NC Medicaid Medicaid Outpatient Pharmacy Clinical Coverage

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 i

To all beneficiaries enrolled in a Prepaid Health Plan (PHP): for questions about benefits and

services available on or after implementation, please contact your PHP.

Table of Contents

1.0 Description of the Procedure, Product, or Service ........................................................................... 1

1.1 Definitions .......................................................................................................................... 1

Legend Drugs ...................................................................................................................... 1

Drug Use Review (DUR) .................................................................................................... 1

Narrow Therapeutic Index (NTI) ........................................................................................ 1

Long Acting Injectable (LAI) ............................................................................................. 1

2.0 Eligibility Requirements .................................................................................................................. 1

2.1 Provisions............................................................................................................................ 1

2.1.1 General ................................................................................................................... 1

2.1.2 Specific .................................................................................................................. 2

2.2 Special Provisions ............................................................................................................... 2

2.2.1 EPSDT Special Provision: Exception to Policy Limitations for a Medicaid

Beneficiary under 21 Years of Age ....................................................................... 2

3.0 When the Procedure, Product, or Service Is Covered ...................................................................... 3

3.1 General Criteria Covered .................................................................................................... 3

3.2 Specific Criteria Covered .................................................................................................... 3

3.2.1 Specific criteria covered by Medicaid ................................................................... 3

3.2.2 Medicaid Additional Criteria Covered ................................................................... 4

3.2.3 Exceptions to FDA and NC Medicaid Drug criteria approval. .............................. 4

3.3 Coverage of Compounded Drugs ........................................................................................ 5

3.4 Medicaid Drug Rebate Program ......................................................................................... 5

3.4.1 Federal Drug Medicaid Rebate Program ............................................................... 5

3.4.2 N.C. Medicaid Supplemental Drug Rebate Program ............................................. 5

3.5 Optional Drug Donation ..................................................................................................... 6

3.5.1 Long Acting Injectable Antipsychotic (LAIs) ....................................................... 6

4.0 When the Procedure, Product, or Service Is Not Covered ............................................................... 7

4.1 General Criteria Not Covered ............................................................................................. 7

4.2 Specific Criteria Not Covered ............................................................................................. 7

4.2.1 Specific Criteria Not Covered by Medicaid ........................................................... 7

4.2.2 Medicaid Additional Criteria Not Covered ............................................................ 8

5.0 Requirements for and Limitations on Coverage .............................................................................. 8

5.1 Prior Authorization ............................................................................................................. 8

5.1.1 Prior Authorization Process for Pharmacists Serving Long Term Care Facilities . 9

5.2 N.C. Medicaid Preferred Drug List ..................................................................................... 9

5.3 Management of Polypharmacy and Low Adherence .......................................................... 9

5.4 Dispensing and Maximum Supply .................................................................................... 10

5.4.1 Birth Control and Hormone ReplacementTherapies ............................................ 10

5.4.2 Non-Controlled Maintenance Medications .......................................................... 10

5.4.3 Quantity and Episodic Drugs ............................................................................... 10

5.5 Co-payments ..................................................................................................................... 10

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 ii

5.5.1

Medicaid Co-payment Requirements .................................................................. 10

5.5.2 Co-payment Exemptions ...................................................................................... 11

5.6 Returned Medication ......................................................................................................... 11

5.7 Automatic Refills and Shipments ..................................................................................... 11

5.8 Generic Substitution ......................................................................................................... 12

5.8.1 Generic Substitution for Brand Medically Necessary Medications ..................... 13

5.8.2 Generic Substitution for Narrow Therapeutic Index Drugs ................................. 13

5.9 Maximum Allowable Cost (MAC) ................................................................................... 13

5.9.1 NADAC generic rate and MAC Override ........................................................... 14

5.9.2 Provider State MAC Inquiries ............................................................................. 15

5.9.3 Unacceptable Practices for Drugs with MAC Prices ........................................... 15

5.9.4 Prenatal Vitamins ................................................................................................. 16

5.10 Hemophilia Specialty Pharmacy Program ........................................................................ 16

5.11 Narrow Therapeutic Index Drugs ..................................................................................... 16

5.12 Billing for Partial Fills ...................................................................................................... 16

5.13 Incorrect Units for Unbreakable Packages ....................................................................... 17

5.14 Beneficiary Management Lock-In Program ..................................................................... 17

5.14.1 Inclusion in the Beneficiary Management Lock-In Program............................... 18

5.14.2 Exclusions from the Beneficiary Management Lock-In Program ....................... 18

5.14.3 Emergency Supplies for the Beneficiary Management Lock-In Program ........... 18

6.0 Provider(s) Eligible to Bill for the Procedure, Product, or Service ............................................... 19

6.1 Provider Qualifications and Occupational Licensing Entity Regulations ......................... 19

6.2 Filling Prescriptions .......................................................................................................... 19

6.3 Changes in Pharmacy Status ............................................................................................. 19

7.0 Additional Requirements ............................................................................................................... 20

7.1 Compliance ....................................................................................................................... 20

7.2 Record Retention .............................................................................................................. 20

7.3 Pharmacy Audits ............................................................................................................... 20

7.4 Medicaid Recoupments ..................................................................................................... 21

7.5 Emergency Preparedness Protocol .................................................................................... 21

8.0 Policy Implementation/Revision Information ................................................................................ 22

Attachment A: Claims-Related Information ............................................................................................... 35

A. General Information .......................................................................................................... 35

B. Directions for Drug Reimbursement ................................................................................. 35

B.1 Vaccines ............................................................................................................................ 35

B.2 Dispensing Fee .................................................................................................................. 35

B.3 Cost of the Drug ................................................................................................................ 35

B.4 State Maximum Allowable Cost (SMAC) List ................................................................. 36

B.5 Hemophilia Specialty Pharmacy Program ........................................................................ 37

B.6 National Drug Code (NDC) .............................................................................................. 37

B.7 Drug Units......................................................................................................................... 37

C. Billing Pharmacy Claims through Online, Real-Time Point of Sale ................................ 37

C.1 Obtaining Point-of-Sale Software from a Vendor ............................................................ 38

C.2 Online Point-of-Sale Processing Downtime ..................................................................... 38

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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C.3

Compound Prescription Claims on Point-of-Sale ............................................................. 38

C.4 Point-of-Sale Claims over $9,999 ..................................................................................... 38

C.5 Time Limit for Point-of-Sale Claims ................................................................................ 38

C.6 Claims Processing for Selected DME Products ................................................................ 38

D. Provider Retroactive Pharmacy Claims Billing ................................................................ 39

E. Billing Medicare before Medicaid .................................................................................... 39

F. Billing Remainder of a Third-Party Prescription to Medicaid .......................................... 40

G. Billing for Nursing Home Prescriptions and IV Therapy ................................................. 41

H. Billing for Drugs Covered under Hospice ........................................................................ 41

I. Compounded Drugs .......................................................................................................... 42

I.1 Billing for Compounded Drugs ........................................................................................ 42

I.2 Reimbursement for Compound Drugs .............................................................................. 42

I.3 Summary of Compound Drug Reimbursement ................................................................ 42

J. Point-of-Sale Reversals ..................................................................................................... 42

K. High Dosage Edit .............................................................................................................. 43

L. Time Limit Overrides ....................................................................................................... 43

M. Pharmacy Remittance Advice ........................................................................................... 43

N. Resubmission of Rejected or Denied Claims .................................................................... 44

N.1 Explanation of Benefit Codes ........................................................................................... 44

N.2 Resubmitting a Claim ....................................................................................................... 44

N.3 Name and Number Mismatch ........................................................................................... 44

N.4 Eligibility Follow-Up ........................................................................................................ 44

Attachment B: Table of Exemptions to Co-payment and Specific Edit Override Information .................. 45

Attachment C: Requesting Prior Authorization for Prescription Drugs ..................................................... 46

Attachment D: Narrow Therapeutic Index Drugs ....................................................................................... 47

Attachment E: Drug Use Review Program ................................................................................................. 48

A. NC Medicaid ..................................................................................................................... 48

B. DUR Board ....................................................................................................................... 48

C. Prospective DUR .............................................................................................................. 48

C.1 Purpose.............................................................................................................................. 48

C.2 Procedure for Responding to DUR Alerts ........................................................................ 49

C.3 Counseling ........................................................................................................................ 50

C.4 Information on Medicaid Beneficiaries ............................................................................ 51

D. Retrospective DUR ........................................................................................................... 51

D.1 Overview ........................................................................................................................... 51

D.2 Profiling Systems Used by the Retrospective Drug Use Review Program ....................... 52

E. Statutory DUR Requirements and Impact on Pharmacies ................................................ 53

E.1 Beneficiary Profiles .......................................................................................................... 53

E.2 Screening .......................................................................................................................... 53

E.3 Beneficiary Counseling ..................................................................................................... 54

F. Requirement for Accurate Data on Pharmacy Claims ...................................................... 56

F.1 Day Supply ....................................................................................................................... 56

F.2 Prescriber Identification Number ...................................................................................... 56

F.3 Quantity Dispensed ........................................................................................................... 56

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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Point-of-Sale/Online Prospective Drug Use Review ........................................................ 56

G.1 Introduction ....................................................................................................................... 56

G.2 OBRA ’90 and Outpatient Drug Use Review ................................................................... 56

G.3 Objectives ......................................................................................................................... 57

G.4 Point-of-Sale System Operations ...................................................................................... 57

G.5 Prospective Drug Use Review System ............................................................................. 57

G.6 National Council for Prescription Drug Programs (NCPDP) Standards .......................... 58

G.7 DUR Alert Message Examples ......................................................................................... 60

G.8 DUR Alert Priority ............................................................................................................ 61

G.9 DUR Alert Definitions ...................................................................................................... 61

G.10 Online DUR Criteria ......................................................................................................... 62

G.11 Procedure for Responding to DUR Alerts ........................................................................ 64

H. Point-of-Sale/Pro-DUR Transaction Flows ...................................................................... 65

I. Drug–Drug Interaction Example ....................................................................................... 71

J. Over Utilization/Early Refill Example ............................................................................. 71

K. Under Utilization/Late Refill Example ............................................................................. 71

L. Low Dose/High Dose Example ........................................................................................ 72

M. Therapeutic Duplication Example .................................................................................... 73

Attachment F: Summary of Billing Requirements ..................................................................................... 74

Attachment G: Defining the Drug Unit ....................................................................................................... 77

Attachment H: Summary of Point-of-Sale Codes and Other Information for Current Claim Format ........ 78

Attachment I: Pharmacy Remittance Advice (RA) ..................................................................................... 80

Attachment J: ICD-10-CM Codes to Indicate Pregnancy ........................................................................... 81

Attachment K: Pharmacy Prior Approval Criteria ...................................................................................... 82

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27

Related Clinical Coverage Policies

Refer to https://medicaid.ncdhhs.gov/for the related coverage policies listed below:

9A, Over the Counter Products

9B, Hemophilia Specialty Pharmacy Program

1.0 Description of the Procedure, Product, or Service

The following policy applies to NC Medicaid (Medicaid) covered legend drugs and covered over

the counter (OTC) products dispensed by outpatient pharmacy providers.

1.1 Definitions

Legend Drugs

Are drugs defined by the Federal Food, Drug and Cosmetic Act, as amended, and under

which definition its label is required to bear the statement "Caution: Federal law prohibits

dispensing without prescription.

Drug Use Review (DUR)

For Drug Use Review (DUR) definition refer to: Attachment E: G.9

Narrow Therapeutic Index (NTI)

Are pharmaceuticals having a narrowly defined range between risk and benefit.

Long Acting Injectable (LAI)

Are injectable formulations intended for prolonged or sustained drug release over a long

period of time ranging from a few days to months.

2.0 Eligibility Requirements

2.1 Provisions

2.1.1 General

(The term “General” found throughout this policy applies to all Medicaid

policies)

a. An eligible beneficiary shall be enrolled in the NC Medicaid Program

(Medicaid is NC Medicaid program, unless context clearly indicates

otherwise).

b. Provider(s) shall verify each Medicaid beneficiary’s eligibility each time a

service is rendered.

c. The Medicaid beneficiary may have service restrictions due to their

eligibility category that would make them ineligible for this service.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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2.1.2 Specific

(The term “Specific” found throughout this policy only applies to this policy)

a. Medicaid

None Apply.

2.2 Special Provisions

2.2.1 EPSDT Special Provision: Exception to Policy Limitations for a

Medicaid Beneficiary under 21 Years of Age

a. 42 U.S.C. § 1396d(r) [1905(r) of the Social Security Act]

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) is a

federal Medicaid requirement that requires the state Medicaid agency to

cover services, products, or procedures for Medicaid beneficiary under 21

years of age if the service is medically necessary health care to correct or

ameliorate a defect, physical or mental illness, or a condition [health

problem] identified through a screening examination (includes any

evaluation by a physician or other licensed practitioner).

This means EPSDT covers most of the medical or remedial care a child

needs to improve or maintain his or her health in the best condition possible,

compensate for a health problem, prevent it from worsening, or prevent the

development of additional health problems.

Medically necessary services will be provided in the most economic mode,

as long as the treatment made available is similarly efficacious to the service

requested by the beneficiary’s physician, therapist, or other licensed

practitioner; the determination process does not delay the delivery of the

needed service; and the determination does not limit the beneficiary’s right to

a free choice of providers.

EPSDT does not require the state Medicaid agency to provide any service,

product or procedure that is:

1. unsafe, ineffective, or experimental or investigational.

2. not medical in nature or not generally recognized as an accepted method

of medical practice or treatment.

Service limitations on scope, amount, duration, frequency, location of

service, and other specific criteria described in clinical coverage policies may

be exceeded or may not apply as long as the provider’s documentation shows

that the requested service is medically necessary “to correct or ameliorate a

defect, physical or mental illness, or a condition” [health problem]; that is,

provider documentation shows how the service, product, or procedure meets

all EPSDT criteria, including to correct or improve or maintain the

beneficiary’s health in the best condition possible, compensate for a health

problem, prevent it from worsening, or prevent the development of additional

health problems.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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b. EPSDT and Prior Approval Requirements

1. If the service, product, or procedure requires prior approval, the fact that

the beneficiary is under 21 years of age does NOT eliminate the

requirement for prior approval.

2. IMPORTANT ADDITIONAL INFORMATION about EPSDT and

prior approval is found in the NC Tracks Provider Claims and Billing

Assistance Guide, and on the EPSDT provider page. The Web addresses

are specified below.

NC Tracks Provider Claims and Billing Assistance Guide:

https://www.nctracks.nc.gov/content/public/providers/provider-

manuals.html

EPSDT provider page: https://medicaid.ncdhhs.gov/

3.0 When the Procedure, Product, or Service Is Covered

Note: Refer to Subsection 2.2.1 regarding EPSDT Exception to Policy Limitations for a

Medicaid Beneficiary under 21 Years of Age.

3.1 General Criteria Covered

Medicaid shall cover the procedure, product, or service related to this policy when

medically necessary, and:

1. the procedure, product, or service is individualized, specific, and consistent with

symptoms or confirmed diagnosis of the illness or injury under treatment, and not in

excess of the beneficiary’s needs;

2. the procedure, product, or service can be safely furnished, and no equally effective

and more conservative or less costly treatment is available statewide; and

3. the procedure, product, or service is furnished in a manner not primarily intended for

the convenience of the beneficiary, the beneficiary’s caretaker, or the provider.

3.2 Specific Criteria Covered

3.2.1 Specific criteria covered by Medicaid

The Medicaid Outpatient Pharmacy Programs shall cover prescribed drugs when

they meet all the following guidelines and specific criteria listed in this policy:

a. The prescribed drug must have Federal Drug Administration (FDA)

approved indication or is used for a medically accepted indication for which

it is prescribed unless approval is given by DHB;

b. The prescribed drug must bear the federal legend statement;

c. A legend drug must be manufactured by a company that has signed a

National Medicaid Drug Rebate Agreement with the Centers for Medicare

and Medicaid Services (CMS);

d. Selected OTC products including insulin are covered when they meet the

criteria listed in clinical coverage policy 9A, Over the Counter Products, at

https://medicaid.ncdhhs.gov/;

e. The prescription must be written for whom the claim is billed;

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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f. The vaccine is a covered service when the pharmacy is compliant with all

North Carolina Medicaid Billing Procedures, Federal laws, and State laws

with regard to vaccines;

g. Prenatal vitamins and fluoride; and

h. Legend Calcitriol (vitamin D) when used for a predialysis beneficiary, a

dialysis beneficiary, and a hypoparathyroidism beneficiary.

3.2.2 Medicaid Additional Criteria Covered

None Apply

3.2.3 Exceptions to FDA and NC Medicaid Drug criteria approval.

Medicaid may restrict coverage of an outpatient drug as found in Section

1927(d)(1)(B)(i) of the Social Security Act if the prescribed drug is not for a

medically accepted indication. Medically accepted indication means any use for a

covered outpatient drug which is approved under the Federal Food, Drug, and

Cosmetic Act, or the use of which is supported by one or more citations included

or approved for inclusion in any of the compendia described in subsection

(g)(1)(B)(i)".The compendia include:

a. American Hospital Formulary Service Drug Information

b. United States Pharmacopeia-Drug Information(or its successor publications);

c. DRUGDEX Information System; or

d. As per 1927(d)(1)(B)(ii), peer-reviewed medical literature.

When a provider determines the indication or dosing for a particular drug is

medically necessary for a beneficiary, but those parameters fall outside of the

FDA approved guidelines and evidence-based standards for that drug, or NC

Medicaid Drug Criteria for that drug, the provider may make a request for the

medically necessary indication or dosing for a particular drug.

To request approval, a provider shall submit, along with the usual drug request

forms the required additional information:

a. Health record information to show medical necessity for the requested drug;

b. An explanation of what other drugs have been tried or why they cannot be

tried;

c. An explanation from the prescribing medical professional of why the FDA

approved guidelines and evidence-based standards for that drug or NC

Medicaid Drug Criteria is insufficient for this beneficiary and

d. Compendia/peer-reviewed medical literature supporting the use of the

requested drug (as per 42U.S.C. 1396r 8(g)(1)(B)).

The address to send this information is:

Pharmacy Manager for Clinical Policy and Programs

Division of Health Benefits

NC Medicaid

2501 Mail Service Center

Raleigh, NC 27699-2501

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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3.3 Coverage of Compounded Drugs

Medicaid shall cover compounded products when:

1. a mixture of two or more ingredients is physically inseparable;

2. at least one of the components of the compounded drug is a legend drug;

3. it is expected that the quantity of legend drug is sufficient to have a therapeutic

effect; and

4. the legend drug is manufactured by a company that has signed a national Medicaid

Drug Rebate Agreement with Centers for Medicaid and Medicare Services (CMS).

A compounded prescription contains a quantity of a legend drug sufficient to have a

therapeutic effect and cannot be two different drugs (capsules or tablets) separable but

dispensed in the same bottle.

Refer to Attachment A, Section J, Compounded Drugs, for additional information on

billing and reimbursement.

3.4 Medicaid Drug Rebate Program

3.4.1 Federal Drug Medicaid Rebate Program

https://www.medicaid.gov/Federal-Policy-Guidance/downloads/smd091802.pdf

The Medicaid Outpatient Pharmacy Programs shall cover drugs from

manufacturers who have signed a national Medicaid Drug Rebate Agreement

with CMS. Drug companies sign the agreement for specific drug manufacturer

codes. Drug coverage is determined by the manufacturer code and not by the

manufacturer name. The manufacturer code is indicated by the first five digits of

the 11-digit National Drug Code (NDC) number.

Rebates are determined by North Carolina’s Medicaid utilization data.

Pharmacies are required to use the NDC number of the drug actually dispensed.

If accurate NDCs are not used, there is the potential for denial of claims,

sanctions, and termination of provider agreements.

The Medicaid program shall supply pharmacy providers with a list of any

additions or deletions to the list of covered Medicaid Rebate Manufacturers

through newsletters posted on NC Medicaid’s website at

https://medicaid.ncdhhs.gov/.

3.4.2 N.C. Medicaid Supplemental Drug Rebate Program

The Medicaid Outpatient Pharmacy Program also participates in a supplemental

drug rebate program for the Medicaid program. The State negotiates

supplemental rebates in addition to federal rebates for both programs. Payment of

supplemental rebates results in a drug being added to the preferred drug list.

Refer to Subsection 5.2, N.C. Medicaid Preferred Drug List.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 6

3.5 Optional Drug Donation

3.5.1 Long Acting Injectable Antipsychotic (LAIs)

Medicaid beneficiaries may donate prescribed and abandoned Long Acting

Injectable Antipsychotics (LAIs) defined below to a registered Drug Repository

Program, as defined under and in accordance with N.C.G.S §90-85.44 at

https://www.ncleg.net/EnactedLegislation/Statutes/PDF/BySection/Chapter_90/

GS_90-85.44.pdf

Abandoned LAIs may only be donated to a registered Drug Repository Program

when all of the following requirements are met:

a. LAI has been ordered by the provider and intended for use by a Medicaid

beneficiary;

b. Pharmacy has released the LAI to the provider for administration and

Medicaid has paid the pharmacy for the LAI;

c. Medicaid beneficiary has not appeared for their appointment to receive the

LAI or has otherwise declined, in writing, to receive the injection;

d. Medicaid beneficiary has not appeared for their appointment, and the

Provider has made at least two phone calls and a letter of notification to

contact the Medicaid beneficiary about their failure to appear for their

appointment as described below;

e. Provider has either been unable to make contact with the Medicaid

beneficiary or the Medicaid beneficiary’s intent to abandon the LAI is

documented as required in this policy; and

f. Dispensing pharmacy is unable to take the medication back.

An “abandoned” LAI is defined as a LAI, prescribed for a specific beneficiary,

dispensed to the beneficiary’s provider for administration, and the beneficiary

either fails to appear for the administration of the LAI and meet the requirements

described below, or the provider obtains written documentation of the

beneficiary’s refusal to receive the LAI.

For a Medicaid beneficiary who has not appeared for their appointment, the LAI

is considered “abandoned” 30 days after the missed date of administration of the

LAI dose and after the provider has made at least 2 calls to the beneficiary and

has sent a letter of notification to the beneficiary regarding the missed LAI dose.

The LAI is considered abandoned if there is no response from the beneficiary

after the provider has made three ( 3 ) outreach attempts to the beneficiary

described above or the provider documents the beneficiary’s refusal to receive

the LAI.

