WSR 10-19-133



(Medicaid Purchasing Administration)

[ Filed September 22, 2010, 8:44 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 10-15-037.

Title of Rule and Other Identifying Information: WAC 388-530-8000 Reimbursement method -- Estimated acquisition cost (EAC).

Hearing Location(s): Office Building 2, Auditorium, DSHS Headquarters, 1115 Washington, Olympia, WA 98504 (public parking at 11th and Jefferson. A map is available at or by calling (360) 664-6094), on October 26, 2010, at 10:00 a.m.

Date of Intended Adoption: Not sooner than October 27, 2010.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504-5850, delivery 1115 Washington Street S.E., Olympia, WA 98504, e-mail, fax (360) 664-6185, by 5 p.m. on October 26, 2010.

Assistance for Persons with Disabilities: Contact Jennisha Johnson, DSHS rules consultant, by October 5, 2010, TTY (360) 664-6178 or (360) 664-6094 or by e-mail at

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This revision is necessary to update and clarify wording under subsection (3) of this section - specifically the word "percentage" should be "maximum allowable cost."

Reasons Supporting Proposal: The rule change clarifies that the department may set EAC payment rates for certain specified drugs or drug categories, at a maximum cost, rather than as a percentage discount off the reference price. This will allow the department to avoid excessive programming costs associated with setting unique percentage rates on specified drugs. The new wording does not change the prerogative of the department to pay lower EAC rates when appropriate.

Statutory Authority for Adoption: RCW 74.04.050 and 74.08.090.

Statute Being Implemented: RCW 74.08.090.

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

Name of Proponent: Department of social and health services, medicaid purchasing administration, governmental.

Name of Agency Personnel Responsible for Drafting: Wendy L. Boedigheimer, P.O. Box 45504, Olympia, WA 98504-5504, (360) 725-1306; Implementation and Enforcement: Myra Davis, P.O. Box 45510, Olympia, WA 98504-5510, (360) 725-1847.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule amendments and determined that there are no new costs associated with these changes and they do not impose disproportionate costs on small businesses.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Myra Davis, Manager, Pharmacy Rates Unit, P.O. Box 45510, Olympia, WA 98504-5510, phone (360) 725-1847, fax (360) 586-9727, e-mail

September 15, 2010

Katherine I. Vasquez

Rules Coordinator

AMENDATORY SECTION(Amending WSR 07-20-049, filed 9/26/07, effective 11/1/07)

WAC 388-530-8000   Reimbursement method--Estimated acquisition cost (EAC).   (1) The department determines estimated acquisition cost (EAC) using:

(a) Acquisition cost data made available to the department; or

(b) Information provided by any of the following:

(i) Audit agencies, federal or state;

(ii) Other state health care purchasing agencies;

(iii) Pharmacy benefit managers;

(iv) Individual pharmacy providers participating in the department's programs;

(v) Centers for Medicare and Medicaid Services (CMS);

(vi) Other third party payers;

(vii) Drug file data bases; and/or

(viii) Actuaries or other consultants.

(2) The department implements EAC by applying a percentage adjustment to available reference pricing from national sources such as wholesale acquisition cost (((WAC))), average wholesale price (AWP), average sale price (ASP), and average manufacturer price (AMP).

(3) The department may set EAC for specified drugs or drug categories at a ((percentage)) maximum allowable cost other than that determined in subsection (1)(a) of this section when the department considers it necessary. The factors the department considers in setting a rate for a class of drugs under this subsection include, but are not limited to:

(a) Product acquisition cost;

(b) The department's documented clinical concerns; and

(c) The department's budget limits.

(4) The department bases EAC drug reimbursement on the actual package size dispensed.

(5) The department uses ((the)) EAC as the department's reimbursement for a drug when ((the)) EAC is the lowest of the rates calculated under the methods listed in WAC 388-530-7000, or when the conditions of WAC 388-530-7300 are met.

[Statutory Authority: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700. 07-20-049, 388-530-8000, filed 9/26/07, effective 11/1/07.]

Washington State Code Reviser's Office