Wisconsin Medicaid Pharmacy Covered Services and Reimbursement

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ARCHIVAL USE ONLY Refer to the Online Handbook

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6 Wisconsin Medicaid and BadgerCare � July 2001

Pharmacy ProvidersDetailed information about the responsibilitiesas a Medicaid-certified provider can be foundin the Provider Rights and Responsibilitiessection of the All-Provider Handbook. Refer tothat section for information about the following:

• Fair treatment of the recipient.• Recipient requests for noncovered

services.• Services rendered to a recipient during

periods of retroactive eligibility.• Grounds for provider sanctions.• Additional state and federal requirements.

Recipient Information

Medicaid Identification CardsWisconsin Medicaid recipients receive aMedicaid ID card upon initial enrollment intoWisconsin Medicaid.

Medicaid ID cards may be in any of thefollowing formats:

• Blue plastic Forward cards.• Green temporary paper cards.• Beige Presumptive Eligibility paper cards.

The Forward card is a plastic magnetic stripeidentification card that enables providers toverify eligibility.

When green temporary paper cards or beigepresumptive eligibility paper cards arepresented, providers should accept these cardsfor the dates on the cards that indicate whenthe recipient is eligible. Wisconsin Medicaidencourages providers to keep photocopies ofpaper cards.

Eligibility VerificationPossession of a Medicaid ID card does notguarantee eligibility. Wisconsin Medicaidproviders should always verify a recipient’seligibility before providing services, both todetermine eligibility for the current date and to

discover any limitations to the recipient’scoverage. Keep in mind when verifyingeligibility with the temporary card or thepresumptive eligibility card that eligibility maynot be on file right away; the informationshould be accessible within 7-10 days.

Refer to the Claims Submission section of thishandbook for information on eligibilityverification and the claims submission process.

Special RecipientPrograms

Wisconsin Medicaid Managed CareProgram CoverageWisconsin Medicaid fee-for-service deniesclaims submitted for services covered by arecipient’s Medicaid-contracted managed careprogram.

Refer to the Wisconsin Medicaid ManagedCare Guide’s provider section for additionalinformation regarding managed care programnoncovered services, emergency services, andhospitalizations.

Recipient Lock-In ProgramIf Wisconsin Medicaid determines that arecipient is abusing use of the Medicaid IDcard or benefits, Wisconsin Medicaid mayrestrict the recipient’s access to services byassigning the recipient to the Recipient Lock-InProgram.

Wisconsin Medicaid only reimbursesdesignated health care providers in lock-insituations; it may reimburse other providers ifthe services were provided during anemergency or with a referral from thedesignated health care provider. Refer to theRecipient Rights and Responsibilities section ofthe All-Provider Handbook for moreinformation about restricted benefit categoriesand other eligibility issues, such as lock-instatus.

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WWisconsin Medicaidproviders shouldalways verify arecipient’s eligibilitybefore providingservices, both todetermine eligibilityfor the current dateand to discover anylimitations to therecipient’s coverage.


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Pharmacy Handbook — Covered Services and Reimbursement Section � July 2001 7

Providers are required to notify the Division ofHealth Care Financing (DHCF) regardingsuspected cases of recipient misuse or abuseof Wisconsin Medicaid benefits. Notificationmay be made by telephoning or by writing to:

Division of Health Care FinancingBureau of Health Care Program IntegrityP.O. Box 309Madison, WI 53701-0309

Telephone: (800) 947-9627(608) 221-9883

Refer to the Drug Utilization Review andPharmaceutical Care section of this handbookfor further information on the Recipient Lock-In Program.

HospiceAs defined in HFS 101.03(75m), Wis. Admin.Code, a hospice is a licensed public agency, aprivate organization, or a subdivision of eitherthat primarily provides palliative care topersons experiencing the last stages of terminalillness and that provides supportive care for thefamily and other individuals caring for theterminally ill persons.

Hospice recipients usually receive care fromone hospice and one physician. Theirprescriptions may be filled at any Medicaid-certified pharmacy.

Hospices are required to pay for medicationsdirectly related to the terminal illness, such asnarcotics for pain management. Pharmaciesshould bill these medications directly to thehospice. Medications not directly related to theterminal illness (such as blood pressuremedications) should be billed as you would billother drugs to Wisconsin Medicaid. Refer tothe Claims Submission section of this handbookfor more information on claims submissionprocesses.

SpenddownOccasionally an individual with significantmedical bills meets all Wisconsin Medicaidrequirements except those pertaining toincome. These individuals are required to“spenddown” their income to meet WisconsinMedicaid’s financial requirements.