To allow for donation of an abandoned LAI by a NC Medicaid beneficiary, the

provider shall obtain and keep in the beneficiary’s record a signed consent of the

Medicaid beneficiary donor’s willingness to donate the abandoned LAI. The

provider may satisfy this requirement by obtaining at the initial beneficiary visit

where the LAI is prescribed a signed consent from the Medicaid beneficiary

stating that the beneficiary agrees to have the provider donate any abandoned

doses of the LAI on the beneficiary’s behalf to a registered Drug Repository

Program according to N.C.G.S. §90-85.44. The consent must clearly explain to

the beneficiary when the LAI is considered “abandoned” as defined above in this

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

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policy so that the beneficiary is fully aware of the point at which their medication

is considered abandoned.

Once an LAI is “abandoned,” the LAI must be donated to a registered Drug

Repository Program in the original unopened container or box as defined under

N.C.G.S. §90-85.44(b). The provider shall not re-use or administer the LAI to

another patient outside of a registered Drug Repository Program. In addition to

the above, a provider must:

a. Adhere to all NC Board of Pharmacy procedures and policies with respect to

abandoned LAI donation;

b. NOT bill Medicaid for administration of the LAI, if the medication is

abandoned and donated. A provider shall only bill administration fees where

the Medicaid beneficiary receives the LAI;

c. For any LAI abandoned by a Medicaid beneficiary, the prescriber shall

clearly document ongoing psychoeducation efforts and medication

management decision-making with the beneficiary along with the consent or

withdrawal of consent for ongoing treatment with LAIs, to reduce the

likelihood of future LAI abandonment; and

d. Cooperate with any investigations for fraud, waste, or abuse and monitoring,

as a provider is subject to Medicaid Provider Participation Agreement terms.

4.0 When the Procedure, Product, or Service Is Not Covered

Note: Refer to Subsection 2.2.1 regarding EPSDT Exception to Policy Limitations for a

Medicaid Beneficiary under 21 Years of Age.

4.1 General Criteria Not Covered

Medicaid shall not cover the procedure, product, or service related to this policy when

the:

a. the beneficiary does not meet the eligibility requirements listed in Section 2.0;

b. the beneficiary does not meet the criteria listed in Section 3.0;

c. the procedure, product, or service duplicates another provider’s procedure, product,

or service; or

d. the procedure, product, or service is experimental, investigational, or part of a clinical

trial.

4.2 Specific Criteria Not Covered

4.2.1 Specific Criteria Not Covered by Medicaid

Medicaid shall not cover the following:

a. OTC products. Refer to Subsection 3.2.1(b) Federal legend drugs or their

generic equivalents that are on the Drug Efficacy Study Implementation

(DESI) list established by the FDA;

b. Any drug manufactured by a company that has not signed a rebate

agreement. Exception shall be made for CroFab, and selected vaccines and

radiopharmaceuticals;

c. Fertility drugs;

d. Drugs used for cosmetic indications;

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 8

e. Medical supplies and devices. Refer to Attachment A, Subsection C.6,

Claims Processing for Selected Durable Medical Equipment (DME)

Products;

f. Diaphragms, which are a family planning service;

g. Intravenous (IV) fluids (Dextrose 500 ml or greater) and irrigation fluids;

except for living arrangement codes 10 (Private Living Arrangement (not 1/3

reduction), 11 (Private Living Arrangement (with 1/3 reduction) (Medicaid

Only), 13 (Living with Supplemental Security Income (SSI) Beneficiary), 52

(Domiciliary care, Six or More Beds (Special Assistance for the Aged

(SAA), Special Assistance for the Disabled (SAD), 53 (Foster Care

(Medicaid for Families (MAF), Medicaid for Infants and Children (MIC),

State Foster Home Fund (HSF), Medicaid with IV-E Adoption Subsidy and

Foster Care (IAS)) or 80 (Adoptive Home (MAF, MIC, MRF (Refugee

Medical Assistance), HSF, IAS));

h. Erectile dysfunction drugs;

i. Weight loss and weight gain drugs;

j. Drug samples;

k. Drugs obtained from any beneficiary assistance program;

l. Drugs used for the symptomatic relief of cough and colds that contain

expectorants or cough suppressants;

m. Legend vitamins and mineral products. Refer to Subsection 3.2.1(b);

n. All DESI drugs and combinations equivalent to a DESI drug in compounded

prescriptions. Drugs described by the FDA as DESI are products that the

FDA has found to be less than effective or not proven to be as effective as

indicated. Drug products that are identical, related or similar to DESI drugs

are considered DESI. Updates and corrections are published in the Pharmacy

Newsletters on Medicaid’s website, https://medicaid.ncdhhs.gov/

; or

o. A compounded prescription which is equivalent to an OTC product.

4.2.2 Medicaid Additional Criteria Not Covered

None Apply.

5.0 Requirements for and Limitations on Coverage

Note: Refer to Subsection 2.2.1 regarding EPSDT Exception to Policy Limitations for

Medicaid Beneficiaries under 21 Years of Age.

5.1 Prior Authorization

Medicaid shall require prior authorization for selected prescription drugs. Refer to

http://nctracks.nc.gov/

for a list of prescription drugs that require prior authorization

(PA). The website lists the medical necessity criteria for coverage for each medication

that requires prior approval. Refer to Attachment C for instructions on requesting prior

authorization.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 9

Medicaid may require prior approval for coverage of new to market and existing

products; and conduct clinical reviews for new to market products for possible

development of clinical coverage criteria. The clinical review includes:

a. new variations of products already in the marketplace;

b. new indications for products already in the marketplace;

c. changes in indications for products; and

d. or changes in dosing for products already in the marketplace.

Note: Time is needed to review scientific literature, consult with medical

specialists and peers to establish appropriate coverage criteria if prior approval is

determined to be necessary. In the interim, until appropriate clinical coverage

can be developed and approved, or until the state determines criteria is not

needed, coverage, including the coverage of Medicaid Managed Care Plans, shall

be based on FDA indications, FDA approved dosages, and medically acceptable

indications, and can involve prior approval. This guidance applies to new and

existing products for which Medicaid has not yet developed clinical coverage

criteria or determined criteria is not needed.

72-Hour Emergency Supply

A 72-hour emergency supply may be provided if a beneficiary is waiting for

acknowledgment of the prior authorization request. The pharmacy is reimbursed for the

supply if the prescription is changed to an alternative medication. Refer to Attachment C

for information on the processing of a 72-hour emergency supply.

5.1.1 Prior Authorization Process for Pharmacists Serving Long Term

Care Facilities

Pharmacists serving nursing facilities, adult care homes, and Intermediate Care

Facilities for Individuals with Intellectual Disabilities(ICF/IID) are allowed to

request prior authorization.

5.2 N.C. Medicaid Preferred Drug List

The N.C. General Assembly [Session Law 2009-451, Sections 10.66(a)-(d)] authorized

the establishment of the N.C. Medicaid Preferred Drug List (PDL), which allows the

Division of Health Benefits to obtain better prices for covered outpatient drugs through

supplemental rebates. All therapeutic drug classes for which the drug manufacturer

provides a supplemental rebate under the Medicaid program are considered for inclusion

on the list.

Refer to https://medicaid.ncdhhs.gov/

for more information about the NC Medicaid PDL.

5.3 Management of Polypharmacy and Low Adherence

A beneficiary with low adherence to chronic medications and polypharmacy shall be

referred to the Community Care of North Carolina Network for medication therapy

management to ensure coordinated care.

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5.4 Dispensing and Maximum Supply

The maximum supply for all drugs is a 34-day supply unless the medication meets the

criteria described below:

5.4.1 Birth Control and Hormone ReplacementTherapies

Up to 12 months of oral birth control medications and up to three months of

prepackaged hormone replacement therapies are allowed.

5.4.2 Non-Controlled Maintenance Medications

Medicaid beneficiaries may obtain a 90-day supply of medications if the claim is

for a non-controlled, maintenance medication.

This is at the sole discretion of the beneficiary’s health care provider. Only one

co-pay is collected and only one dispensing fee is paid for the 90-day supply.

5.4.3 Quantity and Episodic Drugs

Some drugs are meant to be used episodically and dispensed in quantities that

support less than daily use. NC Medicaid may impose quantity limitations for

episodic drugs based on advice from the North Carolina Physician Advisory

Group (NCPAG), which considers FDA labeling, evidence-based guidelines,

systematic reviews, and consultation with the DHHS designated contractor as to

North Carolina community and best practice standards about precise duration of

use.

The NCPAG may recommend for each drug that is designated as an episodic

drug other restrictions or actions currently available under the Outpatient

Pharmacy Program including:

a. Evaluating the applicability of quantity limitations of episodic drugs for a

beneficiary who normally receives their legend medications packaged in a

specialized distribution system;

b. Prior authorization criteria and requirements; and

c. Actions that minimize the number of dispensing fees for drugs that are

prescribed in limited quantities.

For quantity limitations refer to the Preferred Drug List or the specific Prior

Authorization policy found at http://www.nctracks.nc.gov/

NC Medicaid shall monitor utilization of designated episodic drugs on an annual

basis or more frequently, if necessary, in order to assess the need for changes in

the limits. This data is shared with the NCPAG.

5.5 Co-payments

5.5.1 Medicaid Co-payment Requirements

An eligible Medicaid beneficiary, who receives prescribed drugs, is required to

make a co-payment of $4.00 for each prescription received unless they are

exempt for one of the reasons listed below in Subsection 5.5.2. A provider may

not deny services to any Medicaid beneficiary because of the individual’s

inability to pay a deductible, coinsurance or co-payment amount. A provider may

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not willfully discount copays for a Medicaid beneficiary, and an individual’s

inability to pay does not eliminate his or her liability for the cost sharing charge.

The provider shall open an account for the beneficiary, collect the amount owed

at a later date, and document all attempts to collect the copay. If the account has

not been paid, the pharmacy may in the course of normal accounting principles,

write-off the charges and stop monitoring the claim.

5.5.2 Co-payment Exemptions

A Medicaid beneficiary is exempt from a co-payment for any one of the

following:

a. The beneficiary is under 21 years of age;

b. The beneficiary resides in a nursing home facility, Intermediate Care

Facilities for Individuals with Intellectual Disabilities (ICF/IID) or a mental

health hospital;

c. Adult care home and hospice beneficiaries are responsible for co-payment.

d. The drug is classified as family planning (birth control medication).

Exemption from the co-pay for family planning drugs is indicated on the

drug file and does not require any additional indicators. Do not collect a co-

pay for oral contraceptives;

e. The beneficiary is classified as a CAP beneficiary as indicated on the

beneficiary’s Medicaid Identification Card (MID card);

f. The beneficiary is pregnant. The co-payment exemption is made

automatically by the claims processing system for an eligible beneficiary. In

the event that the system does not override the copay, the pharmacy may use

any of the ICD-10-CM codes listed in Attachment J to indicate pregnancy;

g. A “4” in the Prior Authorization Type Code or a “2” in the pregnancy

indicator field on a point-of-sale (POS) claim also indicates an exemption

from the co-payment deduction for pregnancy;

h. The beneficiary is a member of a federally recognized tribe;

i. Vaccines and vaccine administration; or

j. Antiretrovirals used to reduce viral load in a beneficiary living with Human

Immunodeficiency Virus (HIV).

5.6 Returned Medication

Pharmacists shall follow the N.C. Board of Pharmacy regulations for returned

medications. A credit must be issued for all prescriptions that are allowed to be returned

to stock under N.C. Board of Pharmacy regulations. Credits must be handled by

completing a reversal of a Point-of-Sale (POS) claim.

Refer to Attachment A, Section K, Point-of-Sale Reversals; and Section O,

Resubmission of Rejected or Denied Claims, for additional information.

5.7 Automatic Refills and Shipments

Automatic refills and automatic shipments are not allowed. Medicaid shall not pay for

any prescription (original or refill) based on a provider’s auto refill policy. Medicaid shall

not pay for any prescription without an explicit request from a beneficiary or the

beneficiary’s responsible party, such as a caregiver, for each refilling event. The

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pharmacy provider shall not contact the beneficiary in an effort to initiate a refill unless it

is part of a good faith clinical effort to assess the beneficiary’s medication regimen. The

possession, by a provider, of a prescription with remaining refills authorized does not in

itself constitute a request to refill the prescription. A beneficiary or provider shall not

waive the explicit refill request and enroll in an electronic automatic refill program. Any

prescriptions filled without a request from a beneficiary or their responsible party are

subject to recovery. Any pharmacy provider with a policy that allows filling prescriptions

on a regular date or any type of cyclical procedure is subject to audit, claim recovery or

possible suspension or termination of their provider agreement. This does not prohibit a

pharmacy from using refill reminders to encourage a beneficiary’s adherence to their

medication regimen, as long as the reminders are for medications the beneficiary is

currently receiving.

5.8 Generic Substitution

Refer to Subsection 5.11 for information on Narrow Therapeutic Index (NTI) drugs.

The General Assembly authorizes and mandates pharmacists participating in Medicaid to

substitute generic drugs for brand or trade name drugs unless the prescriber specifically

orders the brand name drug. A prescription for a drug designated by a brand or trade

name for which one or more equivalent drugs are available is considered an order for the

drug by its generic name, except when the prescriber personally indicates in his or her

own handwriting on the prescription order “medically necessary.” Current Session Law

states:

“Dispensing of generic drugs. – Notwithstanding G.S. 90-85.27 through G.S. 90-

85.31, or any other law to the contrary, under the Medical Assistance Program (Title

XIX of the Social Security Act), and except as otherwise provided in this subsection

for drugs listed in the narrow therapeutic index, a prescription order for a drug

designated by a trade or brand name shall be considered to be an order for the drug

by its established or generic name, except when the prescriber has determined, at the

time the drug is prescribed, that the brand-name drug is medically necessary and has

written on the prescription order the phrase "medically necessary."

An initial prescription order for a Medicaid beneficiary that is for a drug listed in the

narrow therapeutic drug index that does not contain the phrase "medically

necessary" shall be considered an order for the drug by its established or generic

name, except that a pharmacy shall not substitute a generic or established name

prescription drug for subsequent brand or trade name prescription orders of the same

prescription drug without explicit oral or written approval of the prescriber given at

the time the order is filled. Generic drugs shall be dispensed at a lower cost to the

Medical Assistance Program rather than trade or brand-name drugs.

Notwithstanding this subdivision to the contrary, the Secretary of Health and Human

Services may prevent substitution of a generic equivalent drug, including a generic

equivalent that is on the state maximum allowable cost list, when the net cost to the

State of the brand-name drug, after consideration of all rebates, is less than the cost

of the generic equivalent. As used in this subsection, "brand name" means the

proprietary name the manufacturer places upon a drug product or on its container,

label, or wrapping at the time of packaging; and "established name" has the same

meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act, as

amended, 21 U.S.C. § 352(e)(3).

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The selection of a drug product must not be more expensive than the brand or trade

name originally written by the prescriber. The pharmacist shall fill the prescription

with the least expensive generic in the pharmacy, unless a specific brand or trade

name is specified by the prescriber in the required manner or the net cost to the State

of the brand-name drug has been determined to be less than the cost of the generic

equivalent. NC Medicaid may use a certification form and procedures for

“medically necessary” brand-name drugs. For audit purposes, the brand name and

manufacturer must be documented on the prescription.

5.8.1 Generic Substitution for Brand Medically Necessary Medications

A prescription for a drug written under its brand or trade name must be filled

with a generic version of the drug when one is available unless the net cost to the

State of the brand-name drug has been determined to be less than the cost of the

generic equivalent OR the prescriber has indicated that the brand name drug is

medically necessary for the beneficiary to receive. The prescriber shall indicate

this by writing “medically necessary” on the prescription order for the drug. If

the pharmacist receives a prescription for a drug written by its brand or trade

name with the medical necessity documentation on the face of the prescription

even though there is a generic version of the drug available, the pharmacist shall

dispense the brand name drug. If the prescription is written by the brand or trade

name of the drug but “medically necessary” is not written on the face of the

prescription by the prescriber, the pharmacist shall dispense a generic version of

the drug.

NC Medicaid may impose prior authorization requirements on brand-name drugs

for which the phrase “medically necessary” is written on the prescription.

5.8.2 Generic Substitution for Narrow Therapeutic Index Drugs

A new prescription for a drug that is on the Narrow Therapeutic Index (NTI) list

that is written under its brand or trade name must be filled with a generic version

of the drug when one is available, unless the prescriber has indicated that the

brand name drug is necessary by writing “medically necessary” on the

prescription order for the drug. A prescription for a narrow therapeutic index

drug must be refilled using only the same drug product by the same manufacturer

that the pharmacist last dispensed under the prescription, unless the prescriber is

notified by the pharmacist prior to the dispensing of another manufacturer's

product, and the prescriber and the beneficiary give documented consent to the

dispensing of the other manufacturer's product. For purposes of this subsection,

the term "refilled" means a new prescription written at the expiration of a

prescription which continues the beneficiary's therapy on a narrow therapeutic

index drug. When utilizing a brand NTI drug in accordance with the rules above,

use Dispense as Written (DAW) 7 to indicate brand required and to override any

NADAC (National Average Drug Acquisition Cost ) generic rate or MAC.

5.9 Maximum Allowable Cost (MAC)

The Outpatient Pharmacy Program utilizes a state MAC list for generic and multi-source

brand drug products that do not have a NADAC brand or generic price. The

determination of which drug products are assigned a state MAC is the direct

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responsibility of NC Medicaid. The state MAC list contains mostly products with A-rated

equivalents, and in the great majority of cases, products marketed by at least two labelers.

The State’s MAC reimbursement is based on the application of a percentage factor

applied to the lowest priced generic. In cases where the calculated MAC rate, based on

the primary percentage factor, results in a price less than the cost of the second lowest

generic product, at least an additional 10 percent margin is added to the cost of the

second-lowest drug to establish the MAC price. The MAC pricing factor is set by NC

Medicaid and may change as deemed appropriate.

The additional margin is variable due to the wide range of differences in cost from

product to product.

For established generic drugs with only one supplier, the MAC price is established

between the actual acquisition cost and average wholesale price of the generic drug. A

minimum reimbursement of 20 percent above actual acquisition is guaranteed for these

drugs. In most cases, MAC pricing is substantially higher than this 20 percent, which

allows the State and pharmacies to share in the cost savings of using the generic product.

Drugs subjected to MAC pricing must be in adequate supply. Drug shortage information

is verified through the national pharmacy websites as well as through information

provided by national drug wholesalers.

The federal and state MAC lists work in conjunction with one another. The lowest price

at any given time will be the current reimbursement for a drug claim.

5.9.1 NADAC generic rate and MAC Override

It is possible to override either the NADAC generic rate or the state MAC

limitations if a prescriber certifies that a specific brand of drug, which has a

NADAC generic rate or MAC limitation, is medically necessary for a particular

beneficiary (refer to Subsection 5.8, Generic Substitution). This certification

must fall under federal and state regulations, which specify that the certification

“Medically Necessary” must be in the prescriber’s own handwriting and signed

by the prescriber. This can be written directly on the face of the prescription or

on a separate document, which must be attached to the original prescription.

Dispense as Written (DAW) 1 on a POS claim is a NADAC generic rate and

MAC override. NC Medicaid may impose prior authorization requirements on

brand-name drugs for which the phrase “medically necessary” is written on the

prescription.

Dispense as Written (DAW 7) on a POS claim is a NADAC generic rate and

MAC override. This override shall apply when a prescription for a drug on the

NTI list is written under its brand name and the prescriber has indicated the brand

name drug is necessary by writing “medically necessary” on the prescription

order. NC Medicaid may impose prior authorization requirements on brand-

name drugs for which the phrase “medically necessary” is written on the

prescription.

Dispense as Written (DAW 8) on a POS claim is a NADAC generic rate and

MAC override. This override shall be used only when a multi-source Brand

generic equivalent is not available in the marketplace. NC Medicaid may impose

prior authorization requirements on brand-name drugs for which the phrase

“medically necessary” is written on the prescription.

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Dispense as Written (DAW 9) on a POS claim is a NADAC generic and MAC

override. This override shall apply only to multi-source Brand drug products that

are preferred on the NC Medicaid PDL and have a nonpreferred generic

equivalent. NC Medicaid may impose prior authorization requirements on

brand-name drugs for which the phrase “medically necessary” is written on the

prescription.

5.9.2 Provider State MAC Inquiries

The North Carolina Medicaid Program contracts with a vendor in maintaining the

State Maximum Allowable Cost (State MAC) program for generic drugs and

hemophilia drugs.

Providers may contact the vendor regarding specific questions or concerns about

the State MAC rate, rate calculation process, changes in the acquisition cost of a

drug, changes in product availability, or to obtain a copy of the State MAC list.

Contact information is posted on the NC Medicaid website.

Providers with questions about a State MAC rate will be asked to complete a

“State MAC Pricing Inquiry Worksheet.” This request shall be completed by

providing the information requested and submitting copies of drug purchase

records which represent the current price paid for the particular drug(s) in

question.

Based on the information obtained, the vendor may conduct additional inquiries

with other pharmacies to obtain additional drug purchase records to determine if

there has been a change in the market. The vendor may also contact drug

manufacturer(s) to confirm any reports of market unavailability. After reviewing

the data submitted by the pharmacy, and any additional information obtained, the

vendor will prepare an analysis of the inquiry for review by NC Medicaid.

The results of NC Medicaid’s review will be communicated to the pharmacy as

soon as a final decision is made. If a rate adjustment is approved, a file will be

prepared to update the State MAC rate and its effective date in the pharmacy

claims processing and payment system.

5.9.3 Unacceptable Practices for Drugs with MAC Prices

a. The prescriber is not allowed to indicate “Medically Necessary” over the

telephone or e-prescription for the pharmacist to document on the

prescription if the drug is a MAC drug.

Note: If the drug is not a MAC drug, the pharmacist may receive oral

authorization not to substitute from the prescriber, write “Medically

Necessary” on the prescription, and initial it. If a telephone prescription or e-

prescription requiring brand only is accepted, the prescriber must send a new

prescription within 72 hours with “Medically Necessary” written on the

prescription in the prescriber’s own handwriting.

b. A prescriber’s signature over a printed statement indicating “Dispense as

Written” or “Medically Necessary” with a check or X in a box on the

prescription indicating “Dispense as Written” is unacceptable.

c. A handwritten statement transferred to a rubber stamp and then stamped on

the prescription is unacceptable.

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d. The abbreviation “DAW” on the prescription by the prescriber is

unacceptable.

If a physician has properly authorized for the dispensing of a brand name

drug product when that drug product is a MAC drug, the pharmacist can bill

for reimbursement based on the lower of the usual and customary charge or

the reimbursement rate of the brand name drug plus the dispensing fee. To

indicate that the prescriber has documented “Medically Necessary” and bill

for the brand, indicate DAW 1 on an online POS claim. Do not use DAW 1

for brand name, single source drugs. The MAC override must only be used to

override a MAC price.

