Appendix B: Vendor Drug Program


B.1Vendor Drug Program Information

B.1.1Pharmacy Benefit

The Texas Vendor Drug Program (VDP) provides statewide access to prescription drugs as prescribed by treating physician or other healthcare provider for clients eligible for:

Medicaid (fee-for-service and managed care).

Children’s Health Insurance Program (CHIP).

Children with Special Health Care Needs (CSHCN) Services Program.

Healthy Texas Women (HTW) Program.

Kidney Health Care (KHC) Program.

VDP manages the Medicaid and CHIP drug formularies and Medicaid preferred drug list.

Note:Pharmacy services rendered to Medicaid managed care clients are administered by a person’s managed care organization (MCO).

Refer to:  The Medicaid Managed Care Handbook (Vol. 2, Provider Handbooks) for additional infor­mation about managed care prescription drug and pharmacy benefits.

B.1.2Pharmacy Enrollment

VDP enrolls any eligible, in-state pharmacy licensed as Class A or C by the Texas State Board of Pharmacy.

 Any out-of-state pharmacy or pharmacy holding any other class of pharmacy license are considered for inclusion in the program on a case-by-case basis, relative to the benefits made available to the person eligible for pharmacy benefits. Enrollment is not granted unless additional benefits to the recipient are established.

Pharmacy providers must be enrolled with VDP prior to providing outpatient prescription services and prior to participating in any Medicaid managed care network as a pharmacy provider. To participate in the Medicaid or CHIP managed care networks the pharmacy must contact the individual managed care organization.

Pharmacy providers that have enrolled with VDP should refer to the Texas Pharmacy Provider Procedure Manual for policies and procedures pertaining to fee-for-service outpatient pharmacy claims, including drug benefit guidance, pharmacy prior authorization, coordination of benefits, and drug pricing and reimbursement.  

Refer to:  The Texas Pharmacy Provider Procedure Manual on the VDP website.

B.1.3Program Contact Information

Vendor Drug Program

Telephone Number

Pharmacy Benefits Access: for questions about outpatient drug and billing (the 800 number is for pharmacy use only and can be used to reach any area within VDP).


Pharmacy enrollment


Program management


Program Policy


Drug formulary (Texas listing of national drug codes)


Texas Pharmacy Prior Authorization Center Hotline


Texas Pharmacy Third Party Call Center


B.2Drug Information

The VDP formulary includes legend and over-the-counter drugs. In addition certain supplies and select vitamin and mineral products are also available as a pharmacy benefit. Some drugs are subject to one or both types of prior authorization, clinical and non-preferred. VDP does not reimburse claims for nutri­tional products (enteral or parenteral), medical supplies, or equipment other than a limited set of home health supplies.

The Preferred Drug List (PDL) is arranged by drug therapeutic class, and contains a subset of many, but not all, drugs that are on the Medicaid formulary. Most drugs are identified as preferred or non-preferred. Drugs listed on the PDL as preferred or not listed at all are available to individuals without prior authorization unless there is a clinical prior authorization associated with that drug. For more information about prior authorization, refer to section B.4, below.

B.2.1Formulary Search

The VDP Formulary Search is an online tool available to health-care providers to help people get access to medications.

Users search by either brand or generic name of the drug or product, the 11-digit national drug code (NDC), the PDL drug class, or type of home health supply. Detailed filters allow searches for drugs that require either clinical and/or non-preferred prior authorization, drugs used for family planning or are diabetic supplies, or have 90 percent refill utilization. Users can also search program-specific formularies for CHIP, the CSHCN Services Program, HTW Program, or KHC Program.

Refer to:  The Formulary Search on the VDP website for more information.

Providers are also eligible to register for Epocrates (, which is a free drug information service that can be downloaded to a mobile device. In addition to listing a drug’s preferred status, Epocrates includes drug monographs, dosing information, and warnings.

B.2.2Vitamin and Mineral Products

Pharmacies enrolled with VDP can dispense vitamin and mineral products to clients who are enrolled in Medicaid fee-for-service and are 20 years of age and younger. These products are also available to clients who are enrolled in Medicaid managed care, but the dispensing pharmacy is required to be contracted by the patent’s MCO.