The certifying agency calculates theindividual’s Medicaid spenddown (ordeductible) amount, tracks all medical coststhe individual incurs, and determines whenthe medical costs have satisfied thespenddown amount. (A medical service doesnot have to be paid by the individual to beconsidered as payment toward satisfying thespenddown amount.)

For more information on spenddown, refer tothe Recipient Rights and Responsibilitiessection of the All-Provider Handbook.

CopaymentsExcept as noted under “CopaymentExemptions,” recipients are responsible forpaying part of the costs involved in obtainingpharmacy services, DMS, and DME. Mostlegend and over-the-counter (OTC) drugs aresubject to a recipient copayment amount.Wisconsin Medicaid automatically deductsapplicable copayment amounts from Medicaidpayments. Pharmacies should not reduce thebilled amount of a claim by the amount ofrecipient copayments or record any dollaramount in the “Patient Paid” field for real-timeclaims submission.

The Medicaid copayment amount for legenddrugs is $1.00 for each new or refilledprescription, up to a maximum copaymentamount of $5.00 per recipient, per provider,per calendar month. The Medicaidcopayment amount for OTC drugs (excludingiron supplements for pregnant or lactatingwomen) is $0.50 for each new or refilledprescription.

General Inform

ationWWisconsin Medicaidautomaticallydeducts applicablecopaymentamounts fromMedicaidpayments.


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For OTC drugs, DMS, and DME, there is nolimitation on the total amount of copayment arecipient may be required to pay in a calendarmonth.

For DME and DMS, including enteral nutritionproducts, Wisconsin Medicaid basescopayments for each procedure code on itsmaximum allowable fee. The copaymentamount for urine and blood glucose test stripsremains $0.50.

Copayment ExemptionsCopayment exemptions include the following:

• Emergency services.• Family planning services and related

supplies.• Services provided to nursing facility

residents.• Services provided to recipients under 18

years of age.• Services provided to pregnant women if

the services are pregnancy-related.• Services provided to enrollees of a

Medicaid HMO or special managed careprogram.

• Pharmaceutical Care dispensing fee.

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All providers who perform services thatrequire recipient copayment must make areasonable attempt to collect that copaymentfrom the recipient. However, providers maynot deny services to a recipient for failing tomake a copayment.

Copayments: Prescriptions, DisposableMedical Supplies, and Durable MedicalEquipment

Prescriptions• Over-the-counter drugs, each

prescription (no monthly limit): $0.50• All legend drugs, each new and

refilled prescription: $1.00

Legend drugs, no more than $5.00 permonth, per recipient, at each pharmacy.

Disposable Medical Supplies and DurableMedical Equipment• Based on maximum allowable fees:

√ Up to $10.00 $0.50√ From $10.01 to $25.00 $1.00√ From $25.01 to $50.00 $2.00√ Over $50.00 $3.00

• Urine or blood test strips (per dateof service): $0.50

AAll providers whoperform servicesthat requirerecipient copaymentmust make areasonable attemptto collect thatcopayment from therecipient. However,providers may notdeny services to arecipient for failingto make acopayment.


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Wisconsin Medicaid covers most legend drugsand a limited number of over-the-counter(OTC) drugs.

Legend DrugsAs defined under HFS 101.03(94), Wis.Admin. Code, a legend drug is any drug thatrequires a prescription under federal code 21USC 353(b). Legend drugs are covered byWisconsin Medicaid when:

• The drug is approved by the Food andDrug Administration (FDA) and is not onthe Negative Formulary List.

• The manufacturer has signed the federalrebate agreement for the drug.

• The manufacturer has reported the druginformation to First DataBank.

Some drugs covered by Wisconsin Medicaidmay require prior authorization (PA), andothers require an appropriate diagnosis codefor reimbursement. Refer to Appendices 2 and3 of this section for lists of Wisconsin Medicaidcovered drugs, including PA and diagnosis-restricted drugs. Also refer to the PriorAuthorization section of this handbook formore information on PA.

Drug Rebate AgreementWisconsin Medicaid uses an open formularyfor legend drug products with few restrictions.According to the federal Omnibus BudgetReconciliation Act of 1990 (OBRA ’90),pharmaceutical manufacturers who choose toparticipate in state Medicaid programs mustsign an annual rebate agreement with thefederal Health Care Financing Administration(HCFA). Wisconsin Medicaid will cover onlythe legend drug products of manufacturers

who have signed this rebate agreement. Non-participating manufacturers have the option ofsigning a rebate agreement that is effective thefollowing quarter.