5.9.4 Prenatal Vitamins

Due to the many variations in the ingredients in prenatal vitamins and the

corresponding variation in the ingredient cost, a single MAC rate for prenatal

vitamins is established and maintained. Current marketplace acquisition cost,

average wholesale price and wholesale acquisition cost are evaluated to

determine the single MAC rate. Prenatal Vitamins pay at NADAC rates first, but

when no NADAC is on file, the single MAC rate applies.

Refer to Attachment H for DAW codes.

5.10 Hemophilia Specialty Pharmacy Program

The General Assembly [Session Law 2012-142, Section 10.48(a2)] mandates that the N.C.

Medicaid Pharmacy programs establish a specialty pharmacy program for hemophilia

drugs. Refer to clinical coverage policy 9B, Hemophilia Specialty Pharmacy Program, at

https://medicaid.ncdhhs.gov/

5.11 Narrow Therapeutic Index Drugs

N.C. General Statute 90-85.27 defines Narrow Therapeutic Index (NTI) drugs to mean

those pharmaceuticals having a narrowly defined range between risk and benefit. Such

drugs have less than a twofold difference in the minimum toxic concentration and

minimum effective concentration in the blood or are those drug product formulations that

exhibit limited or erratic absorption, formulation-dependent bioavailability, and wide

intrapatient pharmacokinetic variability that requires blood-level monitoring.

Drugs identified as having narrow therapeutic indices are designated as NTI drugs by the

Secretary of the N.C. Department of Health and Human Services upon the advice of the

State Health Director, the N.C. Board of Pharmacy, and the N.C. Medical Board, and are

subject to the provisions of NCGS 90-85.28(b1).

The list of NTI drugs is reviewed on an annual basis and submitted to the Office of

Administrative Hearings by the N.C. Board of Pharmacy for publication in the N.C.

of drugs designated as NTI. Refer to G.S. 90-85.27 through G.S. 90-85.31 in Subsection

5.8 for information regarding generic substitution, and Subsection 5.9.1 for information

regarding NADAC generic rate or MAC Overrides.

5.12 Billing for Partial Fills

Medicaid shall not pay for medications that the beneficiary has not received. Pharmacists

cannot issue an I owe you (IOU) to a beneficiary when the pharmacy is unable to

dispense the full amount of a prescription and then bill Medicaid for the total quantity of

the prescription. If the remaining quantity is not dispensed and the pharmacist has

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received payment for the total quantity prescribed, it is considered fraudulent and

appropriate action will be taken.

5.13 Incorrect Units for Unbreakable Packages

Billing inaccurate package sizes creates extra costs and delays for the Medicaid programs

when collecting drug rebates from manufacturers. Frequently, the quantity billed for

drops does not match the package size, such as, 5 ml is billed for the 10 ml NDC. Bill the

quantity that matches the package size for the NDC billed. If a different package size is

used for the refill, the prescription must be updated to match the drug dispensed with the

drug on the label, as is required by law.

The Outpatient Pharmacy Program accepts metric decimal quantities. The actual

manufacturer package size (or multiples of the package size) must be indicated on the

claim.

The table below shows some examples of NDCs and the correct corresponding package

size that must be used when billing these products. For example, Lovenox must be billed

in milliliters, so if 10 syringes are dispensed for the NDC indicated below, the metric

decimal quantity would be 6 ml.

NDC Drug

Metric Decimal

Quantity

00075150616

Nasacort AQ Nasal Spray

16.5

00597001314

Combivent Inhaler

14.7

00186107008

Rhinocort AQUA Nasal Spray

8.6

00075062160

Lovenox 60mg prefilled syringe

0.60

00013830304

Xalatan 0.005% Eye Drops

2.5

00069313019

Zithromax 200mg/5ml Suspension

22.5

00065064835

Tobradex Eye Ointment

3.5

00054309036

Butorphanol 10mg/ml Spray

2.5

00085113201

Proventil HFA 90 mcg Inhaler

6.7

61570003775

Viroptic 1% Eye Drops

7.5

5.14 Beneficiary Management Lock-In Program

The North Carolina Administrative Code, 10A NCAC 22F .0704 and 10A NCAC 22F

.0104, Session Law 2015-241, Section 12F.16.(l), along with 42 CFR 431.54 and the

State Plan Amendment supports the State’s development of procedures for the control of

beneficiary overutilization of Medicaid benefits which includes implementing a

Beneficiary Management Lock-In program. NC Medicaid has developed criteria for

inclusion in the Beneficiary Management Lock-In Program.

A Medicaid beneficiary identified for the lock-in program is restricted to a single

prescriber and pharmacy in order to obtain opioid analgesics and benzodiazepines. The

beneficiary may request two prescribers in the event one prescriber is responsible for

prescribing benzodiazepine medications and the other prescriber is responsible for

prescribing opiate medications or when both prescribers are practicing in the same clinic.

The beneficiary may request two separate pharmacies when one pharmacy dispenses

benzodiazepine medications, and the other pharmacy is responsible for dispensing opiate

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medications. A secondary pharmacy may also be allowed temporarily if the primary

pharmacy does not have the drug in stock. The beneficiary shall obtain all prescriptions

for these medications from their lock-in prescriber and lock-in pharmacy in order for the

claim to pay. Claims submitted that are written by a prescriber or filled at a pharmacy

other than those listed on the lock-in file are denied.

A beneficiary who qualifies for the program shall be notified and locked in for two years

after which time they shall be removed from the program. Once released from the lock-in

program, prescription claims continue to be monitored. If a beneficiary meets the criteria

again after being released from the program, they shall be re-identified for the lock-in

program. The beneficiary cannot change their lock-in prescriber or pharmacy without

authorization from NC Medicaid.

5.14.1 Inclusion in the Beneficiary Management Lock-In Program

A NC Medicaid beneficiary shall be locked-in to one prescriber and one

pharmacy for controlled substances categorized as opiates or benzodiazepines

when one or more of the following criteria are met:

a. Benzodiazepines: ten (10) or more claims in two (2) consecutive months

when not medically necessary.

b. Opiates: ten (10) or more claims in two (2) consecutive months when not

medically necessary.

c. Receiving prescriptions for opiates from four (4) or more prescribers in two

(2) consecutive months when not medically necessary.

d. Receiving prescriptions for benzodiazepines from four (4) or more prescribers

in two (2) consecutive months when not medically necessary.

5.14.2 Exclusions from the Beneficiary Management Lock-In Program

a. A beneficiary with certain cancer diagnoses within the last 12 months

b. A beneficiary with a living arrangement indicating they reside in a skilled

nursing facility

c. A beneficiary under the age of 18 years old

d. A beneficiary with a current hospice indicator on file

e. Drugs containing buprenorphine that are specifically indicated for the

treatment of OUD; and

f. A beneficiary with a diagnosis of sickle cell disease.

5.14.3 Emergency Supplies for the Beneficiary Management Lock-In

Program

The N.C. Medicaid Program shall reimburse an enrolled Medicaid pharmacy for

a four (4)-day supply of a prescription dispensed to a beneficiary locked into a

different pharmacy or prescriber in response to an emergent situation. The

provider shall be paid for the drug cost and a dispensing fee and the beneficiary

shall be responsible for the appropriate copayment. One emergency occurrence is

reimbursed per beneficiary during each year of the two (2) year lock-in period.

Paid quantities for more than a four (4)-day supply are subject to recoupment.

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6.0 Provider(s) Eligible to Bill for the Procedure, Product, or Service

To be eligible to bill for the procedure, product, or service related to this policy, the provider(s)

shall:

a. meet Medicaid qualifications for participation;

b. have a current and signed Department of Health and Human Services (DHHS) Provider

Administrative Participation Agreement; and

c. bill only for procedures, products, and services that are within the scope of their clinical

practice, as defined by the appropriate licensing entity.

6.1 Provider Qualifications and Occupational Licensing Entity Regulations

In order to participate in the Medicaid Outpatient Pharmacy Program, pharmacists shall

abide by the rules and regulations of the program, be in compliance with Title VI of the

Civil Rights Act, agree that NC Medicaid or its DHHS designated contractors may

conduct audits as necessary, and accept payment for covered services as payment in

full. Pharmacies shall operate under permit or license to dispense drugs issued by the

appropriate state or federal authority.

6.2 Filling Prescriptions

A provider of prescribed drugs shall file prescriptions numerically and in chronological

order, either in normally occurring order with other prescriptions filled by the provider or

in a separate file and each authorized refill must be recorded. Electronic versions of

prescriptions are acceptable if they can be readily retrieved and the electronic images are

retained according to the provider’s NC Medicaid enrollment agreement. Refer to

Subsection 7.2, Record Retention.

6.3 Changes in Pharmacy Status

Providers are responsible for notifying NC Medicaid within 30 calendar days when

information related to their business or practice changes. Refer to the NC Tracks website

at http://www.nctracks.nc.gov/provider/cis.html

or Medicaid’s website at

https://medicaid.ncdhhs.gov/ for the Provider Change form or Provider Enrollment

packet and additional information required for submission regarding the change if

applicable.

NC Medicaid shall be notified of the following changes:

a. Change of Ownership

The pharmacy shall apply for a new provider number and complete a new

participation agreement and Electronic Commerce Services agreement if there is an

ownership change of greater than 50 percent.

b. Change of Pharmacy Name and Tax Name

c. Change of Billing Address

d. Change of Site (physical location) Address

e. Change of Billing Contact Information or Site Contact (physical location)

Information such as

change of telephone number, fax number and e-mail

address.

f. Change to National Provider Identifier (NPI)

g. Change of Tax Number

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h. Change in Pharmacy Permit

i. Closing a Pharmacy or Voluntary Participation Termination

7.0 Additional Requirements

Note: Refer to Subsection 2.2.1 regarding EPSDT Exception to Policy Limitations for a

Medicaid Beneficiary under 21 Years of Age.

7.1 Compliance

Provider(s) shall comply with the following in effect at the time the service is rendered:

a. All applicable agreements, federal, state and local laws and regulations including the

Health Insurance Portability and Accountability Act (HIPAA) and record retention

requirements; and

b. All NC Medicaid’s clinical (medical) coverage policies, guidelines, policies, provider

manuals, implementation updates, and bulletins published by the Centers for

Medicare and Medicaid Services (CMS), DHHS, DHHS division(s) or fiscal

contractor(s).

7.2 Record Retention

Refer to the provider enrollment agreement for information on the record retention

requirements for the Medicaid program.

Pharmacy providers utilizing automated data processing systems as record keeping

systems shall be able to produce sight-readable documents of all original and refilled

prescription information. The term sight-readable means that a representative of the State

of North Carolina shall be able to examine the record and read the information from a

electronic source, or a hard-copy printout.

Medicaid records must be easily retrievable and kept on-site. Payments that cannot be

audited because records are not easily retrievable and on-site are subject to recoupment.

7.3 Pharmacy Audits

Pharmacy records are audited periodically. The purpose of these audits is to ensure that

the contractual agreement with NC Medicaid is being upheld. This contractual agreement

between the pharmacy provider and NC Medicaid requires that the provider agrees to:

a. file prescriptions numerically and in chronological order on-site, either in normally

occurring order with other prescriptions filled by the provider or in a separate file;

b. maintain as a permanent record on-site, an individual prescription for each drug

submitted for reimbursement;

c. maintain as a permanent record on-site, purchase invoices representing the cost paid

for all covered drugs and supplies reimbursed by NC Medicaid; and

d. follow rules published by the N.C. Board of Pharmacy for manual and computerized

record-keeping related to drug ordering, dispensing, filling, and refilling.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 21

7.4 Medicaid Recoupments

The Program Integrity Section conducts regular post payment reviews in an ongoing

attempt to ensure that Medicaid payments are made only for the services that are covered

under Medicaid policy. When overpayments are identified, the provider is given written

information about the errors and is required to refund the overpayment amount. It is vital

that providers use these overpayment notices to educate billing staff concerning the

importance of following policies. If additional billing guidance is needed, the provider

may request a visit from NC Medicaid’s fiscal agent’s Provider Services unit.

Overpayments are addressed in the following ways:

a. NC Medicaid shall seek restitution of any and all improper payments made to

providers by the Medicaid programs. Recovery may be by lump sum

payment, by a negotiated payment schedule not to exceed one (1) year or by

withholding from the provider’s pending claims the total or portion of the

recoupment amount.

b. A provider may argue all or a part of a recoupment imposed by NC Medicaid

by requesting a Reconsideration Review of the investigative findings and,

thereafter, an Executive Decision.

To keep recoupment amounts to a minimum, NC Medicaid encourages providers to refer

to the general bulletins and medical coverage policy information available on Medicaid’s

website at https://medicaid.ncdhhs.gov/

. If you or your staff have questions about the

policies or billings, it is vital to contact DHHS fiscal contractor’s Provider Services unit

at 800-688-6696.

Questions may be addressed to NC Medicaid’s Chief Hearing Officer at 919-814-

0090 or the NC Medicaid Office of Compliance and Program Integrity at

919-527-7700.

7.5 Emergency Preparedness Protocol

In the event of a state of emergency or disaster declared by the NC Governor, FEMA, or

the US President, the following protocol must be enacted at the direction of the NC

Secretary of Health and Human Services to prevent a significant disruption to the access

of life saving prescriptions medications for NC Medicaid beneficiaries:

a. Waive utilization management requirements (that is PAs where applicable) and lift

“refill -too -soon” edits.

b. Allow an affected enrollee to obtain the maximum extended day supply, if requested

and available at the time of refill.

Once the Emergency Preparedness Protocol is enacted, NC Medicaid enrolled pharmacy

providers shall submit these pharmacy claims with “09” (Emergency Preparedness) in the

PA Type Code field and a valid value for an E.R override in the Reason for Service,

Professional Service and Result of Service fields to override a denial for an early refill.

Values cannot be placed in the Submission Clarification Code field. This early refill

override for emergency preparedness is allowed for all medications. Co-pay requirements

are also applicable to these pharmacy claims. The use of this override is allowed while

the state of emergency order remains in place.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 22

8.0 Policy Implementation/Revision Information

Original Effective Date: January 1, 1999

Revision Information:

Date

Section Revised

Change

09/01/2005

All sections and

attachment(s)

Changes were made throughout the policy to correspond with

approved amendments to the State Plan.

11/01/2005

Subsection 5.6.1 and

Attachment G

Co-payment information was updated to reflect a change in

the State Plan.

12/01/2005

Subsection 2.2

The Web address for DMA’s EDPST policy instructions was

added to this section.

02/01/2006

Attachment A

Billing information for drugs covered under hospice was

added to the attachment as section I and the remainder of the

attachment was renumbered accordingly.

05/01/2006

Subsection 4.1 and

Attachment G

Erectile dysfunctions drugs and anorexia, weight loss and

weight gain drugs were added to the list of non -covered

services in compliance with mandated legislation.

05/01/2006

Subsection 5.2.3

Information regarding how to bill for drugs that are packaged

in an unbreakable package was clarified.

05/01/2006

Subsection 5.2.4

Service requirements for Quantity and Episodic Drugs were

added to the policy.

05/01/2006

Attachments A, Item

Information regarding cost avoidance claims processing was

clarified.

05/01/2006

Attachment P

The list of Episodic Drugs Quantity Dispensing Limits was

added to the policy

06/01/2006

Subsection 5.1, 5.1.1,

and 5.1.2

The established limit of six prescriptions per month was

deleted. Policy requirements associated with the new

prescription limit including the medication therapy

management program requirements were added to the policy.

06/01/2006

Subsection 5.3

This section pertaining to the recipient opt-in program was

deleted and replaced with section 5.1.3.

06/01/2006

Subsection 5.4

This section pertaining to the establishment of a pharmacy of

record was deleted from the policy.

06/01/2006

Attachment A,

Section E

Procedural information related to the six prescription

payment for the pharmacy of record was deleted from the

policy and the remaining sections were renumbered

accordingly.

06/01/2006

Attachment A,

Section Q.5

Information related to pharmacy of record adjustment

requests was deleted from the policy.

06/01/2006

Attachment A,

Section R

Procedural information related to exemptions from the

prescription limitation was added to the policy.

06/01/2006

Attachment A,

Section S

Information related to the recipient opt-in program was added

to the policy.

06/01/2006

Attachment A,

Section T

Information related to the Medication Management Fee was

added to the policy.

06/01/2006

Attachment B

The Six-Prescription Limit Override form was deleted from

the policy.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 23

Date

Section Revised

Change

07/01/2006

Throughout

The term “dispensing fee” changed to “professional services

fee.”

07/01/2006

Subsection 5.1.1

The first sentence was revised to indicate that pharmacists

may override the monthly prescription limit with three

additional prescriptions per recipient per month for recipients

aged 21 and older. The second sentence was revised to

indicate that the decision to override the monthly prescription

limit is at the discretion of the pharmacist and does not

require consultation with the recipient’s physician.

07/01/2006

Subsection 5.1.3

The sentence pertaining to the systematic removal of

recipients from the Opt-in Program was rewritten to clarify

the process.

07/01/2006

Subsection 7.1 and

7.2

Clarification was added to indicate that pharmacy records

must be maintained on-site.

07/01/2006

Subsection 7.3

The phone number for the DMA Pharmacy Review Officer

was corrected.

12/01/2006

Subsection 2.2

The special provision related to EPSDT was revised.

12/01/2006

Sections 3.0, 4.0, and

5.0

A note regarding EPSDT was added to these sections.

03/01/2007

Attachment A,

Section H

A requirement for the ICD-9-CM code to appear at the

bottom of the form was added.

03/01/2007

Subsection 5.8.1 and

Attachment A,

Section I

Removed references to NCPDP 1.1 batch billing

03/01/2007

Attachment A,

Section I

Added a requirement to bill claims over $9,999.00 on paper

05/01/2007

Subsection 5.6

Information regarding prescription drugs requiring prior

approval was clarified.

05/01/2007

Subsections 5.7 and

5.7.1

Clarified paragraphs regarding North Carolina law.

05/01/2007

Sections 2 through 5

EPSDT information was revised to clarify exceptions to

policy limitations for recipients under 21 years of age.

08/01/2007

Subsection 5.1,

subsections 1

through 4;

Attachment A

Changed references to Medication Therapy Management

Program to Focused Risk Management (FORM) Program;

updated requirements.

08/01/2007

Subsection 5.1.3

Clarified parameters for removal from the opt-in program.

08/01/2007

Subsection 5.1.5

Added new section on FORM process oversight.

08/01/2007

All sections and

attachment(s)

Changed “professional services fee” to “dispensing fee.”

08/01/2007

Attachment A, S.2

Updated contact information.

11/01/2007

Subsection 5.7

Added the information that DMA may use a certification

form and procedures for medically necessary brand-name

drugs.

11/01/2007

Attachments A and F

Added clarification for claims submitted by 340B providers.

11/01/2007

Attachment A, letter

Added narcotic analgesics and narcotic analgesic

combination drugs to the list of those that don’t allow a

hospice edit override.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 24

Date

Section Revised

Change

11/01/2007

Attachment E, E.3

Changed last paragraph to read “… except in three areas:”

and added the third item (letter c).

01/01/2008

Subsections 5.1.2,

5.1.3

Added the word “unduplicated” to references to 11 or 12

prescriptions.

07/01/2008

Subsection 2.2

Added legal citation for EPSDT information.

07/01/2008

Subsection 4.2

Added drug samples and drugs obtained from patient

assistance programs to non-covered services.

10/10/2008

Subsection 5.9;

Attachment A,

subsections B.3, B.5,

and G

Added instructions for the Enhanced Specialty Discount

Drug List; renumbered old subsections 5.9 through 5.12 to

5.10 through 5.13.

02/01/2009

(eff.

04/01/2008)

Attachment N

Revised description of Prescription Advantage List.

05/01/2009

Attachment D

Added tacrolimus to the list of Narrow Therapeutic Index

drugs.

06/01/2009

(eff.

05/22/2009)

Attachment H

Added DAW 8 to the list of codes for dispense as written.

06/01/2009

Attachment J

In the Note to Item 5, corrected “six-prescription limitation”

to “eight-prescription limitation.” This is a correction of an

oversight, not a change in policy.

06/01/2009

Attachment O

Added Zolpidem and Zaleplon to their respective drug

classes; deleted GCN14281 from the Halcion and Triazolam

row. This is a correction of an oversight, not a change in

policy.

08/01/2009

Attachment H

Added prescription origin codes.

08/01/2009

Attachment O

Added triptans to the episodic drug list.

10/05/2009

Subsection 5.8 and

Attachment A, item

B.4

The maximum allowable cost was change from 150% to

190% of the lowest priced generic.

10/05/2009

Attachment A, item

B.3

Methodology for the cost of the drug was changed from the

Average Wholesale Price - 10% to the WAC + 7 percent; the

federal or state MAC price; the enhanced specialty discount,

if applicable; or the usual and customary charge and to

indicate that WACs are updated weekly via File Transfer

Protocol (FTP) from First Data Bank.

10/05/2009

Attachment F, item

The calculated Medicaid price was changed from the MAC

price or Average Wholesale Price - 10 % to the MAC price or

the WAC + 7% + the dispensing fee.

12/01/2009

Subsection 4.2

Added o: Drugs used for the symptomatic relief of cough and

colds that contain expectorants or cough suppressants

12/01/2009

Attachment F, k.

Added t: Drugs used for the symptomatic relief of cough and

colds that contain expectorants or cough suppressants

07/01/2010

All sections and

attachment(s)

Policy Conversion: Implementation of Session Law 2009-

451, Section 10.32 “NC HEALTH

CHOICE/PROCEDURES FOR CHANGING MEDICAL

POLICY.”

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 25

Date

Section Revised

Change

08/15/2010

Attachment E

Revised following sections to limit use of 04 Lost

Prescription override code to one occurrence on one date of

service each 365-day time period: C.2., G.6.j., G.9., G.10.

Overutilization (ER).

Corrected the word “Point” in the title of section G.

08/26/2010

Subsection 5.14

Implementation of Recipient Management Lock-In Program.

Added sections 5.14 - 5.14.3.

08/31/2010

Section 8.0

Implementation Table updates

09/14/2010

Header

Corrected revised date to August 26,2010

12/15/2010

Subsection 5.1.2

Eliminate Focused Risk Management (FORM) Program

12/15/2010

Subsection 5.1.3

Delete reference to FORM

12/15/2010

Subsection 5.1.5

Eliminate FORM Process oversight

12/15/2010

Attachment A (S.1)

Delete reference to FORM

12/15/2010

Attachment A (T.)

