The Indiana Family and Social Services Administration (“FSSA”) published a proposed rule that affects Medicaid reimbursement for legend and non-legend drugs. A public hearing about this rule is schedule for January 31, 2019 at 10:00am EST, and the FSSA is accepting public comments through that date.

The most significant changes affect coverage of non-legend drugs, namely, that all Medicaid programs (fee-for-service and managed care) will only cover non-legend drugs on the over-the-counter formulary, and at a rate that is the lowest of the “state over-the-counter maximum allowable cost plus a professional dispensing fee” or the provider’s usual and customary charge, which term is defined in existing Medicaid rules. With respect to legend and non-legend drugs, FSSA proposes to reduce the professional dispensing fee to $10.48, and deletes “Health Maintenance Organization pharmacy services” from the list of services exempt from the copayment requirement. The proposed rule includes two program integrity measures: 1) prohibiting split billing of legend and non-legend drugs to capture more dispensing fees; and 2) prohibiting a provider from “circumventing prior authorization criteria.” The proposed rule does not define that term or specify whether the prohibition requires intent to violate such criteria.