DEPARTMENT OF HEALTH AND SOCIAL SERVICES

Division of Social Services

Statutory Authority: 31 Delaware Code, Section 512 (31 Del.C. §512)

PUBLIC NOTICE

PROPOSED

MEDICAID/MEDICAL ASSISTANCE PROGRAMS

Client Cost Sharing for Pharmaceutical Services

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and with 42CFR §447.205, and under the authority of Title 31 of the Delaware Code, Chapter 5, Section 512, Delaware Health and Social Services (DHSS) / Division of Social Services / Medicaid/Medical Assistance Program is proposing to amend the Title XIX Medicaid State Plan and the Division of Social Services Manual (DSSM) to establish the provisions relating to imposing and collecting co-payments for pharmaceutical services from Medicaid/Medical Assistance clients.

Any person who wishes to make written suggestions, compilations of data, testimony, briefs or other written materials concerning the proposed new regulations must submit same to Sharon L. Summers, Policy and Program Development Unit, Division of Social Services, P.O. Box 906, New Castle, Delaware 19720-0906 by November 30, 2004.

The action concerning the determination of whether to adopt the proposed regulation will be based upon the results of Department and Division staff analysis and the consideration of the comments and written materials filed by other interested persons.

SUMMARY OF THE PHARMACY SERVICES CO-PAYMENT POLICY

Title of Notice

Medicaid/Medical Assistance Client Cost Sharing

Overview

42 USC 1396a(a)(14) permits state Medicaid programs to require certain clients to share some of the costs of Medicaid by imposing enrollment fees, premiums, deductibles, coinsurance, co-payments, or similar cost sharing charges. The Delaware Medicaid/Medical Assistance Program (DMAP) exercises this option to impose a co-payment for prescription drugs for Medicaid clients. Having elected to impose this co-payment, DMAP must comply with the specific provisions of 42 U.S.C. 1396o, 42 CFR §§447.15, 447.21, 447.53, 447.54, 447.55 and, 447.57.

Summary of Pharmacy Services Co-Payment Policy

This notice is being given to provide information of public interest with respect to the intent of DSS to amend the Division of Social Services Manual (DSSM) and to submit to the Centers for Medicare and Medicaid Services (CMS) an amendment to the Title XIX Medicaid State Plan to establish and implement co-payments for pharmacy services. The following provisions of this amendment shall be implemented on January 10, 2005:

• All clients, other than those specifically excluded, are liable for sharing the cost of Medicaid covered prescription drugs. Medicaid clients are required to pay a specific pharmacy co-pay amount for each initial and refilled prescription and over-the-counter drug filled at a pharmacy participating in the Medicaid program.

• In accordance with 42 CFR §447.54, the pharmacy co-pay amount is based on the Medicaid fee for the drug being dispensed. The co-pay amounts imposed are as follows:

Medicaid Fee Co-Pay Amount

$10.00 or less $ .50

$10.01-$25.00 $1.00

$25.01-$50.00 $2.00

$50.01 or more $3.00

• Cumulative Maximum [42 CFR §447.54(d)]. Not applicable, there is no maximum.

• In accordance with Social Security Act §1916 and 42 CFR §447.53, co-payments are not imposed upon categorically needy individuals for the following:

• Services furnished to individuals under 21 years of age;

• Services furnished to pregnant women; including postpartum care;

• Services furnished to any individual who is an inpatient in a hospital, long-term care facility, or other medical institution;

• Emergency services;

• Family Planning services and supplies; and,

• Services furnished to individuals receiving hospice care.

• The pharmacy will be advised via the Point-of-Sale System regarding the client's liability for the drug co-pay and the amount of the co-pay. When a client advises a pharmacy of an inability to pay the applicable co-pay amount at the time the prescription is filled, the pharmacy cannot refuse to fill the prescription and must dispense the drug as prescribed [42 CFR §447.53(e)].

• The client will remain liable for reimbursement of the co-pay amount and will be responsible for paying the pharmacy when financially able.

• Medicaid will not pay the co-pay amount to the pharmacy where a client declares an inability to pay. Provider payment will continue to be that sum which is the Medicaid fee minus the applicable client co-pay amount.

The proposed amendment applies to Medicaid clients and shall be implemented on January 10, 2005.