Delete Professional Services Fee for FORM program

12/15/2010

Subsection 5.2.4.c

Delete reference to Prescription Advantage List

12/15/2010

Subsection 5.6

Subsection 5.6 Prescription Drugs Requiring Prior

Authorization moved to Subsection 5.1 Prior Approval

12/15/2010

Subsection 5.7

Updated section with new legislative language to allow

substitution of a brand name drug when the net cost of the

brand name drug is less than the generic version

12/15/2010

Subsection 5.7.1

Updated section with new legislative language to allow

substitution of a brand name drug when the net cost of the

brand name drug is less than the generic version

12/15/2010

Subsection 5.7.2

Removed atypical antipsychotics from this section

12/15/2010

Subsection 5.8.1

Added language to allow prior authorization on brand-name

medically necessary drugs (DAW1)

12/15/2010

Subsection 5.13

Eliminate Prescription Advantage List

12/15/2010

Subsection 7.2

Removed reference to 5 year record retention requirement

and inserted reference to Basic Medicaid Billing Guide for

record retention policy

12/15/2010

Subsection 7.3

Removed reference to 5 year record retention requirement

12/15/2010

Attachment E, E.3

Patient Counseling -

Impact on

Pharmacies (d.)

Removed reference to 5 year record retention requirement

12/15/2010

Attachment N

Eliminate Prescription Advantage List

04/13/2011

Subsection 4.2

Added: All legend vitamins and mineral products, except

prenatal vitamins and fluoride

04/13/2011

Attachment F

Added: All legend vitamins and mineral products, except

prenatal vitamins and fluoride

01/01/2012

Subsection 5.7

Added: Automatic Refills

01/01/2012

Attachment A

Added: C8 Claims Processing for Selected DME Products

01/01/2012

Attachment A

Removed: K Billing for Allergy Vaccines

01/01/2012

Attachment E

Added: Only one 5-consecutive day occurrence each 365-day

time period will be allowed for non-controlled medications

TO C2, G6, G9 and G10.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 26

Date

Section Revised

Change

03/12/2012

All sections and

attachment(s)

To be equivalent where applicable to NC DMA’s Clinical

Coverage Policy #1A-5 under Session Law 2011-145,

Section 10.41(b).

05/01/2012

Subsection 5.9

Updated the State Maximum Allowable Cost (SMAC)

language

05/01/2012

Subsection 5.9.3

Add Prenatal Vitamins to the SMAC section

05/01/2012

Attachment A, B.4

Updated the State Maximum Allowable Cost (SMAC)

language

05/01/2012

Attachment B

Updated attachment to reflect NCPDP D.0

05/01/2012

Attachment H

Updated attachment to reflect NCPDP D.0

08/16/2012

Attachment A

Removed specific rates on dispensing fees, effective

2/1/2012. Added link to State Plan,

(

http://www.ncdhhs.gov/dma/plan/) Attachment 4.19-B,

Section 12, Page 1a for dispensing fees.

08/16/2012

Attachment A

Added link to NCEAC website, State Plan,

(http://www.ncdhhs.gov/dma/plan/) Attachment 4.19-B,

Section 12, Page 1a

08/16/2012

Attachment F

Removed WAC +7%, effective 2/1/2012. Added NCEAC.

01/31/2013

All sections and

attachment(s)

Changed recipient to beneficiary

01/31/2013

All sections and

attachment(s)

Changed DUR alert titles to new ones under NCPDP D.0

01/31/2013

Subsection 5.1

Removed reference to terminated Clinical Coverage Policy

No. 9B, Prior Authorization for Outpatient Pharmacy Point

of Sale Medications.

01/31/2013

Subsection 5.11

Added new section 5.11 Hemophilia Specialty Pharmacy

Program

01/31/2013

Attachment A, B.3

Added references to new Hemophilia Specialty Pharmacy

program

01/31/2013

Attachment A, B.6

Added new section B.6 Hemophilia Specialty Pharmacy

Program

01/31/2013

Attachment F, g.

Added reference to new Hemophilia Specialty Pharmacy

Program

02/07/2013

Subsection 5.3

Removed Subsection 5.3 Prescription Limitations

02/07/2013

Subsection 5.3

(New)

Added new Subsection 5.3 for CCNC medication

therapy management for polypharmacy and low

adherence

02/07/2013

Attachment A, C.2.b

Removed reference to prescription limitations

02/07/2013

Attachment A, H.

Removed reference to prescription limitations

02/07/2013

Attachment A, I.

Removed reference to prescription limitations

02/07/2013

Attachment A, Q

Removed indicating exemption from the prescription

limitations

02/07/2013

Attachment A, R.1 –

R.3

Removed Recipient Opt-In program sections

02/07/2013

Attachment B

Removed references to prescription limitations

02/07/2013

Attachment H

Removed references to prescription limitations

02/07/2013

Attachment J

Removed references to prescription limitations

02/07/2013

Attachment K

Removed references to prescription limitations

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 27

Date

Section Revised

Change

07/01/2013

All sections and

attachment(s)

Removed references to paper billing, manual claims, and

Pharmacy Adjustment Claim Forms

07/01/2013

All sections and

attachment(s)

Removed references to Hewlett Packard, (HP) or ACS/Xerox

and replaced them with Computer Science Corp., (CSC)

07/01/2013

Attachment A, C.1

Removed Requesting Online Point-of-Sale for Pharmacy

Claims

07/01/2013

Attachment A, C.2

Amended Online Point of Sale Processing Hours to Online

Point of Sale Down Time

07/01/2013

Attachment A, C.3

Amended Placeholder for Compound Prescriptions Claims on

Point-of-Sale to Compound Prescription Claims on Point-of-

Sale

07/01/2013

Attachment A, C.4

Amended Point-of –Sale Claims over $9,999

07/01/2013

Attachment I

Removed entire attachment: Pharmacy Online Request for

Medicaid and NCHC Claims

07/01/2013

Attachments J, J-1, J-

Removed entire attachments: Instructions for Completing the

manual Pharmacy Claim Form, Example of Manual Claims

Form, and Example of Manual Claim Form for Compound

Drug

07/01/2013

Attachment K

Removed entire attachment: Completing the Pharmacy

Adjustment Request Form

07/01/2013

Attachment L

Renumbered to now become Attachment I with the deletions

to Attachments I, J, K. Updated references throughout the

policy to reflect this change.

07/01/2013

Attachment I

Amended Pharmacy Remittance Advice (RA)

07/01/2013

Attachment H

Added Origin Code: 5 - Pharmacy

10/01/2015

All Sections and

Attachments

Updated policy template language and added ICD-10 codes

to comply with federally mandated 10/1/2015

implementation where applicable.

10/01/2016

All Sections and

attachments

Updated pricing guidelines around National Average Drug

Acquisition Cost (NADAC) pricing

10/01/2016

Section 3.4

Changed NDC to be require on claims

10/01/2016

Section 4.2.1

Added Vitamin-D and vaccines as covered items

10/01/2016

Section 5.2

Clarified PDL webpage information

10/01/2016

Section 5.4.1

Removed 90 days supply requirement for Depo-Provera

10/01/2016

Section 5.5.1

Clarified Medicaid Co-Payment Requirements

10/01/2016

Section 5.5.2

Corrected Co-payment Exemptions for Medicaid

Beneficiaries

10/01/2016

Section 5.8.2

Clarified Generic Substitution for Narrow Therapeutic Index

Drugs

10/01/2016

Section 5.10

Eliminated Enhanced Specialty Discount on Single Source

Specialty Drugs

10/01/2016

Section 5.15

Section changed to 5.14 and Updated Beneficiary

Management Lock-In Program

10/01/2016

Section 5.15.3

Eliminated Beneficiary Management Lock-In Oversight

10/01/2016

Section 7.4

Updated Medicaid and NCHC Recoupments

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 28

Date

Section Revised

Change

10/01/2016

Attachment A

Removed Section B.5 Enhanced Specialty Discount Drug

List; Defined Section E.1 Full Dual Eligible Beneficiaries;

Added Section E.2 QMB Beneficiaries; Updated Section F.

Billing Remainder of a Third-Party Prescription to Medicaid;

Updated Section I. Billing for Drugs Covered under Hospice;

Added Vaccine billing procedures

05/01/2017

Attachment E

Added language regarding change in early refill alert for

benzodiazepines and opioid analgesics

05/01/2017

Section 5.7

Added reminder that pharmacies may use refill reminders to

encourage a beneficiary’s adherence to their medication

regimen for medications the beneficiary is currently taking

06/01/2017

All Sections and

Attachments

Policy posted 06/01/2017 with an Amended Date of

05/01/2017

11/01/2018

Section 4.2.1(b)

Added language to reference exception to Rebate agreement

requirement for CroFab

11/01/2018

Section 4.2.1 (g)

Added description for the living arrangement codes

11/01/2018

Section 5.9

Added Provider State MAC Inquiries as 5.9.2 under section

5.9 Maximum Allowable Cost (MAC)

11/01/2018

Section 5.9.2 (a)

Added e-prescribing to language; Section 5.9.2 amended to

5.9.3

11/01/2018

Section 5.9.3

Amended to 5.9.4

11/01/2018

Section 7.5

Added new Subsection “Emergency Preparedness Protocol”

11/01/2018

Section 4.2.1(a) and

(m)

Change to Refer to Subsection 3.2.1(b)

11/01/2018

Section 4.2.1(m)

Removed the word “and” in last sentence

11/01/2018

Section 5.4

Remove words Days and days’

11/01/2018

Section 5.4.3 second

paragraph

Removed “but not limited to”

11/01/2018

Section 5.5.2 first

sentence

Removed the word “any”

11/01/2018

All sections and

attachments

Replaced “recipient” with “beneficiary”

11/01/2018

All sections and

attachments

Replace “patient(s)” with “beneficiary”

11/01/2018

All sections and

attachments

Replaced “DMA” with “NC Medicaid”

11/01/2018

Attachment E F.1

Changed days’ to day

11/01/2018

Section 3.2.1

Removed word of

11/01/2018

Section 6.2

Replaced as long as with if

11/01/2018

Section 5.1

Added sentence Medicaid and NCHC shall require prior

authorization for selected prescription drugs.

11/15/2018

All sections and

attachments

Policy posted on this date, with an Amended Date of

November 1, 2018

7/22/2019

Subsection 3.2.1

Add clarification related FDA indication of drugs,

7/22/2019

Subsection 5.5.2

Add copay exemption for federally recognized tribal

members

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 29

Date

Section Revised

Change

7/22/2019

Subsection 7.3

Remove “on-site” related to audits and add requirement for

maintaining invoices as a permanent record.

7/22/2019

Subsection 5.9.1

NADAC generic rate and MAC override - Added DAW 7,

DAW 8, DAW 9

7/22/2019

Subsection 6.2

Filling Prescriptions- Replaced record retention policy with

provider’s enrollment agreement

7/22/2019

Subsection 7.2

Record Retention - Removed “refer to NCTracks Claims

and Billing Guide” and corresponding link and “current

information; replace with provider enrollment agreement

7/22/2019

Attachment A B4

Revised “340B Provision as It Pertains to the Cost for the

Drug” to remove all “plus the dispensing fee” and reference

to Medicaid website for state upper limits for 340B

purchased hemophilia drugs

7/22/2019

Attachment A C1

Revised A.1 Obtaining Point-of-Sale Software from a

Vendor

to add “Override MAC prices with DAW 9” (insert as d;

previous d became e.)

7/22/2019

Attachment F (g)

Revised 340B Provisions to remove all “plus the dispensing

fee” and reference to Medicaid website for state upper limits

for 340B purchased hemophilia drugs

7/22/2019

Attachment F (h)

Created 1-4 format for when NADAC generic rate and

MAC overrides are allowed to include DAW 7 DAW 8 and

DAW9

7/22/2019

Attachment H (3)

Added to “Dispense as written codes currently” DAW codes

2, 3, 4, 6, 9 with descriptions

7/22/2019

Footer and

Attachment A

Remove Public Comment from footer in page 41 through

71; and remove underline in attachment A

01/13/2020

Table of Contents

Updated policy template language, “To all beneficiaries

enrolled in a Prepaid Health Plan (PHP): for questions about

benefits and services available on or after implementation,

please contact your PHP.”

01/13/2020

Attachment A

Added, “Unless directed otherwise, Institutional Claims

must be billed according to the National Uniform Billing

Guidelines. All claims must comply with National Coding

Guidelines”.

05/07/2021

Section 5.1, Section

5.4.3 and

Attachment K

List of Pharmacy Prior Approval Drugs and Criteria added

in Attachment K; links updated to NC Medicaid Website

throughout policy from NC Tracks. No change made to

Amended Date

07/1/2021

Sections 5.4, 5.41,

5.42 and

Attachment F

Allowing coverage of claims for up to 12 months supply of

oral birth control products and for claims for up to a 90 day

supply of maintenance medications.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 30

Date

Section Revised

Change

06/15/2022

Section 5.14

Clarification of current operational procedures for

beneficiary selection, choice of providers and eliminating

the word “anxiolytics” as the drugs in this category are now

listed with GC3 for benzodiazepines.

06/15/2022

Policy posted 06/23/2022 with an amended date of

06/15/2022

10/01/2022

Section 5.5.1

Medicaid prescription copay changed to $4.00

10/01/2022

Section 5.5.3

Federal Family Poverty Limits changed for NCHC and

Class L of NCHC beneficiaries removed

10/01/2022

Section 5.14

Documenting current operational procedures for the lock-in

program regarding drugs excluded from the program

10/01/2022

Policy posted with and amended date of 10/01/222 with an

effective date of 7/1/22

4/15/2023

All Sections and

Attachment(s)

Updated policy template language due to North Carolina

Health Choice Program’s move to Medicaid. Policy posted

4/15/2023 with an effective date of 4/1/2023.

07/15/2024

Section 3.2.1

Added “unless approval is given by DHB” to clarify that

the drug given must be used for FDA indications unless

approved by DHB

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 31

Date

Section Revised

Change

07/15/2024

Section 3.2.2

Added new section with some paragraphs moved from 3.2.1

Section 1927(d)(1)(B)(i) of the Social Security Act allows

Medicaid to restrict coverage for an outpatient drug if the

prescribed drug is not for a medically accepted indication.

Section 1927(k)(6) defines a medically accepted indication

as any use for a covered outpatient drug, which approved

under the Federal Food, Drug, and Cosmetic Act, or the use

of which is supported by one or more citations included or

approved for inclusion in any of the compendia:

a. American Hospital

Formulary Service Drug

Information

b. United States Pharmacopeia; or

c. DRUGDEX Information System; or

d. As per 1927(d)(1)(B)(ii), peer-reviewed medical

literature

Providers who determine that the indication or dosing for a

particular drug is medically necessary for a beneficiary, but

those parameters fall outside of the FDA approved

guidelines and evidence-based standards for that drug or NC

Medicaid Drug Criteria for that drug, may make a request

for the medically necessary indication or dosing for a

particular drug.

In order to request approval, providers must submit, along

with the usual drug request forms the required additional

information:

Medical record information to show medical necessity for

the requested drug;

An explanation of what other drugs have been tried or why

they cannot be tried;

An explanation from the prescribing medical professional of

why the FDA approved guidelines and evidence-based

standards for that drug or NC Medicaid Drug Criteria is

insufficient for this patient; and

Compendia/peer-reviewed medical literature supporting the

use of the requested drug (as per 42U.S.C. 1396r

8(g)(1)(B)).

07/15/2024

Section 5.1

Added interim procedure for new to market drugs for fee for

service and managed care plans.

07/15/2024

5.5.2

Added vaccine and vaccine administration as exempt from

copay and Antiretrovirals used to reduce viral load in

members living with HIV

07/15/2024

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 32

Date

Section Revised

Change

07/15/2024

5.14.1

Change the criteria for inclusion into the lock-in program

from 6 or more claims to 10 or more claims and from 3 or

more prescribers to 4 or more and when utilization has been

determined as not medically necessary in compliance with

Session Law 2023-134 House Bill 259.

07/15/2024

Section 5.14.3

Remove verbiage stating that payment will be made only for

the drug for emergency fills as they will now reimburse per

standard emergency fill logic with a dispensing fee

07/15/2024

Section 7.2

Removed CRT, microfiche and microfilm from record

retention requirements and replaced with electronic source

07/15/2024

Section 8.0

Added section 8.0 Drug Donation

07/15/2024

Section 8.1

Added section 8.1 Long Acting Injectable Antipsychotics

(LAIs)

07/15/2024

Attachment A B.1

Added point of sale option for billing vaccines

07/15/2024

Attachment A B.2

Added sentence stating “a dispensing fee, or professional

fee, shall be paid per each covered outpatient prescription.”

Removed previous dispensing fee logic for brand and

generic drugs and replaced with the Cost of Dispensing

study

Removed dispensing fee deduction for repeat drugs in the

same calendar month

07/15/2024

Attachment A B.3

Removed subsequent section containing the definition of

repeat or refill drugs in the same month of service

07/15/2024

Attachment A B.4

Added “The following 340B guidelines apply to the

following entities:

-Covered Entities billing as Outpatient Pharmacy Point-of

sale

-Contract Pharmacies

-Fee-for-service

-Managed Care

-Out-of-state Pharmacy Point-of -sale Providers

-Any other entity billing Pharmacy point-of-sale for 340B

drugs”

07/15/2024

Attachment C-e

Removed “and only the drug cost will be reimbursed.”

07/15/2024

Attachment E D.2

Changed DEA to NPI

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 33

Date

Section Revised

Change

07/15/2024

Attachment F-g

Added The following 340B guidelines apply to the

following entities:

-Covered Entities billing as Outpatient Pharmacy

Point-of sale

-Contract Pharmacies

-Fee-for-service

-Managed Care

-Out-of-state Pharmacy Point-of -sale Providers

-Any other entity billing Pharmacy Point-of -sale for

340B drugs

Added The state will then extract appropriate claims from

rebate invoicing and collection.

The following 340B guidelines apply to the following

entities:

-Providers billing drugs through the Physicians’ Drug

Program

340B providers must be listed on the HRSA website

(http://www.hrsa.gov/opa/).

For 340-B drugs, provider(s) shall bill the cost that is

reflective of their acquisition cost. Provider(s) shall indicate

that a drug was purchased under a 340-B purchasing

agreement by appending the “UD” modifier on the drug

detail.

The state will then extract appropriate claims from rebate

invoicing and collection. This will eliminate duplicate

discounts as the claims will be pulled from rebate

collections.

The following 340B guidelines apply to the following

entities:

-Outpatient Hospitals

340B providers must be listed on the HRSA website

(http://www.hrsa.gov/opa/).

Outpatient Hospitals are reimbursed based on a ratio of cost

to charge. Outpatient Hospitals should submit Usual and

Customary charge (rather than the actual acquisition cost)

for 340B medications on the UB-04 and 837i. 340B status

should be indicated on the UB-04 and 837i using the UD

modifier for outpatient hospital institutional medical drug

claims (O claims).

The state will then extract appropriate claims from rebate

invoicing and collection. This will eliminate duplicate

discounts as the claims will be pulled from rebate

collections .Providers may be responsible for any adverse

financial impact to the State for erroneously billed claims.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 34

Date

Section Revised

Change

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 35

Attachment A: Claims-Related Information

Provider(s) shall comply with the, NCTracks Provider Claims and Billing Assistance Guide, Medicaid

bulletins, fee schedules, NC Medicaid’s clinical coverage policies and any other relevant documents for

specific coverage and reimbursement for Medicaid:

A. General Information

Each time Medicaid services are rendered, the provider must verify the beneficiary’s eligibility on the

date of service through a point-of-sale E1 transaction or through the Eligibility Verification System

for proof of eligibility. The prescription must be verified for coverage. All claim fields must be

completed. The pharmacist shall retain a copy of the claim on file.

Refer to Attachment F for a summary of the billing requirements.

Unless directed otherwise, Institutional Claims must be billed according to the National Uniform

Billing Guidelines. All claims must comply with National Coding Guidelines.

B. Directions for Drug Reimbursement

Reimbursement is determined using the cost per unit times the quantity dispensed plus the dispensing

fee. Reimbursement is limited to the applicable price in effect on the date of service, not on the date

of payment. Refer to Section B.4, Cost of the Drug.

B.1 Vaccines

Vaccines can be billed using a professional claim with the appropriate CPT codes and

the pharmacy shall use their NPI and proper taxonomy to bill vaccines. Vaccines can be

billed also at the point-of-sale.

B.2 Dispensing Fee

A dispensing fee, or professional fee, is paid per each covered outpatient prescription.

The dispensing fee for generic drugs or brand name drugs is based on the Cost of Dispensing

study conducted on behalf of the North Carolina Department of Health and Human Services,

Division of Health Benefits on NC Medicaid’s website at https://medicaid.ncdhhs.gov/

Changes in the dispensing fee amount are reported in the NC Medicaid Pharmacy Newsletters

or on Remittance Advice (RA) banner messages.

B.3 Cost of the Drug

Cost data is currently being obtained from First Data Bank. The cost of the drug is calculated

from the North Carolina Average Acquisition Cost (AAC); North Carolina shall base brand and

generic drug ingredient pricing on an average acquisition cost (AAC). The AAC is defined as

the price paid by pharmacies based on an average of actual acquisition costs determined by a

survey of retail pharmacy providers. The National Average Drug Acquisition Cost (NADAC)

pricing must be used for AAC when available and the lessor of NADAC or Usual and

Customary & Reasonable Charges (UCR) determines the cost of the drug.

If NADAC is unavailable, then the AAC is defined as Wholesale Acquisition Cost (WAC). If

WAC is used then the lessor of WAC; the state MAC price; the hemophilia enhanced specialty

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 36

discount, if applicable; or the UCR determines the cost of the drug. WACs are updated weekly

via File Transfer Protocol (FTP) from First Data Bank. State MACs are updated monthly.

The state MAC lists and the hemophilia enhanced specialty discount list are published on

Medicaid’s website at https://medicaid.ncdhhs.gov/. The A

AC is available in the State Plan,

Attachment 4.19-B, Section 12, Page 1a, on NC Medicaid’s website at

https://medicaid.ncdhhs.gov/

340B Provision as It Pertains to the Cost for the Drug

The following 340B guidelines apply to all of the following entities:

a. Covered Entities billing as Outpatient Pharmacy Point-of sale;

b. Contract Pharmacies;

c. Fee-for-service;

d. Managed Care;

e. Out-of-state Pharmacy Point-of -sale Providers; and

f. Any other entity billing for 340B Outpatient Pharmacy Point-of sale drugs.

340B providers must be listed on the HRSA website (http://www.hrsa.gov/opa/

). 340B

providers must submit the actual purchased drug price in the usual and customary charge field.

