Section 14105.456.

(a) For purposes of this section, the following definitions shall apply:

(1) "Generically equivalent drugs" means drug products with the same active chemical ingredients of the same strength, quantity, and dosage form, and of the same generic drug name, as determined by the United States Adopted Names Council (USANC) and accepted by the federal Food and Drug Administration (FDA), as those drug products having the same chemical ingredients.

(2) "Legend drug" means any drug with a label that states "Caution: Federal law prohibits dispensing without prescription," "Rx only," or words of similar import.

(3) "Medicare rate" means the rate of reimbursement established by the Centers for Medicare and Medicaid Services for the Medicare Program.

(4) "Nonlegend drug" means any drug with a label that does not contain a statement referenced in paragraph (2).

(5) "Pharmacy rate of reimbursement" means the reimbursement to a Medi-Cal pharmacy provider pursuant to the provisions of paragraph (2) of subdivision (b) of Section 14105.45.

(6) "Physician-administered drug" means any legend drug, nonlegend drug, or vaccine administered or dispensed to a beneficiary by a Medi-Cal provider other than a pharmacy provider and billed to the department on a fee-for-service basis.

(7) "Volume-weighted average" means the aggregated average volume for generically equivalent drugs, weighted by each drug's percentage of the total volume in the Medi-Cal fee-for-service program during the previous six months. For purposes of this paragraph, volume is based on the standard billing unit used for the generically equivalent drugs.

(b) The department may reimburse providers for a physician-administered drug using either a Healthcare Common Procedure Coding System code or a National Drug Code.

(c) The Healthcare Common Procedure Coding System code rate of reimbursement for a physician-administered drug shall be equal to the volume-weighted average of the pharmacy rate of reimbursement for generically equivalent drugs. The department shall publish the Healthcare Common Procedure Coding System code rates of reimbursement.

(d) The National Drug Code rate of reimbursement shall equal the pharmacy rate of reimbursement.

(e) Notwithstanding subdivisions (c) and (d), the department may reimburse providers for physician-administered drugs at a rate not less than the Medicare rate.

(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

(g) (1) The rates provided for in this section shall be implemented commencing January 1, 2011, but only if the director determines that the rates comply with applicable federal Medicaid requirements and that federal financial participation will be available.

(2) In assessing whether federal financial participation is available, the director shall determine whether the rates comply with the federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the extent that the director determines that a rate of reimbursement described in this section does not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(h) The director shall seek any necessary federal approval for the implementation of this section. To the extent that federal financial participation is not available with respect to a rate of reimbursement described in this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(Added by Stats. 2010, Ch. 717, Sec. 151. Effective October 19, 2010.)