AMP Rule

It has been a decades-long battle to reach fair reimbursement regulations for Medicaid programs and pharmacies. As of February 1, 2016, the long awaited final AMP rule was released by the Centers for Medicare and Medicaid Services (CMS) and was published in the Federal Register to showcase the impact on pharmacy reimbursement.

The final rule is designed to ensure that pharmacy reimbursement aligns with the acquisition cost of drugs, and that states pay a suitable professional dispensing fee. The rule recognizes that Congress allows individual multi-source generic drugs to be paid above the AMP times 175% target. Bear in mind that the 658-page policy is still in early stages of assessment, but there are several provisions that highlight the fair treatment of community pharmacies, allowing them to continue to provide patient access to their services.

Below are a few key points outlined by the new rule:

  • AMP-based FULs are in federal statute and must be published by CMS.
  • States must limit retail pharmacy reimbursement for fee-for-service Medicaid payments for multi-source generic drugs to FUL limits in a market-basket aggregate.
  • The rule requires states to evaluate all portions of retail pharmacy reimbursement, both ingredient costs and dispensing fees, to assure adequate reimbursement and to preserve patient access. This requires states to move to an actual acquisition cost payment for ingredient costs and a professional dispensing fee based upon research.
  • CMS is requiring states to consider both the ingredient cost reimbursement and the professional dispensing fee reimbursement when proposing changes of the reimbursement for Medicaid covered drugs, and states must provide adequate data to support any proposed changes through a State Plan Amendment (SPA) formal review process.