Providers who maintain two separate inventories—one for the 340B beneficiaries and a

purchased inventory for non-340B beneficiaries—may not dispense a 340B-purchased drug and

bill Medicaid the calculated Medicaid price for non-340B beneficiaries. For hemophilia drugs,

340B providers may submit the state upper limit established for a 340B purchased hemophilia

drug.

B.4 State Maximum Allowable Cost (SMAC) List

The state MAC list contains products with A-rated equivalents, and, in the great majority of

cases, products marketed by at least two labelers. The State’s MAC reimbursement is based on

the application of a percentage factor applied to the lowest priced generic. In cases where the

calculated MAC rate, based on the primary percentage factor, results in a price less than the

cost of the second lowest generic product, at least an additional 10 percent margin is added to

the cost of the second-lowest drug to establish the MAC price. The MAC pricing factor is set

by NC Medicaid and may change as deemed appropriate.

The additional margin is variable due to the wide range of differences in cost from product to

product. The SMAC list is posted on the NC Medicaid website, https://medicaid.ncdhhs.gov/.

For established generic drugs with only one supplier, the MAC price is established between the

actual acquisition cost and average wholesale price of the generic drug. A minimum

reimbursement of 20 percent above actual acquisition is guaranteed for these drugs. In most

cases, MAC pricing is substantially higher than this 20 percent, which allows the state and

pharmacies to share in the cost savings of using the generic product.

Drugs subjected to MAC pricing must be in adequate supply. Drug shortage information is

verified through national pharmacy websites as well as through information provided by

national drug wholesalers.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 37

Due to the many variations in the ingredients in prenatal vitamins and the corresponding

variation in the ingredient cost, a single MAC rate for prenatal vitamins is established and

maintained. Current marketplace acquisition cost, average wholesale price and wholesale

acquisition cost are evaluated to determine the single MAC rate.

B.5 Hemophilia Specialty Pharmacy Program

The General Assembly [Session Law 2012-142, Section 10.48(a2)] mandates that the N.C.

Medicaid Pharmacy programs establish a specialty pharmacy program for hemophilia drugs.

Refer to Clinical Coverage Policy No: 9B, Hemophilia Specialty Pharmacy Program, on NC

Medicaid’s website at https://medicaid.ncdhhs.gov/

B.6 National Drug Code (NDC)

The NDC is an arrangement of eleven (11) digits used to identify a drug product and package

size manufactured or distributed by a specific manufacturer. It is comprised of three “fields” of

data as follows:

Drug Code

Structure

AAAAA

BBBB

Number of digits

in each field

The

Manufacturer

AAAAA

The Drug

Product

BBBB

The Package Size

Leading zeros must be used for proper placement of numbers or letters in the NDC number

field of the pharmacy claim form or pharmacy software for electronic billing. Failure to record

all 11 digits in the proper position will result in a claim denial.

Such as: Inderal 20 mg Tablet 0046 422 81 must be spaced:

0 0 0 4 6 0 4 2 2 8 1

B.7 Drug Units

All quantities must be submitted in metric units. If the quantity is a decimal, then it must be

billed as such. Refer to Attachment G for the instructions and examples that apply to drug

units.

C. Billing Pharmacy Claims through Online, Real-Time Point of Sale

NC Medicaid mandates that all providers use the online, real-time POS system to process pharmacy

claims. Each pharmacy needs to work with their software vendor regarding online capabilities.

Claims are submitted through the “switching” companies.

The online POS system automatically performs eligibility verification, drug validation, pricing, and

edits and audits followed by Prospective Drug Utilization Review (Pro-DUR) before the pharmacy

dispenses a prescription. Immediate assurance of the amount to be paid for the prescription

reimbursement submitted through online claims is sent on the next check write. POS reduces

follow-up accounting for claims by allowing for the correction of any errors before the beneficiary

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 38

gets the prescription. Pharmacists receive all of the reject codes immediately when a claim is

submitted through POS; other submission methods are limited to returning the first reject

encountered.

The same policies for MAC overrides, co-pay exemption, and prescription limit overrides are in

effect for POS as for other claims processing media.

Refer to Attachment H for a summary of POS codes and other information for current claim

format.

C.1 Obtaining Point-of-Sale Software from a Vendor

Most software vendors are certified as capable of meeting the requirements to bill Medicaid

online. The billing pharmacy provider shall ensure that the software is capable of performing

the following functions:

a. Override rejects for DUR conflicts, when needed, by resubmitting the rejected claim with

DUR reason for service, professional service, and result of service codes.

b. Submit payments from other insurance plans for claims in an “Other Payer” field.

c. Override MAC prices with DAW 1 when proper documentation is provided by the

prescriber.

d. Override MAC prices with DAW 9 when NC Medicaid preferred Brand was dispensed

when generic equivalent is nonpreferred.

e. Send the NPI number as the prescriber identifier.

C.2 Online Point-of-Sale Processing Downtime

Monday 12:01a.m. – 4:00 a.m.

DHHS designated contractor’s

Provider Services unit is available from 8:00 a.m. through 5:00

p.m. weekdays to answer general pharmacy questions at 1-800-688-6696.

All communication/technical POS problems must be directed to your “switch vendor”

especially National Council for Prescription Drug Programs (NCPDP) reject codes 99 for

Host Processing Error.

C.3 Compound Prescription Claims on Point-of-Sale

All compound claims must be submitted at Point-of Sale. Compounds claims at point of sale

are limited to 25 ingredients.

C.4 Point-of-Sale Claims over $9,999

Claims over $9,999 require manual review for validity. POS claims are captured, but the

response is that there is no judgment on beneficiary eligibility or payment until the claim is

manually reviewed assurance that the claim has been accepted and reviewed. Please check your

RA or log into NC Tracks at www.nctracks.nc.gov to check the claim for payment.

C.5 Time Limit for Point-of-Sale Claims

POS claims must be billed within one year of the dispensing date.

C.6 Claims Processing for Selected DME Products

Claims for diabetic test strips, control solutions, lancets, lancing devices, and syringes

submitted at point-of-sale must be billed using the NDC. Test strips must be billed in multiples

of 50 or 51 and syringes and lancets must be billed in multiples of 100. For Medicaid billing, 1

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 39

lancing device equals 1 unit. Rates apply to these diabetic supplies; therefore, no copayments

and no dispensing fees apply. Diabetic supply limits are the same as under the DME Program.

Prior authorization requests for additional quantities or for non-preferred diabetic supplies must

go through the DME Program.

D. Provider Retroactive Pharmacy Claims Billing

When a provider accepts a private beneficiary and bills the private beneficiary personally for

services covered under Medicaid, and the beneficiary is later found to be retroactively

eligible for Medicaid, the provider may file for reimbursement with Medicaid. Upon receipt

of Medicaid reimbursement, the provider shall refund to the beneficiary all money paid by

the beneficiary for services covered by Medicaid, with the exception of any third-party

payments or cost-sharing amounts.

E. Billing Medicare before Medicaid

E.1 Full Dual Eligible Beneficiaries

When a Medicaid beneficiary has both Medicare and Medicaid coverage, pharmacy providers

are required to bill Medicare first for the limited number of pharmaceutical products covered

by that program. If the Medicare reimbursement does not equal 100 percent of the Medicare

allowable rate and not more than the Medicaid allowable rate, the pharmacy provider may

then bill Medicaid for the outstanding balance (coinsurance/deductible).

Due to restrictions imposed by Medicare on some drugs, such as restrictions to certain

diagnoses, an override is available whereby Medicaid can be billed for these drugs when not

covered by Medicare. For example, Imuran and methotrexate are only covered for the

diagnosis of cancer, so Medicaid would need to be billed for any other diagnosis. To override

the edit using POS, place a “1” (numeric) in the PA field.

A co-pay shall not be collected on any of the claims billed to Medicare. Once Medicare has

paid, bill Medicaid for the remaining amount. The system cannot deduct a co-pay for these

crossover claims.

The NC Medicaid Outpatient Pharmacy Program denies specific drugs that must be billed to

Medicare first for an identified beneficiary who is eligible for drug coverage under Medicare

Part B.

Medicaid may be billed for the unpaid portion of a claim paid by Medicare by entering the

following information in the appropriate fields:

1. the amount paid by Medicare in the Other Coverage Field;

2. the Medicaid reimbursement rate in the Amount Billed Field (dollars/cents).

Medicaid pays an amount equal to the Medicare allowable rate less the amount paid by

Medicare.

E.2 Qualified Medicare Beneficiaries (QMB)

QMB Medicaid beneficiaries have both Medicare and Medicaid coverage and pharmacy

providers are required to bill Medicare first for the limited number of pharmaceutical

products covered by that program. Medicaid pays the cost share on these medications.

For QMB claims, the pharmacy shall submit values in any of these three fields (353-NR,

351-NP, and 352-NQ) when applicable for the claim. These fields are used to identify the

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 40

beneficiary’s Medicare Coinsurance, Medicare Deductible, and Medicare Copayment

amounts.

F. Billing Remainder of a Third-Party Prescription to Medicaid

Medicaid is always the payor of last resort when a beneficiary has other insurance that covers

prescription drugs. If a beneficiary has other insurance, such as Medicare, which pays for

prescriptions, that insurance plan must be billed first. Medicaid may be billed for the unpaid portion

of a claim paid by another insurance company by entering the following information in the

appropriate fields on the claim:

1. The amount paid by the other insurance in Other Coverage Field

2. The Medicaid reimbursement rate in the Amount Billed field (dollars/cents)

3. Medicaid pays an amount equal to the Medicaid reimbursement rate less the co-payment, where

applicable, less the amount paid by the other insurance.

Medicaid reimbursement rate

• Amount paid by other insurance

• Medicaid co-payment according to Medicaid Drug and Eligibility files

Medicaid payment

The POS checks for current third-party coverage on the eligibility file. A message is sent back by

the POS system telling the provider that the beneficiary has third-party coverage for that date of

service. The other third party must be billed as the primary payor, and then Medicaid can be billed

as the second payor. In the event that the beneficiary cannot produce another insurance or the

beneficiary states they do not have other insurance, the pharmacy shall use a 01 – No Other

Coverage Identified in the Other Coverage Code, claim segment 308-C8 for NCPDP D.0

transactions. NC Medicaid pays the pharmacy and chases the third party for payment. The

pharmacy cannot be held liable for any payments made in these cases.

d. When a claim is denied for other coverage, the POS system will deny the claim and will be

indicated to submit to another payer.

• Override Codes for Cost Avoidance Process - Claim Segment defined as 308-C8 (Other

Coverage Code)

• Required/Optional/Not Used: Optional

• Field Type: N

• Max length: 2

• North Carolina Medicaid Specifications (override codes)

01= No Other Coverage Identified

02 = Other Coverage Exists - Payment Collected (The member has other coverage and the payor

has returned a payment amount. The payment amount is submitted in field 431-DV to the

secondary payor.

03 = Other Coverage Exists - This Claim Not Covered (Claim not covered under primary Third-

Party Plan. If primary denied the claim as Refill Too Soon, the claim would be submitted to the

secondary payor with the Other Coverage Code 3. In this situation, claim would more than likely be

too early for Medicaid as well)

NC Medicaid Medicaid

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24F27 41

04 = Other Coverage Exists - Payment Not Collected (Used when the member has other

coverage and that payor has accepted the claim but did not return any payment. This would be an

example in which the member had a deductible amount to meet under the primary payor. The

member is responsible for 100% of the payment, and the payor returns 100% of the payment, and

the payor returns $0.)

The override codes listed above will be reported back to Medicaid on a monthly basis.

Example: After third-party insurer has paid, the claim can be billed to Medicaid with the other

coverage amount indicated. For example, if a $100.00 claim is billed to PCS and they pay $65.00

(the beneficiary has a $20.00 co-pay), the claim is then submitted to Medicaid with $100.00 billed

amount and $65.00 in the other coverage field (431-DV).

The system will calculate the Medicaid allowable and then subtract $65.00 from that amount. There

should not be a reference to the $20.00 co-pay.

G. Billing for Nursing Home Prescriptions and IV Therapy

Due to special packaging or storage requirements for nursing home prescriptions and the stability

problems associated with IV therapy, a single prescription may have to be dispensed several times

during the month in small quantities. Because of the special circumstances involved in their

dispensing, prescriptions for nursing home beneficiaries and prescriptions for IV therapy may

be billed once per month. The monthly billed amount should reflect a total of all dispensing for

that one prescription for the month less any credit that might have occurred during the monthly

period.

H. Billing for Drugs Covered under Hospice

A beneficiary who is enrolled in the hospice program is covered under a per diem rate, which

covers all services related to the beneficiary’s terminal illness. The pharmacist is notified via the

POS system if a beneficiary is enrolled in hospice. All drug claims are denied with the message

“beneficiary claim covered by hospice.”

If the drug is to be used for an indication not directly related to the beneficiary’s terminal illness, an

override is available. A “1” entered in the PA field and the ICD-10-CM code for the beneficiary’s

terminal illness entered in the diagnosis field will override the hospice edit. Pharmacists shall not

use the ICD-10-CM code for the indication of the drug.

There are some drug classes where overrides are not allowed. For these drug classes, the claim

denies with Explanation of Benefits (EOB), “Recipient claim covered under Hospice”. These drug

classes include narcotic analgesics and narcotic analgesic combinations, hematinics, antiemetics,

most chemotherapeutics and antineoplastic aromatase inhibitors.

Questions concerning drug coverage for a hospice beneficiary are directed to the beneficiary’s

hospice agency.

Pharmacists shall contact NC Medicaid (919-855-4300) with questions regarding Medicaid or

coverage of pharmacy claims in the drug classes for which overrides are not allowed. If it is

determined that Medicaid coverage is appropriate, the provider is informed of billing instructions at

the time of the call.

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

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24F27 42

I. Compounded Drugs

I.1 Billing for Compounded Drugs

If the compound prescription contains all legend products, then the claim for the compound can

be submitted by using POS (NCPDP D.0).

NCPDP D.0 (POS) Instructions

If the compound is billed using NCPDP D.0 (POS), the total ingredients billed must match the

compound ingredient component count. If they do not match, the claim denies. The cost for

each ingredient must be indicated and the dispensing fee should be included in the total billed

amount listed on the header. If NDCs are included in the compound that are not covered by

Medicaid the claim continues to process with the payable ingredients only. The POS system

assumes “8” in the submission clarification field, which means “PROCESS COMPOUND FOR

APPROVED INGREDIENTS.”

I.2 Reimbursement for Compound Drugs

Medicaid shall reimburse only for federal legend drugs contained in the compound that are

manufactured by companies who have signed a national Medicaid Drug Rebate Agreement

with CMS. If one prescription drug in the compound is not covered under the rebate agreement,

reimbursement is withheld for that drug only. The remainder of the compound is paid if

applicable. OTC products are also only reimbursed if the manufacturer has signed a national

Medicaid Drug Rebate Agreement with CMS and when contained in a compound with at least

one covered legend drug.

I.3 Summary of Compound Drug Reimbursement

Reimbursable compounds:

a. Mixture of two or more physically inseparable ingredients, with at least one legend

ingredient.

b. Only legend drugs from manufacturers who signed the Drug Rebate Agreement will be

reimbursed.

Non-reimbursable compounds:

EOB

Requirement not met

905

A compound without a legend-covered drug

905

A compound with only non-rebate drugs

038

OTC and DESI drugs as only ingredients

009

A compound equivalent to an OTC drug

009

OTC ingredients only

009

Two physically separable drugs (tablets and

capsules) in the same bottle

J. Point-of-Sale Reversals

Claims submitted using POS may be credited with a POS reversal for up to 12 consecutive months

after the dispense date. It is recommended that pharmacies submit reversals weekly or, at a

minimum, monthly. Pharmacies may obtain information on submitting a reversal, if needed, from

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

Amended Date: July 15, 2024

24F27 43

their pharmacy software vendor. DHHS fiscal contractor can reverse claims submitted using POS if

required.

POS reversals may be completed for claims submitted with incorrect quantities or NDCs. POS

reversals also allow the pharmacist to help beneficiaries who need additional medication when they

have already received the maximum number of prescriptions by permitting the reversal of a less

expensive prescription in order to allow billing of a more expensive prescription.

K. High Dosage Edit

The system checks for high dosage by comparing the units that are billed for the days supply limit

indicated with what has been approved by the FDA. If the units billed on the claim exceed this

limit, an edit notifies the provider that the units and days supply need to be verified for accuracy.

To override the edit and indicate that the units and days supply have been verified and are correct,

enter a “2” in the prior authorization field or in the submission clarification field.

L. Time Limit Overrides

NC Medicaid frequently receives requests to waive the federally prescribed 12-consecutive month

claims filing time limit. NC Medicaid has extremely limited authority to override the time limit

when eligibility was not approved within the year or for court decisions or hearings, which

authorize eligibility retroactively. Failure of the provider to file and follow up timely is not a basis

for override and results in denial of claims.

Medicaid claims, other than crossover and third party, must be received by DHHS fiscal contractor

within 365 calendar days from the date of service. Hospital inpatient, long-term care, and home

health claims must be received within 365 calendar days from the last date of service on the claim.

Medicare and Medicaid crossover and other third-party claims must be received within 180

calendar days from the date of payment or denial from the third-party payor or 365 calendar days

from the date of service, whichever is later. Proof that the claim was submitted timely includes:

4. correspondence about the claim received from NC Medicaid or DHHS fiscal contractor;

5. an explanation of Medicare or third-party benefits dated 180 calendar days from the date of

payment or denial;

6. a copy of the remittance and status report (RA) showing the claim pending or denied.

It is the provider’s responsibility to file claims in a timely manner and to follow up within the time

limit for claims not reported back on the RA. When claims are initially filed, providers should

allow approximately 30 calendar days for the transactions to appear on the RA. If there is no

indication on the RA that the claim was received, providers may use NC Tracks or the Automated

Voice Response System to determine the status of the claim. If the claim has not been received by

the DHHS fiscal contractor, providers should resubmit immediately to prevent denial for timely

filing.

M. Pharmacy Remittance Advice

The Remittance Advice (RA) is a computer-generated document showing the status of all claims

submitted to CSC along with a detailed breakdown of payment. The RA is produced at the same

time that checks are issued.

Refer to Attachment I for instructions for using the RA.

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N. Resubmission of Rejected or Denied Claims

N.1 Explanation of Benefit Codes

Rejected or denied claims are identified on the pharmacist’s RA with an explanation of

benefit (EOB) code, which explains why the claim was rejected or denied. The EOB assists

the pharmacist in correcting and resubmitting a rejected or denied claim.

N.2 Resubmitting a Claim

All claims must be submitted to CSC within 365 calendar days of the date of service. If a

claim is paid incorrectly or a claim is rejected or denied, providers have 18 consecutive

months from the date of the RA denial to resubmit a claim for processing.

Claims that are denied with no payment can be resubmitted as new claims. Claims that are

denied with no payment include

a. invalid date of service;

b. missing or invalid information such as quantity or billed amount;

c. NDC not on file.

Note: Claims that deny with this EOB message must be verified to ensure that the correct

NDC was listed on the original claim form.

Do not submit a new claim if a partial payment was received. If partial payment is

received on a claim, providers shall edit the claim and resubmit.

N.3 Name and Number Mismatch

To avoid a name and number mismatch, do not use the beneficiary’s middle initial on the

claim form. The beneficiary’s first and last name are sufficient. Enter the beneficiary’s MID

number and name as shown on the MID card or, if the beneficiary’s name has changed,

according to the eligibility file.

N.4 Eligibility Follow-Up

Because a beneficiary’s eligibility status may change from one (1) month to the next if the

financial or household circumstances change, providers shall verify the beneficiary’s

eligibility through a point-of-sale E1 transaction or through the Eligibility Verification

System for proof of eligibility each time a service is rendered. The most common EOBs

received for eligibility denials are these:

EOB Code

Message

011

Recipient not eligible on service date.

120

Recipient MID number missing

143

Recipient MID number not on State eligibility file

191

Recipient MID number does not match patient name

Refer to the following instructions to resolve a claim denied for eligibility.

Check for Errors on the Claim. Compare the beneficiary’s MID card to the information

entered via NCPDP. If the beneficiary’s name or MID number were not entered correctly on

the claim, complete corrections and resubmit. If they are correct, call the DHHS fiscal

contractor to verify eligibility.

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Attachment B: Table of Exemptions to Co-payment and Specific Edit

Override Information

Exemption

NCPDP

Condition

Co-pay

Beneficiary

Residence

PA Code

Submission

Clarification Field

Co-pay Exemption

Family Planning

Drug File

Intermediate Care Facility/Mental

Retardation

Skilled Nursing Facility

Nursing Facility

Pregnancy

4 or

Eligibility

File

Exempt from co-pay only

Health Check < 21 years old

Eligibility

File

CAP

Eligibility

File

Locations with No Automatic

Exemptions

Hospice

Rest Home

Specific Edit Overrides

Edit 907 (Dosage over FDA

guidelines)

Edit 946 (Medicare Edit)

Early Refill Override – Vacation

(in addition to DUR override)

Early Refill Override – Lost

prescription (in addition to DUR

override)

Early Refill Override – Change in

Therapy (in addition to DUR

override)

PDL Overrides – If “Meets PA

Criteria” is documented

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Attachment C: Requesting Prior Authorization for Prescription Drugs

The process to request authorization for the prescription drugs indicated in Subsections 5.1 and

5.2 is as follows:

a. The prescriber contacts the CSC clinical call center online at www.nctracks.nc.gov, by

telephone, or by fax. The prior authorization process is substantially quicker if done through

the web portal NCTracks and could be auto approved.

b. Hours of operation are Monday through Friday, 7:00 a.m. to 11:00 p.m. and Saturday through

Sunday, 7:00 a.m. to 6:00 p.m.

Phone: 1-866-246-8505

Fax: 1-866-246-8507

The prescriber offers information as specified on the prior authorization form for the drug

being requested. Copies of the forms are available online at http://nctracks.nc.gov. All

requests will be answered within 24 hours of receipt.

c. If the request for prior authorization is approved, CSC updates the system. The POS claims

processing system manages the PA information.

d. The billing pharmacy submits the claim for reimbursement. If the prescriber has not obtained

prior authorization, the POS will return a message of either PA REQ. PRESCRIBER CALL

CSC or CLAIM DENIED. PA LIMITS EXCEEDED. If the billing pharmacy receives one of

these messages, they may utilize the NCTracks web portal or CSC may be contacted at 1-

866-246-8505 to verify the status of the prior authorization request. Please notify the

prescriber to call CSC if a prior authorization has not been completed.

e. 72-Hour Emergency Supply

If the prior authorization request is approved, the emergency supply shall be billed through

POS as part of the original fill.