Manufacturer rebates are based on Medicaidclaims data showing the quantity of eachNational Drug Code (NDC) dispensed toMedicaid recipients. Manufacturers maydispute the payment of drug rebates becausethey believe the utilization data reported tothem is inaccurate. To resolve disputes,Wisconsin Medicaid verifies utilization data byhaving individual providers check the accuracyof claims information they submitted.

Refer to the Pharmacy Data Tables section ofthis handbook for a list of manufacturers withcurrent rebate agreements and a list ofnoncovered NDCs and the reasons thatmanufacturers will not pay rebates on theseNDCs.

Additional Coverage of LegendDrugsWisconsin Medicaid may cover certain legenddrugs through the paper PA process eventhough their manufacturers did not sign rebateagreements. Refer to the Prior Authorizationsection of this handbook for special instructionsto be followed when requesting PA for thesedrugs.

New National Drug CodesWisconsin Medicaid automatically adds anNDC of a new legend drug to the Medicaiddrug file if it meets Medicaid guidelines and isproduced by a manufacturer participating inthe drug rebate program.

CCovered Drugs and Services

Covered Drugs

and Services

WWisconsin Medicaidwill cover only thelegend drugproducts ofmanufacturers whohave signed anannual rebateagreement withthe federal HealthCare FinancingAdministration.


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Noncovered Legend DrugsNoncovered legend drugs include thefollowing:

• Rebate Refused: the manufacturer hasrefused to sign a rebate agreement withHCFA.

• Wisconsin Negative Formulary:Wisconsin Medicaid has determined thatthe drug has little therapeutic value, is notmedically necessary, or is not cost-effective.

• Negative Drug List: drugs listed includethe following:√ Less-than-effective (LTE) drugs as

defined by the FDA.√ Experimental or other drugs that

have no medically-acceptedindications.

Refer to Appendix 6 of this section for a full listof noncovered legend drugs.

Over-the-Counter DrugsWisconsin Medicaid covers the genericproducts of specific categories of OTC drugsfrom manufacturers who have signed rebateagreements with HCFA (as required byOBRA ’90). In addition, Wisconsin Medicaidcovers all brands of insulin, ophthalmiclubricants, and contraceptive products. AllOTC drugs require legal prescriptions in orderto be covered by Wisconsin Medicaid.

As per s. 49.46(2)(b)(6)(i), Wis. Stats.,Wisconsin Medicaid covers the followingclasses of OTC drugs:

• Aspirin, acetaminophen, and ibuprofen(however, combination products includingthose that contain caffeine or bufferingagents are not covered).

• Antacids.• Antibiotic ointments.• Contraceptive products.• Cough syrup with codeine.*• Cough syrup with dextromethorphan.*• Cough syrup, plain expectorant.*• Diphenhydramine.

• Hydrocortisone creams.• Insulin.• Iron supplements for pregnant women

(and for a 60-day period beyond the end ofpregnancy).

• Lice-control products.• Meclizine.• Ophthalmic lubricants.• Pseudoephedrine.• Therapeutic electrolyte replacement

solutions.• Topical antifungals.• Vaginal antifungals.

*Note: Wisconsin Medicaid limits coverage ofcough syrups to products that treatonly coughs and does not includemultiple ingredient cough/coldcombination products.

Refer to Appendix 2 of this section for moreinformation on Medicaid-covered andnoncovered OTC drugs. To request an additionof an NDC to the list of covered OTCs,complete Appendix 1 of this section.

Compound DrugsWisconsin Medicaid covers a particularcompound drug only when the compound drugprescription:

• Contains more than one ingredient.• Contains at least one Medicaid-covered

drug.• Does not contain any drug listed on the

Medicaid LTE Drug List, or any equivalentor similar drug.

• Does not result in drug combinations thatFDA considers LTE. For example, atopical compound drug is considered LTEif it combines any two of the following: asteroid, an antibiotic, or an antifungalagent.

Wisconsin Medicaid does not cover acompound drug prescription intended for atherapeutic use if the FDA does not approvethe therapeutic use of the combination.

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WWisconsin Medicaidcovers the genericproducts of specificcategories of over-the-counter drugsfrom manufacturerswho have signedrebate agreementswith HCFA.


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Clozapine ManagementClozapine (Clozaril) is an antipsychotic drugthat is indicated for the management ofseverely ill schizophrenic patients who fail torespond adequately to standard antipsychotictreatment. Food and Drug Administrationregulations require that clozapine be madeavailable only when there is a system in placeto monitor white blood cell counts.

Conditions For Coverage ofClozapine ManagementWisconsin Medicaid provides reimbursementfor clozapine management services if specificrequirements are met. Clozapine managementis a specialized care management service thatmay be required to ensure the safety ofrecipients who are using clozapine. WisconsinMedicaid may separately reimburse physiciansand pharmacies for clozapine managementservices when all of the conditions listed inAppendix 4 of this section are met.

