Recommencement of Pharmacy Retroactive Claim Adjustments February 10, 2020

February 6, 2020

The Centers for Medicare & Medicaid Services (CMS) published its final rule on covered outpatient drugs (CODs) on February 1, 2016. Under the final rule, each state Medicaid agency was required to adopt a methodology based on actual acquisition cost (AAC) for CODs. As has been published in previous Medi-Cal Updates, pursuant to California's State Plan Amendment 17-002, the Department of Health Care Services (DHCS) implemented a new fee-for-service reimbursement methodology for CODs to comply with the final rule. The associated system changes went into effect on February 23, 2019.

CMS requires that DHCS make retroactive adjustments for claims with dates of service beginning with the policy effective date of April 1, 2017, through the implementation date of February 23, 2019. DHCS processed the first iteration of these adjustments (claims with dates of service in the month of April 2017) in May 2019, and then paused further adjustments. In the fall of 2019, DHCS contacted all Medi-Cal pharmacy providers to notify them of an Alternative Payment Arrangement (APA) for remaining adjustments. Providers could register for this option via an on-line application that was available from October 28, 2019, through and including November 22, 2019. Providers approved for the APA have since been notified by DHCS and will have their remaining adjustments processed separately from the previous adjustment process.

For providers that did not choose the APA, DHCS will resume retroactive adjustments beginning with the February 10, 2020, checkwrite date, through February 2021, for the remaining impacted claims with dates of service from May 1, 2017, through February 23, 2019.

If you have questions regarding these adjustments, please call the Telephone Service Center at 1-800-541-5555, option 5, followed by option 6.

If providers want additional information regarding the pharmacy retroactive claim adjustments, they may refer to the Pharmacy Retroactive Claim Adjustments FAQs on the Medi-Cal website. Providers may also refer to the Pharmacy Reimbursement Project page of the DHCS website for additional information regarding this project.

DHCS strongly encourages the Medi-Cal pharmacy fee-for-service provider community to closely monitor Medi-Cal Update pharmacy bulletins for additional information regarding any future updates.