Original Notice.

Preproposal statement of inquiry was filed as WSR 00-07-088.

Title of Rule: Amending WAC 388-530-1750 Drugs and pharmaceutical supplies for clients with any third-party coverage.

Purpose: To clarify program requirements and to comply with the Governor's Executive Order 97-02, which mandates that all rules be reviewed for clarity, necessity, fairness, etc.

Statutory Authority for Adoption: RCW 74.08.090, 74.09.035.

Statute Being Implemented: RCW 74.08.090, 74.09.035.

Summary: These amendments update and clarify the process of reimbursing pharmacy providers for drugs or pharmaceutical supplies supplied to Medical Assistance Administration clients who have third-party insurance coverage, including clients who are eligible for both Medicare and medical assistance.

Reasons Supporting Proposal: To update rule content to reflect current department policy and business practices and to comply with the Governor's Executive Order 97-02.

Name of Agency Personnel Responsible for Drafting: Kathy Sayre, MAA/DCS, 925 Plum Street S.E., Olympia, WA 98501, (360) 725-1342; Implementation and Enforcement: Sonja Gleizes, MAA/DCS, 623 8th Avenue S.E., Olympia, WA 98501, (360) 725-1180.

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

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

Explanation of Rule, its Purpose, and Anticipated Effects: The rule clarifies how the department reimburses pharmacy providers when a client has any third party coverage that may pay for some or all expenses. It reflects current MAA policy to reimburse pharmacy providers for coinsurance and deductible amounts for drugs supplied to dual-eligible Medicare and Medicaid clients. The purpose of the rule is to inform providers about current MAA policy, and to make [sure] that policy is clearly understood. Its anticipated effect is a clearer understanding of MAA policy.

Proposal Changes the Following Existing Rules: The rule identified above is amended by adding language to clarify that MAA reimburses providers for coinsurance and deductible amounts for drugs Medicare covers, but MAA does not cover. This is not a change is policy, it is merely clarification of existing policy.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule amendments and concludes that no new costs will be imposed on businesses affected by them.

RCW 34.05.328 does not apply to this rule adoption. The rule does not meet the definition of "a signficant legislative rule."

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on June 27, 2000, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Fred Swenson by June 16, 2000, phone (360) 664-6097, TTY (360) 664-6178, e-mail swensfh@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, DSHS Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 664-6185, by June 27, 2000.

Date of Intended Adoption: June 28, 2000.

May 12, 2000

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

(1) Except as specified under contract,((MAA shall)) the medical assistance administration (MAA) does not reimburse providers for any drugs((/supplies)) or pharmaceutical supplies provided to clients who have pharmacy benefits under MAA-contracted managed care plans.      The managed care plan ((shall be)) is responsible for payment.

(2) ((For the purposes of the section,)) The following definitions apply to this section:

(a) "Closed pharmacy network" means an arrangement made by an insurer which restricts prescription coverage to an exclusive list of pharmacies.      This arrangement prohibits the coverage and/or payment of prescriptions provided by a pharmacy that is not included on the exclusive list.

(b) "Private point-of-sale (POS) authorization system" means an insurer's system, other than the MAA POS system, which requires that coverage be verified by or submitted ((for authorization by)) to the insurer's agent for authorization at the time of service and at the time the prescription is filled.

(3) ((MAA clients who have a third-party resource which is a managed care entity or other insurance requiring the use of "closed pharmacy networks" or "private point-of-sale authorization systems" shall not have prescription provider claims paid until the prescription provider submits an explanation of benefits from the private insurance which demonstrates that the prescription provider has complied with the terms of coverage.      If the private insurer has paid:)) This subsection applies to MAA clients who have a third-party resource that is a managed care entity other than an MAA-contracted plan, or have other insurance that requires the use of "closed pharmacy networks" or "private point-of-sale authorization." MAA will not pay pharmacies for prescription drug claims until the pharmacy provider submits an explanation of benefits from the private insurance that demonstrates that the pharmacy provider has complied with the terms of coverage.

(a) If the private insurer pays a fee based on the incident of care, the ((prescription)) pharmacy provider ((shall)) must file a claim with ((the department)) MAA consistent with ((the department's)) MAA's billing requirements((; or)).

(b) If the ((prescription)) private insurer pays the pharmacy provider a monthly capitation fee for all prescription costs related to the client, the ((prescription)) pharmacy provider ((may)) must submit a claim to ((the department)) MAA for the amount of the client co((-))payment, co((-))insurance, and/or deductible.      ((The department shall)) MAA pays the provider the lesser of:

(i) The ((lesser of the)) billed amount; or

(ii) ((The department's)) MAA's maximum allowable fee for the prescription.

(4) For clients eligible for both Medicare and ((Medicaid, providers shall)) medical assistance, MAA reimburses providers for:

(a) ((Be reimbursed for drugs not covered by Medicare, but covered by MAA;)) An amount up to MAA's maximum allowable fee for drugs Medicare does not cover, but MAA does cover; or

(b) ((Not be reimbursed for drugs covered by Medicare)) Deductible and/or coinsurance amounts up to Medicare's or MAA's maximum allowable fee, whichever is less, for drugs Medicare and MAA cover; or

(c) Deductible and/or coinsurance amounts for clients under the qualified Medicare beneficiary (QMB) program for drugs Medicare does cover but MAA does not cover.

[Statutory Authority: RCW 74.08.090.      96-21-031, § 388-530-1750, filed 10/9/96, effective 11/9/96.]

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