If the prior authorization request is not approved, the system will bypass the prior

authorization requirement if an emergency supply is indicated. A “3” in the Level of Service

field (418-DI) should be used to indicate that the transaction is an emergency fill. The claims

will only allow a 72-hour supply. Co-payments will apply. Edit 383 has also been developed

which will prevent the days supply edit 907 from being overridden for prior authorization

emergency fills. The new edit 383 indicates the following message to the provider: “CANT

USE OVERRIDE WITH A PA EMER FILL”.

f. Retroactive Prior Authorization

A prescriber or long term care pharmacist may request retroactive prior authorization (PA)

for medications in the pharmacy PA program for dates of service up to one year after

dispensing. (Note: Long term care pharmacists may not request prior authorization for Brand

Name Schedule II narcotics or sedative hypnotics.) Retroactive requests may be made by

contacting the CSC clinical call center and will be considered on a case-by-case basis. If no

other PA exists and the beneficiary meets criteria for full approval, a retroactive PA may be

entered to include backdates and forward for full approval period.

Additional information regarding the prior authorization process can be found at

www.nctracks.nc.gov

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Attachment D: Narrow Therapeutic Index Drugs

(As published in the N.C. Register, Volume 23, Issue 17, March 2, 2009)

The following list of NTI drugs is reviewed on an annual basis and submitted to the Office of

Administrative Hearings by the N.C. Board of Pharmacy for publication in the N.C. Register.

• Carbamazepine: all oral dosage forms

• Cyclosporine: all oral dosage forms

• Digoxin: all oral dosage forms

• Ethosuximide

• Levothyroxine sodium tablets

• Lithium (including all salts): all oral dosage forms

• Phenytoin (including all salts): all oral dosage forms

• Procainamide

• Tacrolimus: all oral dosage forms

• Theophylline (including all salts): all oral dosage forms

• Warfarin sodium tablets

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Attachment E: Drug Use Review Program

Overview of the Drug Use Review Program

In accordance with the Social Security Act of 1927 and the Omnibus Budget Reconciliation Act (OBRA)

of 1990, North Carolina established a Drug Use Review (DUR) program for outpatient drugs to assure

that the prescriptions dispensed to beneficiaries are:

a. Appropriate.

b. Medically necessary.

c. Not likely to result in adverse medical results

The program enhances the quality and appropriateness of beneficiary care by educating physicians and

pharmacists on common drug therapy problems to improve prescribing and dispensing practices. The

DUR program consists of the following components.

A. NC Medicaid

NC Medicaid will establish the Drug Use Review Board (DUR). The DUR Board will not have rule

making authority. NC Medicaid can reject the recommendations of the DUR Board by notifying the

Board in writing to allow the Board an opportunity to reconsider its decision. The criteria and

standards for the drug therapy review adopted by NC Medicaid upon recommendation by the DUR

Board shall be available to pharmacists, prescribers, and the general public.

B. DUR Board

The Board is composed of the NC Medicaid Use Review Coordinator, five licensed, actively

practicing physicians, five licensed, actively practicing pharmacists and at least two additional

individuals who have expertise in the clinically appropriate prescribing, dispensing, and monitoring

of covered outpatient drugs, drug use review, evaluation, and intervention or medical quality

assurance. One pharmacist and one physician shall act as co-chair on the Board. Co-chairs are

elected for a one year term by their peers and are eligible for a co-chair position after one year on

the Board. The term of membership shall be 12 months, with the option to renew for two additional

1-year periods.

The North Carolina Association of Pharmacists, the North Carolina Medical Society and the Old

North State Medical Society shall be asked to make nominations for some positions on the Board.

The Director will have the right to reject or accept nominations. The activities of the DUR Board

include establishing standards, retrospective DUR, and ongoing educational interventions. At least

quarterly, the drug claims, in conjunction with other medical claims as needed for clinical purposes,

shall be screened against the standards established by the DUR Board. The State assures it will

prepare an annual report to the Secretary, which incorporates a report from the State DUR Board,

and that the State will adhere to the plans, steps, and procedures as described in OBRA 90.

C. Prospective DUR

C.1 Purpose

The purpose of Prospective Drug Utilization Review (Pro-DUR) is to improve the quality

of care and promote cost savings by preventing adverse drug events before a prescription is

dispensed or used. Pro-DUR is an additional source of information for the pharmacist to use

in making decisions affecting pharmaceutical care.

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A prospective review of drug therapy is conducted at the time a new prescription is filled.

This review involves comprehensive screening of the prescription. Potential drug therapy

problems based upon predetermined standards include, but are not limited to:

1. Therapeutic duplication.

2. Drug–disease contraindications.

3. Drug–drug interactions.

4. Drug interactions with nonprescription or over-the-counter drugs.

5. Drug–disease interactions.

6. Incorrect drug dosage or duration of therapy.

7. Drug allergy interactions.

8. Clinical abuse/misuse.

Pharmacies participating in Medicaid must conduct the Pro-DUR screening. To comply with

these standards, pharmacies must use either a prospective DUR software database or written

standards consistent with the DUR Board policy. Additional Pro-DUR screening is provided

for claims submitted using POS.

The National Council of Prescription Drug Programs (NCPDP) Pro-DUR alerts the

dispensing pharmacist of potential conflicts. This requires a professional service or

result of service coding before payment is made for the prescription. If the

pharmacist determines that the prescription shall be dispensed, the pharmacist must

document their professional judgment by responding to the DUR alert. If more than

one DUR alert is received, it is only necessary for the pharmacist to respond to the

first alert. All of the criteria required to respond to the DUR alert is contained in the

DUR information sent with the alert. A DUR conflict must be documented with

NCPDP DUR result of service and professional service codes in order to receive

payment for a resubmitted prescription.

C.2 Procedure for Responding to DUR Alerts

1. The pharmacist receives a DUR alert message(s) on the computer screen; claim is

rejected for DUR.

2. The pharmacist reviews and resolves identified DUR conflict(s) by contacting the

prescriber, talking with the beneficiary, or using other resources or professional

judgment.

3. If the pharmacist decides not to dispense the prescription, the pharmacist accepts the

reject.

4. The pharmacist does not resubmit the claim and does not receive payment.

5. If the pharmacist decides to resolve and dispense the prescription, the pharmacist

resubmits the correct claim with a DUR reason for service code, DUR professional

service code, and DUR result of service code.

6. If the alert is for an early refill, the pharmacist must include one of the approved reason

codes in the prescription clarification field:

Vacation Supply

To be used if the beneficiary is going out of town and needs

medication refilled early. Note: This will not allow more than

34 days to be indicated in the days supply field. Only one 5-

consecutive day occurrence each 365-day time period will be

allowed for non-controlled medications.

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Lost Prescription

To be used if the beneficiary has lost their medication. Only

one occurrence on one date of service each 365-day time

period will be allowed for non-controlled medications

Therapy Change

To be used if the dosage is changed on a current medication.

Note: Vacation supply and lost prescriptions are not allowed for controlled substances.

7. The pharmacist receives a paid response if DUR documentation was used and the

prescription was filled.

Up to three DUR alerts can be returned for a prescription in the NCPDP standard. If

there are more than three DUR alerts, a DUR overflow message will be returned. If the

pharmacist wants to dispense a prescription that creates more than three alerts and wants

to know the overflow alerts, he/she may call NC Medicaid’s fiscal agent’s Provider

Services unit at 919-851-8888 or 1-800-688-6696.

DUR alert messages contain standard codes and language, but may be displayed in

various ways, depending on the pharmacy software in use.

If an override is not requested for a prescription that is rejected with a DUR reason for

service code, it will be assumed that the prescription was not filled. Return of a Not Filled

result of service code is not required.

Medicaid Pro-DUR is based on a beneficiary’s prescriptions from all prescribers and all

pharmacies utilizing criteria established by the State and by a controllable database

updated by First DataBank.

Submitting an accurate days supply is very important. The day’s supply divided by the

quantity is used to calculate the daily dose for Pro-DUR. Excessively high or low daily

doses result in rejects for High and Low Dose DUR alerts. In addition to high and low

daily dose edits, there are also edits for an early fill before 75 percent of the prescription

is used and 85 percent for narcotic analgesics and benzodiazepine prescriptions and for a

34-day maximum (or 90 days if applicable). The maximum days supply cannot be

overridden.

C.3 Counseling

Pharmacists must offer to discuss those matters with each Medicaid beneficiary presenting a

prescription, which they, in their professional judgment, deem to be significant. This

counseling may include the following:

1. Name and description of the medication.

2. Dosage form, dosage, route of administration, and duration of therapy.

3. Special directions, precautions for preparation, administration, and use by the beneficiary.

4. Common severe side effects, adverse effects or interactions, drug allergies, and

therapeutic contraindications.

5. Techniques for self-monitoring.

6. Proper storage.

7. Refill information.

8. Actions in case of a missed dose

Although the beneficiary may refuse counseling, the offer must be made.

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C.4 Information on Medicaid Beneficiaries

The pharmacies are required to make a reasonable effort to obtain, record, and maintain

information on Medicaid beneficiaries receiving prescriptions to include at least the

following information:

1. beneficiary’s name, age, gender, address, and phone number

2. Individual beneficiary history including a list of medications and devices

3. Pharmacist’s comments

The Division of Medical Assistance will monitor compliance with the requirements for

prospective DUR screening, counseling, and maintenance of beneficiary information as

required by federal law and regulations.

D. Retrospective DUR

D.1 Overview

OBRA 90 requires that NC Medicaid use Medicaid paid claims data to identify patterns of

behavior involving physicians, pharmacists, and individual beneficiaries or patterns

associated with specific drugs or groups of drugs and patterns of fraud and abuse. These

analyses are based on explicit predetermined standards including the screens as described in

the prospective review process. Pharmacists and prescribers’ response to the interventions

undertaken shall be tracked. The DUR Board may establish selection criteria for intensified

review and monitoring of individual pharmacists and prescribers.

OBRA 90 also requires that the DUR program introduce remedial strategies, when necessary,

to improve the quality of care for beneficiaries and to conserve program funds. These

strategies include educational intervention, general or specific information dissemination,

written, oral or electronic reminders, face-to-face discussion or intensified review or

monitoring of practitioners. The DUR Board determines the interventions that will be used

and, after the appropriate amount of time, evaluates the results to determine the effectiveness

on improved drug therapy. The DUR Board may also establish referral processes to the Board

of Pharmacy, the Board of Medical Examiners, the Board of Dental Examiners, other health

care licensing agencies, or NC Medicaid Program Integrity Section for pharmacists or

prescribers. This can occur if pharmacists or prescribers continue to demonstrate patterns of

prescribing or dispensing which put the beneficiary at risk from drug therapy problems even

after repeated warnings through Drug Use Review interventions.

Retrospective DUR (Retro-DUR) is well-suited for identifying aggregate provider-centered

prescribing problems. The integration of prospective DUR online and retrospective DUR has

the potential to promote improved prescribing practices and beneficiary outcomes. Retro-

DUR can detect new relationships and problems among medications and diseases and can be

used ongoing to update the Pro-DUR systems.

Retro-DUR is theoretically designed to accomplish the following:

1. Detect the full range of prescribing problems.

2. Recommend corrective actions for controlling costs and improving beneficiary outcomes.

3. Improve rational prescribing.

4. Identify preventable drug therapy problems.

5. Remind physicians of basic principles and provide up-to-date information needed for

optimal prescribing.

6. Promote proactive pharmacy intervention processes.

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7. Evaluate the effectiveness of interfacing programs

DUR is education of prescribers and pharmacists to improve the quality of care for

beneficiaries while reducing expenditures. Primary tangible cost reductions will be

affected by:

8. Prescribing and dispensing of equally effective, less expensive drugs such as generic

drugs.

9. Decreasing the incidences of unnecessary therapeutic duplications.

10. Averting prescribing problems that may precipitate unnecessary physician visits, ER

visits, and hospitalizations

D.2 Profiling Systems Used by the Retrospective Drug Use Review Program

The DUR Program uses two retrospective profiling methods to characterize drug use patterns

and to help providers assure the quality of care in prescribing medications. These methods are

Provider Profiling and Beneficiary Profiling.

Provider Profiling

The Provider Profiling System uses the NPI number to identify prescribing practices

that deviate from accepted norms. These norms are taken from the published literature

or developed by the DUR Board. provider numbers are used to identify similar

dispensing practices. The Provider Profiling System accommodates criteria within the

following major multi-factor problem types:

1. Overtreatment.

2. Undertreatment.

3. Treatment failure.

4. Drug-to-diagnosis interactions.

5. Drug-to-drug interactions.

6. Iatrogenic effects.

7. Adverse effects.

8. Therapeutic duplication.

9. Drug use without diagnosis.

10. Drug use without laboratory/diagnostic procedures.

11. Empiric prescribing.

12. Specialty-prescriber use issues

Providers who are accepted in the Provider Profiling System receive an educational letter and

a profile showing every drug claim paid using the prescriber’s NPI or State-approved

provider identifier for each beneficiary who received the specific drug therapy. The packet

also includes prescribing information related to the specific drug therapy and response sheets

for providers to indicate the appropriateness and usefulness of the intervention to the

individual’s practice.

Beneficiary Profiling

Beneficiary Profiling is designed to use specific criteria to characterize drug utilization

patterns among beneficiaries. The criteria can identify the following multi-factor problem

types:

1. Overutilization.

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2. Underutilization.

3. Treatment failure.

4. Drug-to-diagnosis interactions.

5. Drug-to-drug interactions.

6. Iatrogenic effects.

7. Adverse reactions.

Profiles, which show the entire medical and drug claims paid for a particular beneficiary, are

produced. DUR staff and the DUR review committee review these profiles and decide if the

providers involved in the beneficiary’s care should receive educational letters explaining the

concern for the appropriateness and necessity for the drug therapy and the possibility of said

therapy resulting in clinically significant adverse effects. The packets sent to prescribers and

pharmacists include the educational letter, beneficiary profile, pertinent information relating

to the drug therapy issue, and response sheets indicating the usefulness of this intervention to

the individual’s practice.

E. Statutory DUR Requirements and Impact on Pharmacies

OBRA required that the drug use review (DUR) program be implemented by January 1, 1993. The

following guidelines are provided to assist retail pharmacies in complying with the DUR program.

E.1 Beneficiary Profiles

Statutory Requirement

Section 1927 of the Act requires the pharmacist to make a reasonable effort to obtain,

record, and maintain for beneficiaries the following information:

a. Name, address, telephone number, age (or birth date), and gender.

b. Individual history where significant, including disease state(s), known allergies, drug

reactions, a comprehensive list of medications, and relevant devices.

c. Pharmacist comments relevant to the beneficiary’s drug therapy

Impact on Pharmacies

a. The pharmacist is responsible for collecting, recording, and maintaining beneficiary

profile information.

b. The pharmacist may rely upon ancillary personnel to collect, record, and obtain

beneficiary profile information, but the pharmacist must review and interpret

beneficiary profile information and clarify confusing or conflicting information.

c. Once beneficiary information is obtained, this information shall be reviewed and

updated by the pharmacist or registrant before each prescription is filled or

delivered, typically at the point-of-sale or point-of-distribution to screen for potential

drug therapy problems listed under the “screening” section below.

d. A “reasonable effort” to obtain profile information will be a good faith effort to obtain

from the beneficiary or representative the foregoing beneficiary’s information.

e. It is expected that the pharmacist shall be guided by professional judgment as to

whether and when individual history information shall be sought from the physician or

other health care providers.

E.2 Screening

Statutory Requirement

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a. Section 1927 (g)(2)(A) of the Social Security Act (the Act) requires Pro-DUR at the

point-of-sale or distribution before each prescription is filled or delivered to

beneficiaries. This review shall include screening for potential drug therapy problems due

to any of the following:

• Therapeutic duplication.

• Drug–disease contraindications.

• Drug interactions.

• Incorrect dosage or duration of drug treatment.

• Drug allergy interactions.

• Clinical abuse/misuse.

b. Prospective DUR screening must use predetermined standards that are based upon

the following compendia:

• American Hospital Formulary Service Drug Information.

• United States Pharmacopoeia Drug Information.

• American Medical Association Drug Evaluations.

• Peer reviewed medical literature which has been critically reviewed by unbiased

independent experts.

Impact on Pharmacies

a. Prospective DUR screening is the responsibility of each participating pharmacy.

b. Medicaid shall supplement DUR on POS claims with alerts for

• Therapeutic duplication

• Drug–disease contraindications

• Drug interactions

• Incorrect dosage

c. Pharmacies may use commercially available DUR database packages to assist with

prospective DUR. Pharmacies are not required to have their databases/software certified

by the State DUR Board.

d. Such data base packages must be able to screen for the therapeutic problems specified in

the statute using explicit standards.

e. It is not expected that these databases will contain beneficiary-specific diagnosis or

allergy information. When, in the pharmacist’s professional judgment, obtaining such

information is essential to the health and well-being of the beneficiary, the pharmacist

should consult the beneficiary or the beneficiary’s health care provider.

f. Pharmacies without computers, or those who choose not to use prospective DUR

database packages, must undertake prospective DUR screening manually. To

perform prospective DUR screening manually, the pharmacist must screen using

predetermined standards, which are based upon the listed compendia.

E.3 Beneficiary Counseling

Statutory Requirement

Section 1927 (g)(2)(A)(ii)(I) of the Act requires that pharmacists offer to discuss with each

Medicaid beneficiary or a caregiver, in person whenever practicable, or by toll free

telephone for long distance calls, matters which in their professional judgment the

pharmacist deems significant. Such counseling is subject to standards for counseling under

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the State Pharmacy Practice Act. Such counseling is to be provided unless refused by the

beneficiary or caregiver.

The statute lists the following subjects for inclusion in counseling:

a. The name and description of the medication

b. The route of administration, dosage form, dosage, and duration of drug therapy

c. Special directions and precautions for preparation, administration, and use by the

beneficiary

d. Common severe side or adverse effects of interactions and therapeutic contraindications

that may be encountered, including how they may be avoided and the actions required if

they occur

e. Techniques for self-monitoring drug therapy

f. Proper storage

g. Prescription refill information

h. Action to be taken in the event of a missed dose

Impact on Pharmacies

a. The pharmacist is responsible for the offer to counsel and for conducting of

counseling when it occurs.

b. The pharmacist may have ancillary personnel make the offer of counseling, but the

pharmacist must personally conduct counseling if the offer is accepted.

c. Pharmacies whose primary beneficiary population are accessible through local measured

or toll free exchange are not required to offer toll free service.

d. Pharmacists shall be required to, at least, document refusal to accept an offer of

counseling. States may impose additional documentation requirements with regard to

counseling. Records resulting from compliance with the DUR requirements shall be

maintained for six years.

e. States may choose to apply counseling requirements to all beneficiaries of prescriptions,

not just Medicaid beneficiaries.

f. Counseling requirements apply to both new and refill prescriptions. However,

professional judgment shall be exercised in determining whether or not to offer

counseling for prescription refills.

g. Alternative forms of beneficiary information (such as written material) may be used to

supplement beneficiary counseling, but cannot be used as a substitute for counseling.

h. The content of counseling is governed solely by the professional judgment of the

pharmacist.

The DUR requirements have been incorporated into the State of North Carolina Pharmacy

Practice Act and are therefore consistent with the requirements of the Board of Pharmacy

except in three areas:

a. The requirements address manual prospective DUR screening in the absence of a

computer DUR database/software package.

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b. A recoupment of the total claim may be imposed on the pharmacy provider for non-

adherence to this statutory requirement.

F. Requirement for Accurate Data on Pharmacy Claims

The DUR program depends on the submission of accurate data on pharmacy claims to minimize

false positives and unnecessary referrals to pharmacies.

The following fields on the pharmacy claims are very important.

F.1 Day Supply

The DUR Program uses this information to compute the dose per day, which is often an

indication of the therapeutic use. For example, a once daily dosing of cimetidine 400 mg

would indicate that the medication is maintenance therapy as opposed to acute therapy. The

information provided in this field is also used as an indicator for determining if the

beneficiary overutilizes or underutilizes medications, as well as identifying potentially

inadequate dosing and excessive dosing.

F.2 Prescriber Identification Number

The correct prescriber identification number is critical in identifying the prescribers and

pharmacists involved in the beneficiary’s drug therapy. A beneficiary with multiple

prescribers often risks medication complications of a different magnitude as opposed to a

beneficiary using one primary provider. One of the functions of DUR is to determine if the

beneficiary’s use of multiple prescribers results in overutilization of services. NC Medicaid

currently uses the NPI to identify the prescribers on the pharmacy claim. It is imperative that

the NPI be entered accurately on the claim.

F.3 Quantity Dispensed

The accuracy of the data entered in this field is critical to the DUR Program and the Drug

Rebate Program. The quantity and days’ supply are used to calculate the dose per day.

G. Point-of-Sale/Online Prospective Drug Use Review

G.1 Introduction

According to the Omnibus Budget Reconciliation Act of 1990 (OBRA), pharmacists must

maintain beneficiary medication records; must screen prescriptions for potential therapeutic

problems before medications are delivered to beneficiaries; and must counsel beneficiaries on

all new or changed prescriptions and on refills when the pharmacist deems it warranted or the

beneficiary requests it.

G.2 OBRA ’90 and Outpatient Drug Use Review

OBRA mandates that each state Medicaid agency establish a comprehensive DUR program.

The law also requires that states establish a DUR Board to assist in reviewing criteria,

establishing standards and assessing their effect upon the quality of care delivered to

beneficiaries. The objective of DUR is to improve the quality of pharmaceutical care by

ensuring that prescriptions are appropriate, medically necessary, and not likely to result in

adverse medical events.

DUR is an administrative process of utilization review and quality assessment. It includes

predetermined criteria to describe appropriate medical care and standards to define the

allowable deviation from the criteria.

The predetermined criteria used in the DUR program must meet the following requirements:

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a. Source materials must be consistent with the peer-reviewed medical literature, American

Hospital Formulary Service Drug Information, United States Pharmacopoeia Drug

Information, and American Medical Association Drug Evaluations.

b. Differences among source materials are resolved by a consensus of physicians and

pharmacists.

c. Criteria are non-proprietary and readily available to providers of services.

d. Criteria are clinically based and scientifically valid.

e. Criteria are tested against claims data prior to adoption.

f. Predetermined standards for prospective and retrospective DUR are compatible.

g. Criteria are subject to ongoing evaluation and modification either as a result of actions by

their developer or by the DUR Board.

G.3 Objectives

The objective of online prospective DUR is to assist pharmacists in screening select drugs for

potential drug therapy problems before the prescription is delivered to the beneficiary.

