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

General Notice
Legal Notice of Three Pharmacy Changes
Date Posted: 11/6/2003
Expiration Date: 12/31/2003
Submitted to Registrar for publication: YES
No comment forum defined for this notice.
The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia Title XIX State Plan for Medical Assistance (Medicaid) and the Virginia Administrative Code to provide for changes to the Amount, Duration, and Scope of Pharmacy Services, Drug Utilization Review, and State Supplemental Drug Rebates Pursuant to both § 1927(d) of the Social Security Act and 2003 Acts of Assembly, Chapter 1042 Items 325 UU, VV, and ZZ, DMAS is making three important changes to its coverage of pharmacy services: (i) requiring prior authorization of all legend drugs that are not contained in its preferred drug list or other drugs as recommended by the Pharmacy and Therapeutics Committee prior to reimbursing for them; (ii) modifying the prospective drug utilization review (ProDUR) program; and, (iii) requiring prior authorization of prescription drugs in instances when Medicaid recipients use high numbers of different prescription medications (high prescription thresholds). Two of these modifications to the Title XIX State Plan for Medical Assistance (Medicaid) were mandated, as discussed below, by the 2003 General Assembly. It was estimated during the 2003 budget development process that these three changes in combination will save or avert approximately $44 million total funds for Fiscal Year 2004 in Medicaid expenditures. Prior Authorization and Preferred Drug List with State Supplemental Rebates Chapter 1042 of the 2003 Acts of Assembly Item 325 ZZ, directs DMAS to establish a Pharmacy and Therapeutics Committee (P & T Committee) and utilize the committee’s services to develop the Virginia Medicaid preferred drug list. The P & T Committee will recommend to DMAS: (i) therapeutic classes of drugs to be subject to the preferred drug list and prior authorization requirements; (ii) specific drugs within each class to be included on the preferred drug list; (iii) appropriate exclusions and ‘grandfather’ provisions. For those therapeutic classes of drugs subject to the preferred drug list program, a preferred drug is one which meets the safety, clinical efficacy, and pricing standards employed by the P & T Committee. The Committee may also recommend prior authorization requirements or clinical guidance regarding preferred drugs or other drugs. Non-preferred legend drugs may still be covered for reimbursement by DMAS but will require prior authorization before payment will be allowed. DMAS or its agent shall negotiate, with drug manufacturers, state supplemental rebates on prescription drugs to be included in the DMAS preferred drug list. Rebates for legend drugs, provided by the manufacturers under the authority of state supplemental rebate agreements, shall be in addition to those rebates resulting from federal agreements. Prospective Drug Utilization Review (ProDUR) Section 1927 of the Social Security Act requires states to conduct prospective, for non-institutionalized recipients, and retrospective, for nursing facility residents, drug utilization review (DUR). The purpose of DUR is to protect recipients from taking different prescription drugs that might conflict with each other, taking different prescription drugs that have the same therapeutic effect (thereby doubling or tripling the therapeutic dosages), taking prescription drugs in incorrect dosages or for too long or not long enough to be effective, taking prescription drugs that are not approved for their diagnoses, or taking prescription drugs that could be harmful for other health conditions that they may have. To date, the DMAS ProDUR program has been educational and advisory. DMAS has determined, from evaluating claims processing data, that further program enhancements are needed to protect Medicaid recipients from negative clinical outcomes. Therefore, this proposed change will be for the claims processing of prescription drugs that conflict with ProDUR edits. Such claims will be rejected back to the dispensing pharmacist for further interventions. The dispensing pharmacist will typically contact the prescribing physician in order to resolve the conflict. The prescribing physician will then be able to either change the prescription medication order or provide additional medical information in support of the original prescription. Such interventions have been the goal of the DUR program since its implementation. High Prescription Thresholds Chapter 1042 of the 2003 Acts of Assembly, Items 325 UU and VV mandated that DMAS implement a program of utilization review and prior authorization of pharmacy services for institutionalized and non-institutionalized recipients who use large numbers of different prescription drugs within specific time periods. The thresholds set out in the statute are: non-institutionalized recipients using more than 9 unique prescription drugs in a 180-day period; and institutionalized (nursing facility) recipients using more than 9 unique prescriptions in a 30-day period. In addition to the General Assembly’s mandate noted above, Medicaid programs are permitted to conduct utilization review of covered services pursuant to 42 CFR § 440.230 (d) “[t]he agency may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures.” Pursuant to this federal authority, DMAS may modify the limits contained in the state mandate at Chapter 1042, Items UU and VV. Pursuant to the Code of Virginia §2.2-4011, the Department is submitting emergency regulations for all three of these changes to the Governor. Once the Governor has approved these emergency regulations, DMAS will provide copies of the emergency regulations to all requesters. Please make your request in writing, indicating which emergency regulation is desired, to the address below. In addition, these emergency regulations will be published in the Virginia Register of Regulations and will also be available for public review on the electronic Regulatory Town Hall at Persons wishing to comment on the emergency regulations may do so in writing in the following ways: written comments, in hard copy, may be submitted to Javier Menendez, R.Ph., Manager Pharmacy Services, DMAS, 600 East Broad Street, Richmond, VA, 23219; electronic written comments may be submitted to; electronic written comments may be recorded in the Persons wishing to review submitted comments may do so either at DMAS (at the previously cited address) or in the proposed permanent regulations during the permanent rule making process (COV 2.2-4007). Further information is also available at

Contact Information
Name / Title: Victoria P. Simmons  / Regulatory Coordinator
Address: DMAS, 600 E. Broad St., Suite 1300
Richmond, 23219
Email Address:
Telephone: (804)786-7959    FAX: (804)786-1680    TDD: (800)343-0634