The proposed cost sharing requirements are subject to approval by the Centers for Medicare and Medicaid Services (CMS)

DSS PROPOSED REGULATION #04-22a

Page 54

Revision: OMB No.: 0938-

State/Territory: DELAWARE

Citation 4.18 Recipient Cost Sharing and Similar Charges (a) Unless a waiver under

42 CFR 447.51through 447.58 42 CFR 431.55(g) applies deductibles, coinsurance rates, and

copayments do not exceed the maximum allowable charges under

42 CFR 447.54.

1916 (a) and (b) (b) Except as specified in items 4.18

of the Act (b) (4), (5) and (6) below, with

respect to individuals covered as

categorically needy or as

qualified Medicare beneficiaries

(as defined in section 1905 (p) (1)

of the Act) under the plan:

(1) No enrollment fee, premium,

or similar charge is imposed

under the plan.

(2) No deductible, coinsurance,

co-payment, or similar

charge is imposed under the

plan for the following:

(i) Services to individuals

under age 18, or under--

Age 19

Age 20

Age 21

Reasonable categories

of individuals who are

age 18 or older, but

under age 21, to whom

charges apply are listed

below, if applicable.

(ii) Services to pregnant

women related to the

pregnancy or any other

medical condition that

may complicate the

pregnancy.

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State/Territory: DELAWARE

Citation 4.18 (b) (2) (Continued)

42 CFR 447.51 (iii) All services

through furnished to pregnant

447.58 women.

c Not applicable.

Charges apply for

services to pregnant

women unrelated to

the pregnancy.

(iv) Services furnished to

any individual who is an

inpatient in a hospital,

long-term care facility,

or other medical

institution, if the

individual is required, as

a condition of receiving

services in the

institution, to spend for

medical care costs all

but a minimal amount of

his or her income

required for personal

needs.

(v) Emergency services if

the services meet the

requirements in 42 CFR

447.53 (b) (4).

(vi) Family planning

services and supplies

furnished to individuals

of childbearing age.

(vii) Services furnished

by a health maintenance

organization in which

the individual is

enrolled.

1916 of the Act, (viii) Services furnished

P.L. 99-272, to an individual

(Section 9505) receiving hospice care,

as defined in section

1905 (o) of the Act.

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State/Territory: DELAWARE

Citation 4.18(b) (Continued)

42 CFR 447.51 (3) Unless a waiver under

through 42 CFR 431.55 (g)

447.48 applies, nominal deductible,

coinsurance, co-payment, or

similar charges are imposed

for services that are not

excluded from such charges

under item (b) (2) above.

Not applicable. No such

charges are imposed.

(i) For any service, no more

than one type of charge

is imposed.

(ii) Charges apply to

cservices furnished to the

following age groups:

18 or older

19 or older

20 or older

21 or older

Charges apply to

services furnished

to the following

reasonable

categories of

individuals listed

below who are 18

years of age or

older but under age

21.

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State/Territory: DELAWARE

Citation 4.18 (b) (3) (Continued)

42 CFR 447.51 (iii) For the categorically

through 447.58 needy and qualified

Medicare beneficiaries,

ATTACHMENT 4.18-

A specifies the:

A. Service(s) for

which a charge(s) is

applied;

B. Nature of the charge

imposed on each

service;

C. Amount(s) of and

basis for

determining the

charge(s);

D. Method used to

collect the

charge(s);

E. Basis for

determining

whether an

individual is unable

to pay the charge

and the means by

which such an

individual is

identified to

providers;

F. Procedures for

implementing and

enforcing the

exclusions from

cost sharing

contained in 42

CFR 447.53 (b);and

G. Cumulative

maximum that

applies to all

deductible,

coinsurance or co-

payment charges

imposed on a

specified time

period.

c Not applicable.

There is no

maximum.

Page 56b

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State/Territory: DELAWARE

Citation

1916 (c) of 4.18 (b) (4) c A monthly premium is

the Act imposed on pregnant

women and infants who

are covered under

section 1902 (a)(10)(A)

(ii) (IX) of the Act and

whose income equals or

exceeds 150 percent of

the Federal poverty level

applicable to a family of

the size involved. The

requirements of section

1916 (c) of the Act are

met ATTACHMENT

4.18-D specifies the

method the State uses

for determining the

premium and the criteria

for determining what

constitutes undue

hardship for waiving

payment of premiums

by recipients.

1902 (a) (52) 4.18 (b) (5) c For families

and 1925 (b) receiving extended

of the Act benefits during a second

6-month period section

1925 of the Act, a

monthly premium is

imposed in accordance

with sections 1925 (b)

(4) and (5) of the Act.

1916 (d) of 4.18 (b) (6) c A monthly premium,

the Act set on a sliding

scale, imposed on

qualified disabled and

working individuals

who are covered under

section 1902 (a) (10) (E)

(ii) of the Act and whose

income exceeds 150

percent (but does not

exceed 200 percent) of

the Federal poverty level

applicable to a family of

the size involved.

The requirements of

section 1916 (d) of the

Act are met.