G.4 Point-of-Sale System Operations

Prior to DUR processing, pharmacy claims are processed by the online adjudication system to

verify beneficiary eligibility, ensure validity (valid dates, NDC numbers, pharmacy and

prescriber provider numbers), determine appropriate payment, and comparison with

previously paid claims to enforce program service limitations and nonpayment for duplicate

claims.

G.5 Prospective Drug Use Review System

DUR processing begins after the claim is certified payable. Incoming drug claims are

compared to the beneficiary’s pharmacy claims history files to detect potential therapeutic

problems. DUR alert messages are returned to the pharmacist for all problems discovered by

this review.

Online prospective DUR provides for review of drug therapy before each prescription is filled

or delivered to the beneficiary and includes screening for potential drug therapy problems due

to any of the following:

a. Drug–drug interactions.

b. Therapeutic duplication.

c. Incorrect drug dosage (low dose or high dose).

d. Overutilization (clinical abuse or misuse).

e. Underutilization (clinical abuse or misuse).

Pro-DUR screens the beneficiary’s profile across multiple pharmacies and prescribers to

improve the quality of care and reduce costs by supplying pharmacists with information

regarding potential adverse drug incidents and overutilization. Medicaid Pro-DUR documents

pharmaceutical care with National Council for Prescription Drug Programs (NCPDP) DUR

professional service and result of service codes required to override DUR alerts. Accurate

days’ supply is essential for Pro-DUR minimum and maximum dosages.

Prospective DUR applies to systemic drug dosage forms as well as non-systemic forms.

Systemic routes of administration include parenteral, buccal, inhalation, translingual,

sublingual, transdermal, oral, rectal, vaginal, mucous membrane and nasal dosage forms.

Non-systemic refers to dental, irrigation, urethral, ophthalmic, otic and topical dosage forms.

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G.6 National Council for Prescription Drug Programs (NCPDP) Standards

Pharmacy claim telecommunication standards dictate the order and content of the fields

relayed to the pharmacist when a DUR alert is generated. A description of these fields

follows.

a. Reason for Service Code

Alerts the pharmacist that the incoming drug claim conflicts with information in the

beneficiary’s history file or with predetermined screening criteria.

b. Clinical Significance/Severity Index Code

Indicates database-assigned significance of the conflict.

0 = Not applicable, 1 = Major, 2 = Moderate, 3 = Minor

c. Other Pharmacy Indicator

Informs the pharmacist of the originating location of the claim with which the incoming

drug claim conflicts.

0 = Not applicable, 1 = Your Pharmacy, 3 = Other Pharmacy

d. Previous Date of Fill

The last recorded date of the active medication in the beneficiary’s history file with

which the incoming drug claim conflicts.

e. Quantity of Previous Fill

Quantity of previously filled prescription with which the incoming drug claim conflicts.

f. Database Indicator

Identifies source of DUR conflict information.

0 = Not applicable, 1 = First DataBank.

g. Other Prescriber Indicator

Identifies the prescriber of the previously filled prescription with which the incoming

drug claim conflicts.

0 = Not applicable, 1 = Same Prescriber, 2 = Other Prescriber

h. Free Text Message

30-character field that transmits decoded information regarding the DUR conflict.

Medicaid will use this for the Drug Name and Strength of the conflicting drug, the health

condition contraindicated in drug–disease conflicts, or the minimum and maximum dose

for utilization conflicts.

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i. NCPDP DUR Codes

Reason for Service Codes

Additional Message Text

DD - Drug–Drug Interaction

“Drug Name with Strength” of

interacting drug

TD - Therapeutic Duplication

“Drug Name with Strength duplicates

this Rx”

ER - Overuse Precaution

“Refill is ____ days early”

LR - Underuse Precaution

“Refill is ____ days late”

DC - Drug–Disease Precaution

“Condition contraindicates use of

prescribed drug”

LD - Low Dose Alert

“Minimum dose, Maximum dose,

dose unit”

HD - High Dose Alert

“Minimum dose, Maximum dose,

dose unit”

NCPDP Codes, continued

Professional Service Codes

M0 - Prescriber Consulted

P0 - Patient Consulted

R0 - Pharmacist Consulted Other Source

00 - No Intervention

Blank Not Specified

Result of Service Codes

1A – Filled, False Positive

1B - Filled Prescription as is

1C - Filled with different dose

1D - Filled with different directions

1E - Filled with different drug

1F - Filled with different quantity

1G - Filled with prescriber approval

2A - Prescription not filled

2B - Prescription not filled – directions clarified

j. Approved Prescription Clarification Codes for Early Refill

Vacation Supply

To be used if the beneficiary is going out of town

and needs medication refilled early. Only one 5-

consecutive day occurrence each 365-day time period

will be allowed for non-controlled medications.

Lost Prescription

To be used if the beneficiary has lost their

medication. Only one occurrence on one date of

service each 365-day time period will be allowed for

non-controlled medications.

Therapy Change

To be used if the dosage is changed on a current

medication.

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Note: Vacation supply and lost prescription codes are not allowed on controlled

substances.

G.7 DUR Alert Message Examples

Proprietary pharmacy software for prescription processing systems may display DUR alerts

in different formats. The following examples are provided to acquaint the reader with the

standard content of DUR messages. These may differ from the message actually displayed on

the pharmacist’s computer screen.

a. On July 6, 1996, the pharmacist attempts to dispense an aspirin-containing product to a

beneficiary currently receiving warfarin prescribed by the same physician and filled at

another pharmacy. The messages related to the alert are:

Reason for Service Code:

DD - DRUG INTERACTION

SEVERITY:

1 = Major

OTHER PHARMACY INDICATOR:

3 = Other Pharmacy

PREVIOUS FILL DATE:

19960630 (June 30, 1996)

QUANTITY OF PREVIOUS FILL:

DATABASE INDICATOR:

1 = First DataBank

OTHER PRESCRIBER INDICATOR:

1 = Same Prescriber

MESSAGE:

Coumadin

b. On July 19, the pharmacist attempts to dispense a refill for which the previous

prescription has greater than 25 percent of days supply remaining:

Reason for Service Code:

ER - OVERUTILIZATON

OTHER PHARMACY INDICATOR:

1 = Same Pharmacy

PREVIOUS FILL DATE:

19960628 (June 28, 1996)

QUANTITY OF PREVIOUS FILL:

OTHER PRESCRIBER INDICATOR:

1 = Same Prescriber

c. The pharmacist attempts to dispense a refill of levothyroxine on June 15, a date equal to

greater than 125 percent of previous prescription’s days supply:

Reason for Service Code:

LR - UNDERUTILIZATION

OTHER PHARMACY INDICATOR:

1 = Same Pharmacy

PREVIOUS FILL DATE:

19960501 (May 1, 1996)

QUANTITY OF PREVIOUS FILL:

OTHER PRESCRIBER INDICATOR:

1 = Same Prescriber

d. The pharmacist attempts to dispense acetaminophen w/codeine, three tablets every 4

hours (dose exceeds usual adult daily maximum):

Reason for Service Code:

HD - HIGH DOSE

DATABASE INDICATOR:

1 = First DataBank

e. The pharmacist attempts to dispense propranolol 20mg, 1 daily (dose is less than usual

adult daily minimum):

Reason for Service Code:

LD - LOW DOSE

DATABASE INDICATOR:

1 = First DataBank

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G.8 DUR Alert Priority

All DUR alerts for a prescription will be relayed to the pharmacist on line. However, only 3

DUR override codes can be entered. If there are more than 3 alerts, override the first 3 DURs

listed.

Multiple alerts on a prescription are prioritized according to the following hierarchy (subject

to DUR Board approval):

a. Overutilization.

b. Drug–Drug Interactions.

c. Therapeutic Duplication.

d. Incorrect Dose.

e. Drug–Disease Contraindications.

f. Underutilization.

G.9 DUR Alert Definitions

Overutilization

Overutilization is use of a drug in quantities or for durations which put the beneficiary at risk

of an undesirable effect due to a course of drug therapy. The Overutilization screening system

warns pharmacists when beneficiaries attempt to obtain early refills. The pharmacist must

indicate one of the approved reason codes in order for this alert to be overridden. The

approved codes are as follows:

03 – Vacation supply (Only one 5-consecutive day occurrence each 365-day time period will be

allowed for non-controlled medications.

04 – Lost prescription (Only one occurrence on one date of service each 365-day time period

will be allowed for non-controlled medications.)

05 – Therapy dosage change

Drug–Drug Interactions

Drug–drug interactions create the potential for an adverse medical event when beneficiaries

receive simultaneous prescriptions with conflicting pharmacology. The Drug–Drug

Interaction screening system warns pharmacists when a beneficiary receives drugs, which

result in a different pharmacologic response from that which is expected when the drugs are

given separately. This screen accounts for serum half-life when editing for active medications

in the beneficiary’s medication history. The pharmacist is notified when severity level 1

interactions occur, i.e., those that are the most significant, usually requiring action to reduce

risk of serious injury.

Therapeutic Duplication

Therapeutic duplication is the prescribing of two or more drugs from the same therapeutic

class such that the combined daily dose increases the risk of toxicity or incurs additional

program costs without additional therapeutic benefit. The Therapeutic Duplication screening

system warns pharmacists when a claim is submitted for a systemically absorbed drug that

shares the same therapeutic class or a non-systemic drug with identical route of

administration and same therapeutic class as another drug currently in the beneficiary’s active

medication history.

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Incorrect Dosage

An incorrect dosage is one which lies outside the adult daily dosage range necessary to

achieve therapeutic benefit. The Incorrect Dosage screening system alerts pharmacists when

doses fall outside the normal adult range for common indications for the drug. Beneficiary-

specific information is not required since dose ranges are predicated on a 70 kg adult male

with normal hepatic and renal function. Geriatric doses are not included in the incorrect

dosage alert.

Drug–Disease Contraindication

Drug–disease contraindications create the potential for an adverse medical event when

beneficiaries receive prescriptions, which are contraindicated in the beneficiary’s disease

state. A drug–disease contraindication occurs when certain drugs are prescribed for

beneficiaries with specific medical conditions that may be aggravated by the new drug

prescribed. Diseases are inferred from the indication of drugs on the beneficiary’s profile.

Underutilization

Underutilization is use of a drug in insufficient quantity to achieve a desired therapeutic

effect. The Underutilization screening system warns pharmacists when subtherapeutic

patterns of prescription use are detected by a beneficiary’s failure to renew prescriptions for

maintenance drugs on a timely basis. This alert is for informational purposes only.

G.10 Online DUR Criteria

Drug–Drug Interactions (DD)

Processing: The drug interaction edit screens each new claim against all active medications in

the beneficiary’s pharmacy claims history file. To account for residual drug in the body, a

factor of 15 percent is added to each active claims’ days supply. Severity level 1, major

significance, interaction alerts are sent to the pharmacist.

Alert: DD - Drug–Drug Interaction

Message: (Label name)

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) shall

maintain ingredient-specific beneficiary profiles. Prior to dispensing any medication, the

prescription must be checked against the existing medication profile to identify interacting

drugs.

Therapeutic Duplication (TD)

Processing: The Therapeutic Duplication edit screens incoming prescriptions against all

active drugs in a beneficiary’s claims history. Duplication exists when a beneficiary receives

two systemically absorbed drugs or two non-systemic drugs by the same route of

administration that share the same therapeutic class.

Alert: TD - Therapeutic Duplication

Message: (Label name)

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) shall

maintain ingredient-specific beneficiary profiles. Prior to dispensing any medication, the

prescription must be checked against the existing drug profile to identify products in the same

therapeutic categories.

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Incorrect Dosage (LD/HD)

Processing: The Incorrect Drug Dosage screen creates warnings when the prescribed dose is

outside the usual adult range for common indications for that drug. Pediatric doses are

checked using ten levels of age/weight minimum and maximum doses for beneficiaries less

than 18 years old.

Alerts: HD - High Dose

LD - Low Dose

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) shall screen

prescriptions against the usual adult daily dose for a 70 kg adult male with normal hepatic

and renal function.

Drug–Disease Contraindication (DC)

Processing: The Drug–Disease Contraindication edit screens each new claim against all

medications in the beneficiary’s pharmacy claims history file. A Drug–Disease

Contraindication occurs when certain drugs are prescribed for beneficiaries with specific

medical conditions that may be aggravated by the new drug prescribed. Diseases are inferred

from the indication of drugs on the beneficiary’s profile.

Alert: DC - Drug–Disease Contraindication

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) shall

maintain ingredient-specific beneficiary profiles. Prior to dispensing any medication, the

prescription must be checked against the existing medication profile to identify any drug–

disease contraindications.

Overutilization (ER)

Processing: The Overutilization screen warns the pharmacist of early fills and/or potential

abuse situations. This screen identifies prescriptions submitted for another supply of the same

drug when the beneficiary’s medication history shows greater than 25 percent of the

previously dispensed days supply remains or 9 days early if the previous claims days supply

is greater than 34 days. For benzodiazepines and opioid analgesics, the system will alert when

the beneficiary’s medication history indicates greater than 15 percent of the previously

dispensed days supply remains.

The process to override an early fill alert is to respond to the

DUR alert and to indicate one of the approved reason codes in the Rx Clarification Field (also

referred to as the Submission Clarification Code). The approved codes are as follows:

03 – Vacation supply (Only one 5-consecutive day occurrence each 365-day time period will be

allowed for non-controlled medications.

04 – Lost prescription (Only one occurrence on one date of service each 365-day time period

will be allowed for non-controlled medications.)

05 – Therapy dosage change

Alert: ER - Overuse Precaution

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) must

maintain accurate prescription dates of service. Prior to dispensing any medication,

prescriptions must be checked against the existing drug profile to identify products with

identical route of administration and active ingredient(s). If previous prescriptions for

identical products have at least 25 percent of the days supply remaining (15 percent for

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benzodiazepines and opioid analgesics) or 9 days early if the previous claims days supply is

greater than 34 days, early refill is present.

Underutilization (LR)

Processing: The Underutilization screen creates warnings when subtherapeutic patterns of

prescription use are detected. Alerts are generated when beneficiaries fail to renew

prescriptions for maintenance drugs on a timely basis. Pharmacists are notified when the

renewal request interval is greater than 125 percent of the previous days supply. This alert is

sent for informational purposes only. No override is needed to fill the prescription.

Alert: LR - Underuse Precaution

Manual DUR Protocol: Pharmacists using explicit written criteria (manual DUR) must

maintain accurate prescription dates of service. Prior to dispensing any medication,

prescriptions must be checked against the existing drug profile to identify products with

identical route of administration and active ingredient(s). If previous prescriptions for

identical products exceed 125 percent of the days supply, late refill is present.

G.11 Procedure for Responding to DUR Alerts

a. Pharmacist receives DUR alert message(s) on computer screen; claim is rejected for DUR

b. Pharmacist reviews and resolves identified DUR conflict(s) by contacting the prescriber,

talking with the beneficiary, or using other resources or professional judgment

c. If the pharmacist decides not to dispense the prescription, the pharmacist accepts the

reject. Pharmacist does not resubmit claim and does not receive payment.

d. If the pharmacist decides to resolve and dispense the prescription, the pharmacist

resubmits the correct claim with a DUR reason for service code, DUR professional

service code, and DUR result of service code. (See additional information needed to

override an early fill alert).

e. Pharmacist receives a paid response if the prescription was filled with DUR

documentation.

DUR alert messages contain standardized codes and language, but may be displayed in

various ways, depending on the pharmacy software in use. The content of the DUR Alert

message includes:

a. Reason for Service Code

This two-character alphabetic code identifies the conflict between the submitted drug

claim and information in the beneficiary’s history file or predetermined screening criteria.

b. Clinical Significance/Severity Index Code

This numeric value indicates the database-assigned significance of the conflict.

0 = Not applicable, 1 = Major, 2 = Moderate, 3 = Minor

c. Other Pharmacy Indicator

This numeric value identifies the originating location of the history claim with which the

submitted drug claim conflicts.

0 = Not applicable, 1 = Your Pharmacy, 3 = Other Pharmacy

d. Previous Date of Fill

This value identifies the last recorded date of service for the active medication in the

beneficiary’s history file with which the submitted drug claim conflicts.

e. Quantity of Previous Fill

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This value identifies the quantity of the prescription in the beneficiary’s history file with

which the submitted drug claim conflicts.

f. Database Indicator

This value identifies the source of DUR screening criteria.

0 = Not applicable, 1 = First DataBank, 2 = Medi-Span, 3 = Red Book,

4 = Processor Developed, 5 = Other

g. Other Prescriber Indicator

This numeric value identifies the prescriber of the history claim with which the submitted

drug claim conflicts.

0 = Not applicable, 1 = Same Prescriber, 2 = Other Prescriber

h. Free Text Message

This 30-character field provides additional information regarding the DUR conflict.

Medicaid will use the Drug Name and Strength of the conflicting drug, the health

condition contraindicated in drug–disease conflicts, or the minimum and maximum dose

for utilization conflicts.

H. Point-of-Sale/Pro-DUR Transaction Flows

Flow 1

POS No Pro-DUR Screening

Flow 2

POS No Pro-DUR Alerts

Flow 3

POS/Pro-DUR Alerts Found - Provider Overrides

Flow 4 POS/Pro-DUR Alerts Found - Provider Cancels

Flow 5

POS/Pro-DUR Alerts Found - Provider Cancels and Resubmits

Flow 5a

POS/Pro-DUR Alerts Found - Provider Changes Rx and Resubmits

Flow 6

POS/Pro-DUR Alerts Found - No Provider Response

Flow 7

POS Provider Sends Reason for Service/Professional Service/Result of Service Codes on a

New Claim; DUR Reason for Service Codes DD, TD, ER

Flow 7a

POS Provider Sends Reason for Service/Professional Service/Result of Service Codes on a

New Claim; DUR Reason for Service Codes HD, LD, LR

Flow 8

POS Reversal Transaction - Transaction is Accepted

Flow 9

POS Reversal Transaction - Edit Errors are Found

Flow 10

POS Reversal Transaction - Original Claim Not Found on File

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POS/Pro-DUR Transaction Flow

No Pro-DUR Screening

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds edit errors. Pro-DUR screening is bypassed.

3. Processor sends “rejected” response (response status = “R”).

4. Pharmacist receives reject response; there will be no Medical Assistance reimbursement

for providing service.

POS/Pro-DUR Transaction Flow

No Pro-DUR Alerts

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

No Pro-DUR screens fail.

3. Processor sends “payable” response (response status = “P”).

4. Pharmacist receives “payable” response.

POS/Pro-DUR Transaction Flow

Pro-DUR Alerts Found—Provider Overrides

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

4. Pharmacist receives “rejected” response. Resolves DUR conflict(s); selects one reason

for service code; resubmits claim with 6-character reason for service/professional

service/result of service code indicating override.

5. Processor POS receives claim with reason for service/professional service/result of

service code; POS matches claim to suspended claim; Pro-DUR screens overridden.

6. Processor sends “payable” response (response status = “P”).

7. Pharmacist receives “payable” response.

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POS/Pro-DUR Transaction Flow

Pro-DUR Alerts Found—Provider Cancels

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

4. Pharmacist receives “rejected” response. Realizes there will be no Medical Assistance

reimbursement for providing service. Selects one reason for service code. Sends

informational transaction with 6-character reason for service/professional service/result

of service code indicating cancellation.

5. Processor POS receives transaction with reason for service/professional service/result of

service code; POS matches claim to suspended claim.

6. Processor sends acknowledgment of cancellation (response status = “P”; payable amount

= $0).

7. Pharmacist receives acknowledgment.

POS/Pro-DUR Transaction Flow

Pro-DUR Alerts Found—

Provider Cancels & Resubmits

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

4. Pharmacist receives “rejected” response. Changes claim’s drug, quantity, and/or days

supply. Cancels original claim. Sends informational transaction with 6-character reason

for service/professional service/result of service code indicating cancel.

5. Processor POS receives claim with reason for service/professional service/result of

service code; POS matches claim to suspended claim.

6. Processor sends acknowledgment of cancellation (response status = “P”; payable amount

= $0).

7. Pharmacist receives acknowledgment.

8. Pharmacist submits new claim with changed drug, quantity, and/or days supply.

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POS/Pro-DUR Transaction Flow

Pro-DUR Alerts Found—

Provider Changes Rx & Resubmits

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

4. Pharmacist receives “rejected” response. Changes claim’s drug, quantity, and/or days

supply. Resubmits with 6-character reason for service/professional service/result of

service code indicating override.

5. Processor POS receives claim with reason for service/professional service/result of

service code; POS matches claim to suspended claim. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

6. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

7. Pharmacist receives “rejected” response. Resolves DUR conflict(s). Selects one reason

for service code. Resubmits claim with 6-character reason for service/professional

service/result of service code indicating override.

8. Processor POS receives and matches claim to suspended claim. Pro-DUR screens

overridden.

9. Processor sends “payable” response (response status = “P”).

10. Pharmacist receives “payable” response.

7. Pharmacist receives “rejected” response. Sends informational transaction with 6-

character reason for service/professional service/result of service code indicating cancel.

8. Processor POS receives and matches to suspended claim.

9. Processor sends acknowledgment of cancellation (response status = “P”; payable amount

= $0).

10. Pharmacist receives acknowledgment.

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POS/Pro-DUR Transaction Flow

Pro-DUR Alerts Found—No Provider Response

1. Pharmacist submits a claim.

2. Processor POS receives claim and finds no edit errors. Pro-DUR screening is performed.

One or more Pro-DUR screens fail. POS suspends claim. Provider must respond to

override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) (response status =

“R”).

4. Pharmacist receives “rejected” response but supplies no return response.

5. Processor Claim remains suspended and is subsequently cancelled by the system.

POS/Pro-DUR Transaction Flow

Provider Sends C/I/O Codes on a New Claim

DUR Reason for Service Codes DD, TD, ER

1. Pharmacist submits a claim with reason for service/professional service/result of service

codes for DUR reason for service codes DD, TD, ER.

2. Processor POS receives claim with reason for service/professional service/result of

service codes. POS does not find a suspended claim that matches the new claim. The

reason for service/professional service/result of service codes are ignored and Pro-DUR

screening is performed. Claim is treated as a first-time submission (any of the other flows

may occur).

POS/Pro-DUR Transaction Flow

Provider Sends C/I/O Codes on a New Claim

DUR Reason for Service Codes HD, LD, LR

1. Pharmacist submits a claim with reason for service/professional service/result of service

codes for DUR reason for service codes HD, LD, LR.

2. Processor POS receives claim with reason for service/professional service/result of

service codes. POS does not find a suspended claim that matches the new claim. The

reason for service/professional service/result of service codes are recorded and Pro-DUR

screening is performed. One or more Pro-DUR screens fail. POS suspends the claim. The

provider must respond to override the alert or cancel the claim.