To expedite pharmacy claim processing for vitamin and mineral and products, prescribing providers are encouraged to include the diagnosis on the prescription.

The list of products that can be dispensed at a pharmacy and information about the provision of these products people enrolled in fee-for-service can be found in the VDP Pharmacy Provider Procedure Manual on the VDP page of the HHS website.

B.2.3Home Health Supplies

Pharmacies enrolled with VDP can dispense a limited set of home health supplies that are commonly found in a pharmacy to fee-for-service Medicaid clients. These supplies are also available to clients who are enrolled in Medicaid managed care, but the dispensing pharmacy is required to be contracted by the patent’s MCO.

The list of supplies that can be dispensed at a pharmacy and information about the provisions of these supplies for people enrolled in fee-for-service can be found in the VDP Pharmacy Provider Procedure Manual on the VDP page of the HHS website.

Providers should contact the appropriate MCO or pharmacy benefit manager for more information about providing these supplies to Medicaid clients who are enrolled in a Medicaid managed care plan.

B.2.4Long-Acting Reversible Contraception Products

Long-acting reversible contraception (LARC) products are available for patients either through the Medicaid pharmacy or medical benefit.

Refer to:  The list of long-acting reversible contraception products on the VDP website.

B.2.4.1Pharmacy Benefit

Providers can prescribe and obtain long-acting reversible contraception (LARC) products that are on the Medicaid and Healthy Texas Women (HTW) Program drug formularies from certain specialty pharmacies and for women participating in either Medicaid or the HTW Program. The pharmacy method for obtaining LARCs does not require upfront purchase of the LARC, and providers only bill for the administration of the device upon its administration.

Providers can submit a completed and signed prescription request form, and the specialty pharmacy will dispense the LARC product (shipped to the practice address, care of the client) and bill either Medicaid or the HTW Program. Providers who prescribe and obtain LARC products through certain specialty pharmacies will be able to return unused and unopened LARC products.

B.2.4.2Medical Benefit

Providers may obtain LARC products through the existing buy and bill process, which requires providers to purchase LARCs from wholesalers or other sources before obtaining reimbursement upon insertion of the device, and opting to receive reimbursement for LARC products as a clinician-adminis­tered drug.

B.2.4.3Product Returns and Abandoned Units

Manufacturers offer abandoned unit return programs that allow a provider to return an abandoned LARC product. An “abandoned unit” is an unused and unopened product that was shipped by a partic­ipating specialty pharmacy with a prescription label that includes the name of the patient. In order to be returnable, the LARC product should be in its original packaging.


B.2.5.1Pharmacy Benefit

Makena (hydroxyprogesterone caproate injection) requires clinical prior authorization for clients who are enrolled in Medicaid fee-for-service. Providers should complete the Makena Prior Authorization Request Form and submit to the Texas Prior Authorization Call Center.

MCOs may elect to require the same clinical prior authorization for Makena. Providers should refer to the appropriate health plan for specific requirements and forms.

B.2.5.2Medical Benefit

Makena and the compounded version of 17P are available as a Medicaid medical benefit. For additional information about the medical benefit, providers can visit the TMHP website at or call the TMHP Contact Center at 1-800-925-9126.

B.3Prescribing Information

B.3.1Tamper-Resistant Prescription Pads

Providers are required by federal law (Public Law 110-28) to use a tamper-resistant prescription pad when writing a prescription for any drug for Medicaid clients. Pharmacies are required to ensure that all written Medicaid prescriptions submitted for payment to the VDP were written on a compliant tamper resistant pad.

The Centers for Medicare & Medicaid Services (CMS) has stated that special copy-resistant paper is not a requirement for electronic medical records (EMRs) or e-prescribing-generated prescriptions and prescriptions that are faxed directly to the pharmacy. These prescriptions may be printed on plain paper and will be fully compliant if they contain at least one feature from each of the following three categories:

Prevents unauthorized copying of completed or blank prescription forms

Prevents erasure or modification of information written on the prescription form

Prevents the use of counterfeit prescription forms

Two features that can be incorporated into computer-generated prescriptions printed on plain paper to prevent passing a copied prescription as an original prescription are as follows:

Use a very small font that is readable when viewed at 5x magnification or greater and illegible when copied.