ATTACHMENT4.18-E

Specifies the methods

and standards the State

uses for determining the

premium.

DSS PROPOSED REGULATION #04-22b

NEW STATE PLAN PAGE

Revision: ATTACHMENT 4.18-A

Page 1

OMB NO.: 093-0193

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE: DELAWARE

A. The following charges are imposed on the categorically needy for services other than those provided under section 1905

(1) through (5) and (7) of the Act:

Service

Type of Charge

Amount and Basis for Determination

Deductible

Coinsurance

Co-payment

Pharmacy

-0-

-0-

X

This co-pay is effective January 10, 2005 and is based on the nominal ranges specified in 42 CFR 447.54(a)(3), based on the State fee for the service.

NEW STATE PLAN PAGE

Revision: ATTACHMENT 4.18-A

Page 2

OMB NO.: 093-0193

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE: DELAWARE

B. The method used to collect cost sharing charges for categorically needy individuals:

c Providers are responsible for collecting the cost sharing charges from individuals.

c The agency reimburses providers the full Medicaid rate for services and collects the cost sharing charges from

individuals.

C. The basis for determining whether an individual is unable to pay the charge, and the means by which such an individual

is identified to providers, is described below:

The Pharmacy (Pharmacist) Provider will be advised via the Point-of-Sale System regarding the client's liability for the

drug co-pay and the amount of the co-pay. When a client advises a pharmacy of an inability to pay the applicable co-pay

amount at the time the prescription is filled, the pharmacy cannot refuse to fill the prescription and must dispense the drug

as prescribed.

The client will remain liable for reimbursement of the co-pay amount and will be responsible for paying the pharmacy

when financially able. Medicaid will not pay the co-pay amount to the pharmacy where a client declares an inability to

pay. Provider payment will continue to be that sum which is the Medicaid fee minus the applicable client co-pay amount.

NEW STATE PLAN PAGE

Revision: ATTACHMENT 4.18-A

Page 3

OMB NO.: 093-0193

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE: DELAWARE

D. The procedures for implementing and enforcing the exclusions from cost sharing contained in 42 CFR 447.53 (b) are

described below:

Exclusions from cost sharing requirements are programmed into the Medicaid Management Information System and the

Point-of-Sale (POS) System.

Pharmacy Providers have been informed about applicable service and amount; and, the prohibition of service denial if

client is unable to meet the co-pay amount by the following methods: (1) provider manuals, which are distributed to all

providers; and (2) provider newsletters.

Co-payment requirements are set forth in provider manuals, which are distributed, to all providers. The billing instructions

are updated and transmitted to providers via the Provider Newsletter. These instructions have been incorporated in the

billing instruction section of the provider manuals, which are given to all providers.

E. Cumulative maximums on charges:

c State policy does not provide maximums.

c Cumulative maximums have been established as described below:

DSS PROPOSED REGULATION #04-22c

Division of Social Services Manual (DSSM)

14960 Cost Sharing

Section 1902(a)(14) of the Social Security Act permits states to require certain recipients to share some of the costs of Medicaid by imposing upon them such payments as enrollment fees, premiums, deductibles, coinsurance, co-payments, or similar cost sharing charges.

14960.1 Co-Payment Requirement

Effective January 10, 2005, a nominal co-payment will be imposed for generic and brand name prescription drugs as well as over-the-counter drugs prescribed by a practitioner.

The co-payment is based upon the cost of the drug as follows:

Medicaid Payment for the Drug

Co-payment

$10.00 or less

$.50

$10.01 to $25.00

$1.00

$25.01 to $50.00

$2.00

$50.01 or more

$3.00

The co-payment is imposed for each drug that is prescribed and dispensed.

14960.2 Exclusions from Co-payment Requirement

The following individuals and services are excluded from the co-payment requirement:

a. individuals under age 21

b. pregnant women, including the postpartum period

c. individuals eligible under the long term care nursing

d. facility group or the acute care hospital group

e. emergency services

f. family planning services and supplies

h. hospice services

14960.3 Inability to Pay

The pharmacy provider may not refuse to dispense the prescription(s) subject to the co-payment requirement because of the individual's inability to pay the co-payment amount. When a recipient indicates that he or she is unable to meet the co-payment requirement, the pharmacy provider must dispense the prescription(s) as written. Medicaid reimbursement for the prescription(s) will be the Medicaid fee minus the applicable co-payment amount.

The recipient remains liable for the co-payment amount and is responsible for paying the pharmacy when financially able. The pharmacy provider is permitted to pursue reimbursement of the co-payment amount from the recipient.

8 DE Reg. 664 911/01/04)