Virginia Regulatory Town Hall
Department of Medical Assistance Services
Board of Medical Assistance Services

General Notice
2012 Pharmacy Reimbursement Changes
Date Posted: 3/6/2012
Expiration Date: 4/6/2012
Submitted to Registrar for publication: YES
No comment forum defined for this notice.

Legal Notice

Commonwealth of Virginia Department of Medical Assistance Services


(Pursuant to § 1902(a)(13) of the Act (U.S.C. 1396a(a)(13)


The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia State Plan for Medical Assistance (State Plan) with two changes to the State Plan:  (i) elimination of the additional reimbursement for unit dose dispensing systems for patients residing in nursing facilities (12 VAC 30-80-40 .7), and; (ii) a modification of the model supplemental rebate agreement between the Commonwealth of Virginia and pharmaceutical manufacturers for legend drugs provided to fee-for-service Medicaid individuals (12 VAC 30-80-40 .9). The elimination of the additional reimbursement for the unit dose dispensing system change is being made as a result of the 2011 Acts of the Assembly, Chapter 890, Item 297 NNNN. The modifications of the model supplemental rebate agreement are being made to improve government operational efficiencies by reducing paperwork.


The payment of the dispensing fee for unit dose prescription drugs covered by DMAS is no longer necessary or appropriate as a result of the onset of the Medicare Part D program.  This Medicare program reimburses for most of the drugs required by individuals in nursing facilities.  Although DMAS still covers drugs not covered by Medicare Part D (benzodiazepines, barbiturates, and over the counter medications) and prescription drugs for Medicaid nursing facility individuals who are not eligible for Medicare Part D, the vast majority of unit dose prescriptions by volume are now provided by Medicare Part D plans. Additionally, DMAS determined in a recent analysis of pharmacy reimbursement that nursing facility pharmacies, which do provide unit dose prescriptions to nursing facility individuals, are no longer preparing unit dose dispensing systems in-house.  Instead, they are receiving pre-packaged unit dose prescriptions directly from external pharmacies, thereby making the unit dose dispensing fee no longer necessary. DMAS estimated that the elimination of the unit dose dispensing fee will save the agency approximately $323,708 in federal matching fund dollars for the 2012 state fiscal year.


The second change to the State Plan provides for streamlining the supplemental rebate agreement process between DMAS and drug manufacturers.  Modifications to the supplemental rebate contracts and their amendments will reduce the amount of paperwork necessary to review and execute the contracts for pharmaceutical manufacturers by combining contracts into one document and the contract amendments into another document. Once implemented, the streamlined documents can be renewed annually by executing a two page amendment thereby reducing paperwork and saving turn-around time. All CMS requirements will remain in the revised documents and the financial formula. There are no expected increase or decrease in annual aggregate expenditures for this change. 

This notice is intended to satisfy the requirements of 42 C.F.R § 447.205 and § 1902(a)(13) of the Social Security Act, 42, U.S.C. § 1396(a)(13). A copy of this notice is available for public view from Scott Cannady, Division of Health Care Services, 600 East Broad Street, Suite 1300, Richmond VA 23219, and this notice is available for public review on the Regulatory Town Hall (  Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Mr. Cannady and such comments are available for review at


Contact Information
Name / Title: Brian McCormick  / Regulatory Supervisor
Address: 600 E. Broad St., Suite 1300
Richmond, 23219
Email Address:
Telephone: (804)371-8856    FAX: (804)786-1680    TDD: (800)343-0634