Use a “void” pantograph accompanied by a reverse “Rx,” which causes a word such as “Void” to appear when the prescription is photocopied.

Refer to:  The Texas Pharmacy Provider Procedure Manual on the VDP website.

B.3.2Dispensing Life

Medicaid prescriptions for non-controlled substances are valid for one year from the date written and up to 11 refills if authorized by prescriber.

Medicaid prescriptions for controlled substances in drug classes C3-C5 are valid for six months from the date written and up to five refills if authorized by prescriber provider. Controlled substance prescrip­tions written by advanced practice registered nurses and physicians assistants are valid for 90 days.

Medicaid prescriptions controlled substances in C2 drug class have no refills and must be dispensed within 21 days of the date on which the prescription was written.

C2 prescriptions may be written as multiples of three for a total of a 90 day supply subject to federal and state law.

Refer to:  The Texas Pharmacy Provider Procedure Manual on the VDP website.

Pharmacy Laws & Rules page of the Texas State Board of Pharmacy (TSBP) website for rules about issuance of identical sets of C2 prescriptions.

B.3.3Prescription Monitoring of Schedule II Through Controlled Substances (CII) through Schedule V Drugs

The Texas Prescription Monitoring Program (PMP) collects and monitors prescription data for all Schedule II, III, IV and V controlled substances dispensed by a pharmacy in Texas or to a Texas resident from a pharmacy located in another state. The PMP also provides a venue for monitoring patient prescription history for practitioners and the ordering of Schedule II Texas Official Prescription Forms.

Pharmacies that dispense Schedule II, III, IV, and V are required to report the information directly to the Texas State Board of Pharmacy’s contracted vendor. Prescription data is reported by the prescriber’s Federal (DEA) number. Prescribers and pharmacies are required by statute to have a current Federal (DEA) registration in order to possess, administer, prescribe or dispense controlled substances.

Refer to:  The Texas Prescription Monitoring Program page of TSBP website.

B.3.4Requirements for Early Refills

A refill is considered too soon, or early, if the person has not used at least 75 percent of the previous fill of the medication.

For people enrolled in Medicaid fee-for-service or the CSHCN Services Program, a refill for certain controlled substances is considered too soon if the person has not used at least 90 percent of the previous fill of the medication.

Note:Some drugs, such as attention deficit hyperactivity disorder drugs and certain seizure medica­tions, are excluded from this change.

To identify drugs that require 90 percent utilization, refer to the VDP Formulary Search and select the “90% Utilization” filter. The returned results will include only those drugs that meet this requirement.

Refer to:  The Formulary Search on the VDP website for more information.

Justifications for early refills include, but are not limited to, the following:

A verifiable dosage increase

An anticipated prolonged absence from the state

If a person requests an early refill of a drug, the pharmacy must contact VDP to request an override of the early refill restriction. Prescribing providers may be asked to verify the reason for the early refill by the dispensing pharmacy or VDP staff.

Note:Note: Providers who are members of Medicaid managed care plans should contact the appro­priate MCO or Pharmacy Benefit Manager for specific requirements and processes related to dispensing early refills.

B.3.5Clinician-Administered Drugs

All Texas Medicaid providers must submit a rebate-eligible NDC for professional or outpatient claims submitted to TMHP with a clinician-administered drug procedure code.

The NDC is an 11-digit number on the package or container from which the medication is administered. Providers must enter identifier N4 before the NDC code. The NDC unit and the NDC unit of measure must be entered on all professional or outpatient claims that are submitted to TMHP and Medicaid managed care plans.

A list of drugs that require an NDC for Texas Medicaid reimbursement is available on the TMHP website at under the Topics section. Clinician-administered drugs that do not have a rebate-eligible NDC will not be reimbursed by Texas Medicaid.

Refer to:  Subsection 6.3.4, “National Drug Code (NDC)” in “Section 6: Claims Filing” (Vol. 1, General Information) for additional information on claim filing using NDC.

B.3.5.1Pharmacy Delivery Method for Clinician-Administered Drugs

Providers administering clinician-administered drugs in an outpatient setting for Medicaid fee-for-service and Medicaid MCO clients can send a prescription to a pharmacy and wait for the drug to be shipped or mailed to their office. This delivery method is called “white-bagging.”

