Pharmacy Maximum Allowable Ingredient Cost Survey Begins October 1, 2020

Update Published December 9, 2020

Given the ongoing challenges and constantly evolving health care landscape associated with the unprecedented COVID-19 public health emergency (PHE), the Department of Health Care Services (DHCS), in partnership and collaboration with Magellan Medicaid Administration, Inc. (Magellan), has decided to lengthen the time for the full implementation of the transition to Medi-Cal Rx by three (3) months. DHCS and Magellan will continue to dedicate their combined efforts and rigorous preparations towards Assumption of Operations (AOO) for Medi-Cal Rx on April 1, 2021. In the interim, all current processes and protocols, both effectuated by DHCS and our Medi-Cal managed care plans (MCPs), respectively, will remain unchanged and in place until Medi-Cal Rx launches. More information on this extension can be found in the article titled “Medi-Cal Lengthens Transition Time to Full Implementation – Go-Live on April 1, 2021” that published on November 16, 2020.

Original Published September 29, 2020

Starting January 1, 2021, pursuant to Governor Newsom’s January 7, 2019 Executive Order N-01-19, Medi-Cal pharmacy benefits will be transitioned to and thereafter administered through the fee-for-service delivery system for all Medi-Cal beneficiaries (generally referred to as “Medi-Cal Rx”). The Department of Health Care Services (DHCS) has partnered with Magellan Medicaid Administration, Inc. (Magellan) to provide a wide-variety of administrative services and supports for Medi-Cal Rx.

As part of Medi-Cal Rx, Magellan has contracted with Mercer Government Human Services Consulting (Mercer) to establish and maintain a Maximum Allowable Ingredient Cost (MAIC) program for multisource generic drug reimbursement. The objective of the MAIC program is to establish upper limit, multisource, generic ingredient reimbursement rates that encourage efficient purchasing while being responsive to drug pricing fluctuations.

For the development of the MAIC program rates, Mercer will soon be surveying a statistically valid sample of approximately six hundred (600) Medi-Cal enrolled outpatient pharmacies on their drug purchase price invoice data. The information will be used to establish MAIC reimbursement rates for multisource generic drugs, effective January 1, 2021. These rates will be published no later than December 1, 2020.

The MAIC survey collection period will be from October 1 through October 13, 2020. Pharmacies that do not receive a survey notification do not need to take any action on the MAIC survey. Only pharmacies selected to participate in the survey must submit pharmacy invoice data directly to Mercer, as described in the survey notification.

A virtual stakeholder information session to review the MAIC survey process and project timeline was held on Wednesday, September 16, at 1:00 p.m. PDT. The meeting materials can be accessed at this link. Additional questions regarding the MAIC survey may be directed to Mercer at

DHCS reminds the Medi-Cal pharmacy fee-for-service provider community to closely monitor upcoming Medi-Cal pharmacy bulletins for additional information regarding future updates, by signing up via the Medi-Cal Rx Subscription Service.

For updates on Medi-Cal Rx, please visit the Department’s dedicated websites at Medi-Cal Rx and the DHCS website. General questions may be directed to In addition, DHCS encourages stakeholders to review the Medi-Cal Rx Frequently Asked Questions (FAQ) document, which continues to be updated as the project advances.