3. Processor sends “rejected” response with reason for service code (s) except those on

original claim (response status = “R”).

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4. Pharmacist receives “rejected” response. Resolves DUR conflict(s); selects one reason

for service code; resubmits claim with 6-character reason for service/professional

service/result of service code indicating override.

5. Processor POS receives claim with reason for service/professional service/result of

service code; matches claim to suspended claim; Pro-DUR screens overridden.

4. Pharmacist receives “rejected” response. Sends informational transaction with 6-

character reason for service/professional service/result of service code indicating cancel.

5. Processor POS receives and matches claim to suspended claim; sends acknowledgment

of cancellation (response status = “P”; payable amount =$0).

6. Pharmacist receives acknowledgment.

POS/Pro-DUR Transaction Flow

Accepted Reversal Transaction

1. Pharmacist submits a reversal.

2. Processor POS receives reversal; finds no edit errors; finds original claim in “paid”

status; reverses claim; sends acknowledgment of reversal (response status = “A”).

3. Pharmacist receives acknowledgment.

POS/Pro-DUR Transaction Flow

Rejected Reversal Transaction

1. Pharmacist submits a reversal.

2. Processor POS receives reversal; finds edit errors; sends “rejected” response (response

status = “R”).

3. Pharmacist receives “rejected” response.

POS/Pro-DUR Transaction Flow

Reversal Transaction—Original Claim Not on File

1. Pharmacist submits a reversal.

2. Processor POS receives reversal; finds no edit errors; does not find original claim; sends

“rejected” response (response status = “R”).

3. Pharmacist receives “rejected” response.

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I. Drug–Drug Interaction Example

Amiodarone and Warfarin interact with a Severity Level of 1. The beneficiary’s claim history

shows that 30 days supply of Amiodarone 200 mg was filled on August 1, 2004. The incoming

claim, on date of service September 3, 2004, is for 5 mg of Warfarin.

Processing

Evaluate Beneficiary History

Each of the beneficiary’s history claims is evaluated to determine the date on which the drug

is no longer active in the beneficiary’s system. The formula to determine the active end date

is as follows:

1. Multiply the Days Supply by the Days Supply Percentage for Drug–Drug (usually

115%)

2. Add the number of days to the Date of Service

Using this formula, Drug 1 is active until 09/05/2004 (30 x 1.15 = 35 Days; 08/01/2004 plus

35 days = 09/05/2004). The drug is considered active if the calculated end date is greater than

the incoming drug’s date of service.

Determine Drug–Drug Interaction

The Drug–Drug precautions are searched using the active history drug as Drug 1 and the

incoming claim drug as Drug 2. If a match is found, an alert is issued.

Results

This drug combination will cause a severity level 1 Drug–Drug alert (DD) to be returned.

J. Over Utilization/Early Refill Example

The beneficiary’s claim history shows that 30 days supply of Propranolol 40 mg tablet was filled

on August 1, 2004. Incoming claim information is for Propranolol 40 mg tablet on August 22,

2004.

Processing

Evaluate Beneficiary History

The beneficiary’s history is searched for a drug matching the incoming claim. If a match is

found, the following formula is applied to the history claim to determine if the refill is too

soon:

1. Multiply the Days Supply by the Days Supply Percentage for Over Utilization

(usually 75% and 85 % for benzodiazepine and opioid analgesic prescriptions)

2. Add the number of days to the Date of Service

For this example, the calculated date is 08/24/2004. (30 x 0.75 = 23; 08/01/2004 plus 23 days

= 08/24/2004). The refill is considered early if the calculated date is greater than the

incoming claim’s date of service.

Results

An Over Utilization alert (ER) will be returned since the calculated date, 08/24/2004, is

greater than the date of service, 08/22/2004.

K. Under Utilization/Late Refill Example

Theophylline 300 mg tablet is prescribed as a maintenance drug. The beneficiary’s claim history

shows 30 days supply filled on July 1, 2004. Incoming claim information is for date of service

August 15, 2004.

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Processing

Note: Processing for this screening is for maintenance drugs only.

Evaluate Beneficiary History

The beneficiary’s history is searched for a drug matching the incoming claim. If a match is

found, the following formula is applied to the history claim to determine if the refill is late:

1. Multiply the Days Supply by the Days Supply Percentage for Under Utilization

(usually 125%)

2. Add the number of days to the Date of Service

For this example, the calculated date is 08/08/2004 (30 x 1.25 = 38 Days; 07/01/2004 plus 38

days = 08/08/2004). The refill is considered late if calculated date is less than the incoming

claim’s date of service.

Results

An Under Utilization alert (LR) will be returned, since the calculated date, 08/08/2004, is less

than the date of service, 08/15/2004.

L. Low Dose/High Dose Example

Low Dose/High Dose Precautions

Drug

Minimum Dose

Maximum Dose

Cimetidine 400 mg tablet

1 tablet

6 tablets

Captopril 50 mg tablet

1 tablet

9 tablets

Incoming Claim Information

Drug

Quantity

Days Supply

1. Cimetidine 400 mg tablet

30 tablets

2. Captopril 50 mg tablet

360 tablets

Processing

The Dose is calculated by dividing the Quantity by Days Supply. The Dose is then compared

to the Low Dose/High Dose criteria.

A low dose alert will be returned if the calculated dose is less than the minimum dose for the

drug.

A high dose alert will be returned if the calculated dose is greater than the maximum dose

for the drug.

For claim 1, the dose is 0.5 tablet per day (30 divided by 60).

For claim 2, the dose is 12 tablets per day (360 divided by 30).

Results

Claim 1 will return a low dose alert (LD) since 0.5 is less than the minimum dose of 1 tablet

per day.

Claim 2 will return a high dose alert (HD) since 12 is greater than the maximum dose of 9

tablets per day.

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Outpatient Pharmacy Clinical Coverage Policy No: 9

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M. Therapeutic Duplication Example

Drug

Name

Therapeutic Class

Diazepam 10 mg oral tablet

H2F

Triazolam 0.125 mg oral tablet

H2F

Triamcinolone topical cream

P5C

Flunisolide topical ointment

P5C

Beneficiary Claim History

Drug

Date of Service

Days Supply

Drug 1: Diazepam 10 mg tablet

08/01/2004

Drug 3: Triamcinolone topical cream

08/15/2004

Incoming Claim Information

Drug

Date of Service

Drug 2: Triazolam 0.125 mg tablet

08/15/2004

Drug 4: Flunisolide topical ointment

08/18/2004

Processing

Evaluate Beneficiary History

The beneficiary’s history is searched for a drug in the same therapeutic class. If a match is found,

the following formula is applied to determine if the prescription is still active:

1. Calculate end Rx date by adding Days Supply to Date of Service.

For this example, the calculated end Rx date for Drug 1 is 08/31/2004 (08/01/2004 + 30 days =

08/31/2004). The calculated date for Drug 3 is 08/20/2004 (08/15/2004 + 5 days =

08/20/2004).

If incoming claim’s date of service is less than end Rx date, an alert is returned.

Determine Therapeutic Duplication

Two drugs are considered therapeutic duplicates under the following conditions:

1. The drugs belong to the same Therapeutic Class AND both drugs are systemic.

2. The drugs belong to the same Therapeutic Class, the incoming drug is not systemic, AND

both drugs have the same route of administration.

Results

For Drugs 1 and 2, the history drug and the incoming claim drug belong to the same Therapeutic

Class, both drugs are systemic and the incoming claim’s date of service is less than the

calculated end Rx date; therefore, a Therapeutic Duplication alert (TD) is returned.

For Drugs 3 and 4, the history drug and the incoming claim drug belong to the same Therapeutic

Class, the incoming claim drug is NOT systemic but matches route of administration, and the

incoming claim’s date of service is less than the calculated end Rx date; therefore, a

Therapeutic Duplication alert (TD) is returned.

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Attachment F: Summary of Billing Requirements

a. The subscriber ID is the beneficiary’s MID number consisting of nine (9) digits plus one (1) alpha

character in the tenth position.

b. The prescriber’s NPI number is the number used to identify the prescriber of the prescription.

c. The maximum days supply for all drugs, except birth control medications, prepackaged hormone

replacement therapies, and maintenance medications is a 34-day supply unless the medication meets

the criteria described in Subsection 5.4, Dispensing and Maximum Days Supply.

d. The dispensing fee is deducted for additional prescriptions dispensed within the same month (except

for clotting factors).

e. Compounds – Refer to Attachment A, Section J, Compounded Drugs.

f. Nursing Home providers may combine all of the prescriptions dispensed during a month as one

prescription and submit it at the end of month.

g. The Amount Billed should be the lower of usual and customary charge or the calculated Medicaid

price. The calculated Medicaid price is the MAC price or NCAAC+ the dispensing fee. Federal or

State MAC prices or NADAC generic prices are used unless they are overridden with auditable

required documentation.

340B Provision

The following 340B guidelines apply to all of the following entities:

a. Covered Entities billing as Outpatient Pharmacy Point-of sale;

b. Contract Pharmacies;

c. Fee-for-service;

d. Managed Care;

e. Out-of-state Pharmacy Point-of -sale Providers; and

f. Any other entity billing Pharmacy Point-of -sale for 340B drugs.

340B providers must be listed on the HRSA website (http://www.hrsa.gov/opa/). 340B providers

must submit the actual purchased drug price in the usual and customary charge field. Providers who

maintain two separate inventories—one for the 340B beneficiaries and a purchased inventory for non-

340B beneficiaries—may not dispense a 340B-purchased drug and bill Medicaid the calculated

Medicaid price for non-340B beneficiaries. For hemophilia drugs, 340B providers may submit the

state upper limit established for a 340B purchased hemophilia drug 340B providers must submit POS

claims with an ‘8’ in the basis of cost determination field (NCPDP D.0 field 423-DN) and a ‘20’ in

the submission clarification code field (NCPDP D.0 field 420-DK) to indicate they are dispensing a

340B product. The state shall extract appropriate claims from rebate invoicing and collection. This

will eliminate duplicate discounts as the claims will be pulled from rebate collections.

The following 340B guidelines apply to the following entities:

a. A Provider billing drugs through the Physicians’ Drug Program; and

b. A 340B provider listed on the HRSA website (http://www.hrsa.gov/opa/).

For 340-B drugs, the provider(s) shall bill the cost that is reflective of their acquisition cost. Provider

shall indicate that a drug was purchased under a 340-B purchasing agreement by appending the “UD”

modifier on the drug detail.

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The state shall extract appropriate claims from rebate invoicing and collection. This shall eliminate

duplicate discounts as the claims are pulled from rebate collections. Providers are responsible for

billing 340B drugs with these guidelines. Providers may be responsible for any adverse financial

impact to the State for erroneously billed claims.

The following 340B guidelines apply to all of the following entities:

a. Outpatient Hospitals; and

b. 340B provider listed on the HRSA website (http://www.hrsa.gov/opa/

Outpatient Hospitals are reimbursed based on a ratio of cost to charge. Outpatient Hospitals shall

submit Usual and Customary charge (rather than the actual acquisition cost) for 340B medications on

the UB-04 and 837i. 340B status shall indicated on the UB-04 and 837i using the UD modifier for

outpatient hospital institutional medical drug claims (O claims).

The state shall extract appropriate claims from rebate invoicing and collection. This eliminates

duplicate discounts as the claims are pulled from rebate collections. Providers may be responsible for

any adverse financial impact to the State for erroneously billed claims.

h. NADAC generic rate and MAC overrides are allowed:

1. if the prescriber hand writes brand “Medically Necessary” on the face of the prescription.

NADAC generic rate and MAC overrides are billed with DAW 1.

2. if the prescriber has indicated the brand drug is necessary by writing “medically necessary” on

the prescription order for a brand NTI drug. NADAC generic rate and MAC overrides are billed

with DAW 7

3. when a multi-source Brand generic equivalent is not available in the market place. NADAC

generic rate and MAC overrides are billed with DAW 8.

4. When the NC Medicaid preferred Brand was dispensed when the generic equivalent was non-

preferred. NADAC generic rate and MAC overrides are billed with DAW 9.

i. Other Payor amounts must be included when applicable for Medicaid, as the payor of last resort, to

pay the calculated Medicaid price minus the co-pay and the Other Payor Amount field.

j. Exclusions from payment:

1. OTCs (except insulin and selected OTC products per Clinical Coverage Policy 9A, Over-The-

Counter Products at https://medicaid.ncdhhs.gov/

)

2. devices

3. diaphragms

4. DESI drugs

5. compounds equivalent to DESI drugs

6. fertility medications

7. medications for cosmetic purposes

8. medications for non-FDA approved uses

9. drugs from manufacturers who have not signed Drug Rebate agreements

10. inpatient hospital prescriptions

11. drugs administered in the prescriber’s offices, which should be submitted by the prescriber using

J codes

12. routine immunizations

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13. durable medical equipment

14. prescriptions dispensed by providers who are not enrolled with Medicaid

15. IV fluids (Dextrose 500 ml or greater) and irrigation fluids used by Medicaid beneficiaries in an

inpatient facility are not billed through the Medicaid Outpatient Pharmacy Program; they are

billed by the facility as ancillary services.

16. Erectile dysfunction drugs

17. Weight loss and weight gain drugs

18. Drug samples

19. Drugs obtained from any patient assistance program

20. Drugs used for the symptomatic relief of cough and colds that contain expectorants or cough

suppressants

21. Legend vitamins and mineral products (except prenatal vitamins, fluoride, and calcitriol

(vitamin-D) when the calcitriol is being used for predialysis beneficiaries, dialysis beneficiaries,

and hypoparathyroidism beneficiaries.

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Outpatient Pharmacy Clinical Coverage Policy No: 9

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Attachment G: Defining the Drug Unit

1. Tablets, capsules, and suppositories: The unit is “one” or “each.” For example, if 10 tablets

are dispensed, the quantity is 10.

2. Ointments, creams, balms, and bulk powders: The unit is “gram.” For example, if a 15 gram

tube of ointment is dispensed, the quantity is 15.

3. Liquids, suspensions, solutions, large volume IV solutions, and irrigations: The unit is “ml.”

For example, if a 4 ounce bottle of liquid is dispensed, the quantity is 120.

4. Injectable items:

a. If the product is in solution, the unit is “ml” and the quantity is the volume size. For

example, if a 100 ml bag of Sodium Chloride is dispensed, the quantity is 100.

b. If the product is a partial-fill, the unit is “ml” and the quantity is the amount of fill volume

containing the actual drug. For example, if Dextrose 5% 250 ml in a 500 ml bottle is

dispensed, the quantity is 250.

c. If the product is a powder filled vial for reconstitution before injection, the unit is “one”

or “each.” For example, if a vial of injectable Ampicillin has to be reconstituted into

solution by the pharmacist, the quantity is 1. Note that when a product comes with a

separate vial or ampule or diluent it is still treated as a powder for reconstitution under this

policy.

5. Packets: The unit is “one” or “each” regardless of whether the packet is labeled with the weight

or not. For example, if 10 packets of Questran are dispensed, the quantity is 10.

6. Disposable enemas: If the individual enema is labeled by volume, the unit is “ml” and the

quantity dispensed is the number of milliliters in the enema container. If the individual enema is

not labeled by volume, the unit is “one” or “each” and the quantity is 1 for each enema.

7. Aerosols, jellies, and gels: If the product is labeled in weight, the unit is “gram.” For example,

if an aerosol is dispensed as 16.8 grams, the quantity is 16.8. Similarly, if the product is labeled

in volume, the unit is “ml.” If the product is not labeled by weight or volume, the unit is “one”

or “each”.

8. Reconstituted non-injectable liquid dosage forms: For antibiotic oral suspensions, eye drops,

and other non-injectable forms that require reconstitution prior to dispensing and that are labeled

by volume, the unit is “ml.” For example, if a 150 ml Amoxicillin Oral Suspension is dispensed,

the quantity is 150.

9. Granulex Spray: The unit is “ml.” For example, if a 4 ounce can is dispensed, the quantity is

120.

10. Combination packages: For drug products that contain more than one drug in separate dosage

forms and that are packaged and dispensed in an “unbreakable” container, the unit is “one” or

“each.”

11. Metric package sizes: The quantity or total number of units is always the actual metric package

size as supplied by the manufacturer/distributor. If the actual metric package is unavailable, the

following conversions are used:

1 fluid ounce = 30 ml

1 pint = 480 ml

1 ounce = 30 gm

1 pound = 454 gm

NC Medicaid Medicaid

Outpatient Pharmacy Clinical Coverage Policy No: 9

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Attachment H: Summary of Point-of-Sale Codes and Other Information for

Current Claim Format

1. Use of PA Code field (NCPDP D.0):

“1” -PA Code

USED TO OVERRIDE THE MEDICARE EDIT*

“4” -PA Code

CO-PAY-EXEMPT

“2” -Submission Clarification Code

SUPPLY-OVERRIDE

2. Use NCPDP D.0 Beneficiary Residence location values instead of unique NC values:

Type of Facility

NCPDP Location

Not Specified

Home

Skilled Nursing Facility

Nursing Facility

Assisted Living Facility

Custodial Care Facility

Group Home

ICF/Mental Retardation

Hospice

Correctional Institution

Adult Care Home

3. Dispense as Written Codes Currently Available

The following DAW codes are currently accepted on Medicaid claims:

DAW 0

No product selection indicated

DAW 1

DAW 2

Substitution not allowed by Prescriber. Prescriber indicated brand is “Medically

Necessary”

Substitution allowed. Patient requested product dispensed.

DAW 3

DAW 4

DAW 5

DAW 6

Substitution allowed. Pharmacist selected product dispensed.

Substitution allowed. Generic drug not in stock.

Substitution allowed. Brand drug dispensed as a generic.

Override.

DAW 7

DAW 8

DAW 9

Substitution not allowed. Brand drug mandated by law (can be used for NTI drugs)

Substitution allowed. Generic drug not available in Marketplace

Substitution allowed by prescriber but Plan requests brand- Patient’s Plan requested

brand product to be dispensed.

4. Use of Prescription Origin Code in NCPDP field 419-DJ:

Written

Telephone

Electronic

Facsimile

Pharmacy

Note: Zero and null values are not accepted.

5. Valid Values for Other Coverage Code

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Outpatient Pharmacy Clinical Coverage Policy No: 9

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00=Not Specified

01=No Other Coverage Identified

02=Other Coverage Exists-Payment Collected

03=Other Coverage Exists-This Claim Not Covered

04=Other Coverage Exists-Payment Not Collected

6. Valid Values for Submission Clarification Code

02=Other Override (Supply Override) and PA/Non-Preferred Drug Override

03=Vacation Supply

04=Lost Prescription

05=Therapy Change

Submit Usual and Customary in addition to Gross Amount

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Outpatient Pharmacy Clinical Coverage Policy No: 9

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Attachment I: Pharmacy Remittance Advice (RA)

1. Retain all RAs to assist in keeping claims and payment records current.

2. The last RA the provider receives each year serves as the annual 1099 form.

3. Refer to the RA first if questions arise about a particular claim.

4. If the RA cannot resolve questions on claims payment, please correspond with CSC using the

following procedures:

a. Call CSC at 1-800-686-6696

5. The RA is also a status report. It gives the current status of active claims. If a submitted claim

does not appear by the third RA, please inquire about it using the following procedure:

a. Go to the NCTracks portal at www.nctracks.nc.gov to view the claim

b. Call the AVR system.

c. Call CSC at 1-800-686-6696

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Outpatient Pharmacy Clinical Coverage Policy No: 9

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Attachment J: ICD-10-CM Codes to Indicate Pregnancy

ICD-10-CM

O09.00

O09.01

O09.02

O09.03

O09.10

O09.11

O09.12

O09.13

O09.211

O09.212

O09.213

O09.219

O09.291

O09.292

O09.293

O09.299

O09.30

O09.31

O09.32

O09.33

O09.40

O09.41

O09.42

O09.43

O09.511

O09.512

O09.513

O09.519

O09.521

O09.522

O09.523

O09.529

O09.611

O09.612

O09.613

O09.619

O09.621

O09.622

O09.623

O09.629

O09.70

O09.71

O09.72

O09.73

O09.811

O09.812

O09.813

O09.819

O09.821

O09.822

O09.823

O09.829

O09.891

O09.892

O09.893

O09.899

O09.90

O09.91

O09.92

O09.93

O36.80x0

O36.80x1

O36.80x2

O36.80x3

O36.80x4

O36.80x5

O36.80x9

Z33.1

Z34.00

Z34.01

Z34.02

Z34.03

Z34.80

Z34.81

Z34.82

Z34.83

Z34.90

Z34.91

Z34.92

Z34.93

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Attachment K: Pharmacy Prior Approval Criteria

Below is a list of prescription drugs that require prior authorization (PA).

Refer to https://medicaid.ncdhhs.gov/

for the medical necessity criteria for coverage for each medication

that requires prior approval.

Pharmacy Prior Approval Drugs and Criteria

• Aduhelm

• Agents for Duchenne Muscular Dystrophy

• Antiemetic Agents

• Antifungal Agents - Vusion

• Antinarcolepsy/Antihyperkinesis Agents

• Antiparkinsons Agents

• Camzyos

• Cialis

• Crinone

• Cystic Fibrosis

• Emflaza

• Epidiolex Initial PA Criteria

• Epinephrine Auto-Injections

• Evrysdi

• Gattex

• GLP-1 Receptor Agonists and Combinations

• Growth Hormones

• Hematinics (Procrit, Epogen, Aranesp, Mircera, Retacrit)

• Hepatitis C medications

• Hetlioz

• Hormone Therapy for Beneficiaries under 18

• Immunomodulators

• Ivermectin

• Juxtapid

• Lequembi

• Lupus Medications

• Migraine Therapy - Calcitonin Gene-Related Inhibitors

• Monoclonal Antibodies

• Movement Disorders

• Neuromuscular Blocking Agents (Botox, Myobloc, Dysport, Xeomin)

• Nexlizet and Nexletol

• Opioid Analgesics

• Opioid Dependence Therapy Agents

• PCSK9 Inhibitors

• Mu-Opioid Receptor Antagonists, Peripherally-Acting (Relistor)

• Sedative Hynotics

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• SGLT2 Inhibitors and Combinations

• Synagis

• Therapeutic Continuous Glucose Monitoring Systems (CGM) and Related Supplies

• Topical Antihistamines

• Topical Anti-Inflammatories

• Topical Local Anesthetics

• Triptans

• Vivjoa

• Zolgensma

• Vowst

• Behavioral Health Clinical Edits Criteria - Pediatric

• Behavioral Health Clinical Edits Criteria - Adult