Almost four years after publishing its proposed rule, the Centers for Medicare & Medicaid Services (CMS) released its final rule on February 1, 2016, pertaining to Medicaid reimbursement for covered outpatient drugs.  The finalized regulations implement provisions of the Affordable Care Act, and revise several key aspects of Medicaid program on drug rebates, and coverage and payments for outpatient drugs. CMS’s fact sheet emphasizes that the final rule assists states and the federal government in managing drug costs, establish the long term framework and stability for implementation of the Medicaid drug rebate program, and create a more fair reimbursement system for Medicaid programs and pharmacies.  The new CMS regulations become effective on April 1, 2016.  CMS also requested addition comments on the definition of line extension. 

On February 11, 2016, CMS sent letters to state Medicaid directors concerning implementation of the Covered Outpatient Drug final rule.  The correspondence provided further guidance to states on: (a) changing definition of ingredient cost reimbursement from an estimated acquisition cost to actual acquisition cost, (b) reimbursement under the 340B program, (c) implementation of the federal upper limit for multiple source drugs, and (d) clarification that dispensing fee should reflect the pharmacist’s professional services and costs to dispense a drug.  States are required to submit a revised State Implementation Plan (SIP) no later than April 1, 2017, to comply with the provisions of the final rule.