmacy by the state in which the prescription is
means)) - Every location licensed by the
state board of pharmacy in the state where the practice of
pharmacy is conducted.
"Pharmacy and Therapeutic (P&T) Committee" - The independent Washington state committee created by RCW 41.05.021 (1)(a)(iii) and 70.14.050. At the election of the department, the committee may serve as the drug use review board provided for in WAC 388-530-4000.
"Point-of-sale (POS)" ((
means)) - A pharmacy claims
processing system capable of receiving and adjudicating claims
"Practice of pharmacy" ((
means)) - The practice of and
(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)) use reviews and
drug product selection.
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)) - D drug(s) of choice within a
selected therapeutic class that are selected based on clinical
evidence of safety, efficacy, and effectiveness.
"Preferred drug list (PDL)" - The department's list of drugs of choice within selected therapeutic drug classes.
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'
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
"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
"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 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.
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 use review (Retro-DUR)" ((
-The process in which (( client's)) drug utilization is
reviewed on an ongoing periodic basis to identify patterns of
fraud, abuse, gross overuse, or inappropriate or
(( unnecessary)) not medically necessary 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).
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)) - An eleven-digit 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
"Therapeutic consultation service (TCS)" ((
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)) The department's clinical
pharmacist consultation service offered to prescribers as a
resource for optimizing prescription drug therapy, or required
when drug claims for a client exceed designated thresholds.
"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
"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)) requires 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
(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
"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 74.08.090, 70.14.050, 69.41.150, 69.41.190, chapter 41.05 RCW. 05-02-044, § 388-530-1050, filed 12/30/04, effective 1/30/05. 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 ˝/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.]
Reviser's note: The spelling 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.