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2012 Texas Medicaid Provider Procedures Manual

Volume 1, General Information : Section 2: Texas Medicaid Fee-for-Service Reimbursement : 2.2 Fee-for-Service Reimbursement Methodology : 2.2.1 Online Fee Lookup (OFL) and Static Fee Schedules : Drugs and Biologicals
Physician-administered drugs and biologicals are reimbursed under Texas Medicaid as access-based fees under the physician fee schedule in accordance with 1 TAC §355.8085. Physicians and certain other practitioners are reimbursed for physician-administered drugs and biologicals at the lesser of their usual and customary or billed charges and the Medicaid fee established by the HHSC. The Medicaid fee is an estimate of the provider’s acquisition cost for the specific drug and biological. An invoice must be submitted when it is in the provider’s possession. Submission of an invoice will document that the provider is billing the lesser of the usual and customary charge or the access-based fee.
The following guidelines should be used with respect to fee decisions for physician-administered drugs and biologicals:
Fees for biologicals and infusion drugs furnished through an item of implanted DME are based on the lesser of the billed amount or 89.5 percent of the average wholesale price (AWP).
Fees for drugs and biologicals, other than biologicals and infusion drugs that are furnished through an item of implanted DME, that are covered by Medicare are based on the lesser of the billed amount or 106 percent of average sales price (ASP).
Fees for those drugs and biologicals not listed in the first two bullets above that are covered by Medicare are based on the lesser of the billed amount or one of the following:
89.5 percent of AWP if the drug and biological is considered a new drug and biological (i.e., approved for marketing by the Food and Drug Administration within 12 months of implementation as a benefit of Texas Medicaid)
HHSC reserves the option to use other data sources to determine Medicaid fees for drugs and biologicals when AWP or ASP calculations are determined to be unreasonable or insufficient.
Prescriptions are covered under the Texas Medicaid Vendor Drug Program (VDP). The reimbursement methodology for pharmacy services is located at 1 TAC §§355.8541–355.8551.

Texas Medicaid & Healthcare Partnership
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