Providers should use the following steps for this delivery method:

1)The treating provider identifies a Medicaid-enrolled client.

2)The treating provider or treating provider’s agent sends a prescription to a Texas Medicaid-enrolled pharmacy and obtains any necessary prior authorizations.

3)If any prior authorization is approved, the dispensing pharmacy fills the prescription and overnight ships an individual dose of the medication, in the name of the Medicaid client, directly to the treating provider.

4)The treating provider administers the medication to the Medicaid client in the office setting. The provider bills for an administration fee and any medically necessary service provided at time of administration. The provider should not bill Medicaid for the drug.

The pharmacy contacts the provider each month, prior to dispensing any refills, to ensure that the patient was administered all previously dispensed medication. Auto-refills are not allowed.

These medications cannot be used on any other patient and cannot be returned to the pharmacy for credit.

Exception:Unused long-acting reversible contraceptives may be returned in certain circumstances.

Note:Physicians who use this delivery method will not have to buy the clinician-administered drug, therefore, the physician is allowed to administer the drug and should only bill for the admin­istration of the drug.

B.4Patient Information

B.4.1Medicaid Drug Benefits

The Medicaid drug benefit for people enrolled in Medicaid fee-for-service is limited to three prescrip­tions per month with the following exceptions that have unlimited prescriptions:

Clients enrolled in waiver programs such as Community Living Assistance (CLASS) and Community-Based Alternatives (CBA)

Texas Health Steps (THSteps)-eligible clients (clients who are 20 years of age and younger)

Clients in skilled nursing facilities

The following categories of drugs do not count against the three prescription per month limit:

Family planning drugs and supplies

Smoking cessation drugs

Insulin syringes

Note:Prescriptions for family planning drugs and limited home health supplies are not subject to the three-prescription limit.

Though TMHP reimburses family planning agencies and physicians for family planning drugs and supplies, the following family planning drugs and supplies are also available through the VDP and are not subject to the three-prescription limit:

Oral contraceptives

Long-acting injectable contraceptives

Vaginal ring

Hormone patch

Certain drugs used to treat sexually transmitted diseases (STDs)

B.4.2Cost Avoidance Coordination of Benefits

Cost avoidance coordination of benefits for pharmacy claims ensures compliance with the CMS regula­tions. Under federal rules, Medicaid agencies must be the payer of last resort. The cost avoidance model checks for other known insurance at the point of sale, preventing Medicaid from paying a claim until the pharmacy attempts to obtain payment from the client’s third party insurance.

Refer to:  The Texas Pharmacy Provider Procedure Manual on the VDP website.

B.4.3Medicaid Children’s Services Comprehensive Care Program

Medically-necessary drugs and supplies that are not covered by the VDP may be available to children and adolescents (birth through 20 years of age) through the Medicaid Comprehensive Care Program (CCP). Drugs and supplies not covered could include, as examples, some over the counter drugs, nutri­tional products, diapers, and disposable or expendable medical supplies.

The Prior Authorization fax number is 1-512-514-4212.

Refer to:  Subsection, “Pharmacies (CCP)” in the Children’s Services Handbook (Vol. 2, Provider Handbooks) for more information about pharmacy enrollment in CCP.

B.4.4Pharmacy Lock-In

People enrolled in Medicaid fee-for-service can be “locked-in” to a specific pharmacy. Those people who are “locked-in” to a primary care pharmacy have “Lock-in” identified on the face of their Your Texas Benefits Medicaid card. Clients who are not “locked-in” to a specific pharmacy may obtain their drugs or supplies from any enrolled Medicaid provider of pharmaceutical services.

Refer to:  Subsection 4.4.2, “Client Lock-in Program” in “Section 4: Client Eligibility” (Vol. 1, General Information) for more information about lock-in limitations.

Family planning services are excluded from lock-in limitation.

B.4.5Free Delivery of Medicaid Prescriptions

Many Medicaid pharmacies offer free delivery of prescriptions to clients who are enrolled in Medicaid.

To find out which pharmacies offer delivery services:

Refer clients who are enrolled in Medicaid FFS to the VDP pharmacy Search. Click the “Delivers” indicator on the search. The returned results will include only those pharmacies that provide a delivery service to Medicaid clients. Contracted Medicaid pharmacy providers are reimbursed a delivery fee that is included in the medication dispensing fee formula. The delivery fee is paid to VDP-enrolled pharmacy providers that have certified its delivery services meet minimum condi­tions for payment of the delivery fee.

