California Medical Bill Reviewer Certification

1. California Medical Bill Reviewer Certification Unit 5: Pharmacy Fee Schedule Module 1: Pharmacy Guidelines

2. Overview Hi! In this module, you will learn about pharmacy guidelines. You will learn how simple and compound prescriptions are reimbursed and how to look up their reimbursement values. Then, you will learn how other types of pharmacy services are reimbursed. Let’s start by discussing the basics of the pharmacy guidelines... • Pharmacy Guidelines • Pharmacy Reimbursements • Simple Prescriptions • Compound Prescriptions • Other Pharmacy Services • Brand Name Drugs • Generic Drugs • Pharmacy Guidelines

3. Pharmacological services are listed in a separate fee schedule, much like med-legal, ambulance, and DMEPOS services. The pharmacy fee schedule includes reimbursement for: Pharmacy Guidelines • Simple prescriptions • Compound prescriptions

4. The maximum reasonable fee for pharmacy services rendered after March 1, 2007 is 100% of the fee prescribed in the relevant Medi-Cal payment system. You may access the current reimbursement rates at the following link: Pharmacy Reimbursement Workers' compensation pharmacy fee schedule If you click on the above link now, you will see the herelink, which will route you to the current pharmacy rates. • There, you will access the Medi-Cal pharmacy rates by clicking on a link to a zip file.

5. Pharmacy Reimbursement • As you know, there are two types of prescriptions for which there are reimbursement guidelines in the pharmacy fee schedule, which are: Simple Prescriptions Compound Prescriptions Let’s take a look…

6. On the Workers’ Compensation Pharmacy website you will also find a calculator that allows you to look up the current price for simple prescriptions. Simple Prescription Reimbursement

7. As you can see, using the calculator to look up the price for simple prescriptions requires a few pieces of information that you can locate on a pharmacy bill. The required information is: Simple Prescription Reimbursement • NDC number • Metric decimal number of units • U & C price or Billed Charge • Date of Service

8. Now let’s look at an example... Simple Prescription Reimbursement If you key... • The example NDC code in the NDC number field • 100 units in the Units field • $12.48 in the U & C field • Date of Service: February 2, 2010 ...the calculator provides you with the payment price for the prescription.

9. Compound Prescriptions Now that you are familiar with how simple prescriptions are reimbursed, let’s take a look at how to find the reimbursement values for compound prescriptions. • Pharmacy Guidelines • Pharmacy Reimbursements • Simple Prescriptions • Compound Prescriptions • Other Pharmacy Services • Brand Name Drugs • Generic Drugs • Compound Prescriptions

10. As you might expect, calculating the reimbursement value for compound prescriptions is more complex than calculating reimbursements for simple prescriptions. Compound Prescription Reimbursement To calculate the reimbursement value for compound prescriptions, you must fill out a different form. You can navigate to the form by clicking the here link above the simple calculation table. Full instructions are provided on the website! Let’s take a look…

11. The first step in calculating the reimbursement for a compound prescription is keying the total number of separate ingredients that make up the compound prescription. Compound Prescription Reimbursement For example, suppose a compound prescription is composed of 5 separate ingredients. If you key 5 in the Count field, and click Continue, a calculation table appears. Let’s take a look…

12. Compound Prescription Reimbursement • Notice that there are more data elements for the compound prescription reimbursement calculation. The data elements are: • Count • Usual & Customary Price • Date of Service • Dosage Form • Dosage Units • Route of Administration • Number of Containers • Sterility Fee Note that not all of the fields are required!

13. Compound Prescription Reimbursement • You will also notice that below the calculation form, you must key each ingredient’s NDC code and the associated number of units of each ingredient. Now let’s take a look at an example...

14. Compound Prescription Reimbursement • Suppose you need to calculate the price for Vicodin ES, with a billed charged of $91.52. Vicodin ES is is composed of two ingredients. As before, you key... • Count: 2 • U & C: $91.25 • Date of Service: 10/01/2006 • Dosage Form: Powder • Dosage Units: 2 • Route of Administration: Oral • Number of Containers: 1 • Sterility Fee: optional Remember, you must key the NDC # & Number of Units of each ingredient.

15. Compound Prescription Reimbursement Why is the dosage form Powder? As compound drugs are mixed, they must be Powder or Liquid. Why is the Dosage Metric Decimal Units 2? Vicodin is made of 2 powders. It is important to use the appropriate NDC code. Since the compound is powder-based, the NDC codes must be for the powder form of each ingredient.

16. Compound Prescription Reimbursement • As before, the calculator provides you with the payment price for the prescription.

17. Other Pharmacy Services There are certain pharmacy services that are not reimbursed per the Medi-Cal payment system. Let’s start by taking a look at how drugs not listed in the Medi-Cal database are reimbursed... • Pharmacy Guidelines • Pharmacy Reimbursements • Simple Prescriptions • Compound Prescriptions • Other Pharmacy Services • Drug Reimbursement • Other Pharmacy Services • Drug Reimbursement

18. In some instances, specific pharmacy services are not covered by the Medi-Cal payment system. Other Pharmacy Services Under these circumstances, the maximum reasonable payment shall not exceed the fee specified in the OMFS 2009. The reimbursement calculation differs for brand name and generic drugs. Let’s take a look…

19. To calculate the reimbursement value for brand name drugs, use the following equation: Drug Reimbursement Drug Reimbursement AWP x .83 + $7.25 dispensing fee = Total Reimbursement AWP: Average Whole Sale Price For Example: If the AWP = $25.00 AWP = $25.00 Percentage of AWP = .83 Dispensing Fee = $7.25 Total Reimbursement = $28.00

20. How to calculate compound prescription reimbursements. Pharmacy Reimbursement Guidelines How drugs are reimbursed per the OMFS 2007. How pharmacy services are reimbursed. How to calculate simple prescription reimbursements. Summary

21. Module 1 Click on the link to go directly to the quiz. Feel free to review any of the material before you move on. Good Luck! Quiz: U5M1: Pharmacy Guidelines