Refer clients enrolled in Medicaid managed care to the person’s MCO. Each MCO develops its own participating pharmacy network for the delivery service.

Deliveries are made to client’s home and not institutions, such as nursing homes. Delivery service is not applicable for mail-order prescriptions and not is available for over-the-counter drugs.

B.5Pharmacy Prior Authorization

Some Medicaid drugs are subject to one or both types of prior authorization, clinical and non-preferred.

B.5.1Clinical Prior Authorization

Clinical prior authorizations are based on evidence-based clinical criteria and nationally recognized peer-reviewed information. They may apply to an individual drug or a drug class on the formulary, including some preferred and non-preferred drugs. There are certain clinical prior authorizations that all Medicaid MCOs are required to perform. Usage of all other clinical prior authorizations will vary between MCO at the discretion of each MCO.

Refer to:  The Clinical PA Assistance Chart on the VDP website, which shows the clinical prior authorizations that each MCO uses and those used for Medicaid fee-for-service.

Subsection B.5.5, “Palivizumab (Synagis)” in this section for information about Synagis prior authorizations.

B.5.2Non-preferred Prior Authorization

The PDL is arranged by drug therapeutic class and contains a subset of many, but not all, drugs that are on the Medicaid formulary. Drugs are identified as preferred or non-preferred on the PDL. Drugs listed on the PDL as preferred, or those not listed at all, are available to individuals without PDL prior autho­rization. Drugs identified as non-preferred on the PDL require a PDL prior authorization.

Note:MCOs are required to adhere to the Texas Medicaid Preferred Drug List.

Note:CHIP does not have a PDL.

Refer to:  The PDL PA Criteria Guide on the PAXpress website, which explains the criteria that are used to evaluate the PDL prior authorization requests.

B.5.3Obtaining Prior Authorization

Prior authorization for people enrolled in Medicaid fee-for-service is requested through the Texas Prior Authorization Call Center.

The Texas Prior Authorization Call Center accepts PA requests by phone at 1-877-PA-TEXAS (1-877-728-3927) (Monday through Friday, between 7:30 a.m. and 6:30 p.m., central) or online through PAXpress. Online submissions are only available for non-preferred prior authorization requests.

Refer to:  The Account Registration Instructions on the PAXpress website.

The Texas Fee-For-Service Prior Authorization Program Quick Reference Guide for Prescribers on the PAXpress website.

Note:Pharmacists cannot obtain prior authorization for medications. If the client arrives at the pharmacy without prior authorization for a non-preferred drug and/or a drug requiring clinical prior authorization, the pharmacist will alert the provider’s office and ask the provider to get prior authorization.

B.5.472-Hour Emergency Supply

Federal and Texas law allows for a 72-hour emergency supply of a prescribed drug to be provided when a medication is needed without delay and prior authorization is not available. This rule applies to non-preferred drugs on the PDL and any drug that is affected by a clinical prior authorization.

Drugs not on the PDL may also be subject to clinical prior authorization.

Refer to:  The Texas Pharmacy Provider Procedure Manual on the VDP website.

B.5.5Palivizumab (Synagis)

Palivizumab is available to physicians for administering to people in Medicaid and the CSHCN Services Program through VDP. The enables physicians to have palivizumab shipped directly to their office from a network pharmacy, and not purchase the drug.

Physicians who obtain palivizumab through VDP may not submit claims to TMHP for the drug. The administering provider may submit a claim to TMHP for an injection administration fee and any medically necessary office-based evaluation and management service provided at time of injection.

B.5.5.1Participating Palivizumab Distribution Pharmacies

Refer to:  The Synagis page in the VDP section of the HHS website for more information about the current season’s schedule and a list of participating pharmacies.

Prior authorization request forms are updated every year. Providers must use the most current version of the forms to submit prior authorization requests. The year will be noted at the top of each form.

Note:Palivizumab is also be available to Children with Special Health Care Needs (CSHCN) Services Program clients. Providers can refer to the CSHCN Services Program Provider Manual for details.