Home InfusionHome intravenous (IV) injections and totalparenteral nutrition (TPN) solution, includinglipids, are covered and reimbursed ascompounds. Supplies and equipment, such asinfusion pumps associated with the IV, may beseparately reimbursable. Refer to the ClaimsSubmission section of this handbook for TPNclaims submission instructions. Also refer tothe Durable Medical Equipment Index and theDisposable Medical Supplies Index forlimitations and PA requirements for suppliesand equipment.

Covered Drugs

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HealthCheck “OtherServices”As a result of the Omnibus BudgetReconciliation Act of 1989 (OBRA ̀ 89),Wisconsin Medicaid considers requests forcoverage of medically necessary pharmacyservices that are not specifically listed ascovered services, or that are listed under“Noncovered Services” in the PharmaceuticalProcedures chapter of this section, when all ofthe following conditions are met:

• The recipient is under 21 years of age.• The provider verifies that a comprehensive

HealthCheck screening has beenperformed within the previous 365 days.

• The service is allowed under the SocialSecurity Act as a “medical service.”

• The service is medically necessary andreasonable to correct or improve acondition or defect.

• The service is noncovered under thecurrent Medicaid State Plan.

• A service covered by Wisconsin Medicaidis not appropriate to treat the identifiedcondition.

All requests for HealthCheck “OtherServices” require PA, except for those drugcategories listed under “Covered Drugs -Over-the-Counter Drugs (HealthCheck “OtherServices”)” in Appendix 2 of this section. Inaddition, the drug categories listed in theWisconsin Medicaid HealthCheck “OtherServices” Drug List are covered without PA ifthe pharmacy documents that the recipientreceived a comprehensive HealthCheckscreening within one year prior to the date onthe prescription.

Refer to the Pharmacy Data Tables section ofthis handbook for the HealthCheck “OtherServices” drug list. Also refer to the PriorAuthorization section for information onrequesting PA for HealthCheck “OtherServices.”

HHome intravenous(IV) injections andtotal parenteralnutrition (TPN)solution, includinglipids, are coveredand reimbursed ascompounds.


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Pharmaceutical

Procedures

PPharmaceutical ProceduresPrescribing ProvidersWisconsin Medicaid covers medicallynecessary legend drugs and certain over-the-counter (OTC) drugs identified in the MedicaidDrug File. Only certain licensed healthprofessionals may prescribe legend drugs andOTC drugs according to HFS 107.10(1), Wis.Admin. Code. The professional must beauthorized by Wisconsin Statutes or WisconsinAdministrative Code to prescribe legend and/orOTC drugs.

Prescribers may only prescribe items that arewithin their scope of practice. The followingcategories of licensed health professionals mayprescribe covered legend drugs and OTCdrugs:

• Dentist.• Doctor of Medicine.• Doctor of Osteopathy.• Advanced Practice Nurse Prescriber.• Optometrist.• Physician assistant.• Podiatrist.

Prescription RequirementsExcept as otherwise provided in federal orstate law, either the prescriber must write theprescription or the pharmacist must take theprescription verbally or electronically from theprescriber. The prescription must include thefollowing:

• The name, strength, and quantity of thedrug or item prescribed.

• The date of issue of the prescription.• The prescriber’s name and address.• The recipient’s name and address.• The prescriber’s signature (if the

prescriber writes the prescription).• The directions for use of the prescribed

drug or item.

If the pharmacist takes the prescriptionverbally from the prescriber, the pharmacistmust generate a hard copy. Medicaidprescription orders are valid for no more thanone year from the date of the prescription,except for controlled substances andprescriber-limited refills which are valid forperiods of less than one year.

“Brand Medically Necessary”Requirements For Innovator DrugsWisconsin Medicaid reimburses providers foran innovator drug at an amount greater thanthe Medicaid maximum allowed cost (MAC)only if the prescriber certifies that the innovatordrug is “medically necessary” for that recipientand documents the reason in the recipient’smedical record. An “innovator” drug is thebrand-name product of the patented drug onthe MAC List.

The phrase “brand medically necessary” mustappear in the prescriber’s own handwriting onthe face of each new prescription order. Itmust also appear on each new nursing facilityorder.

A typed certification, a signature stamp, or acertification handwritten by someone otherthan the prescriber does not satisfy therequirement. Blanket authorization for anindividual recipient, drug, or prescriber is notacceptable documentation.

For claims submission information on “brandmedically necessary” drugs, refer to theClaims Submission section of this handbook.

Informing Prescribers About “BrandMedically Necessary” RequirementsWhen a prescriber telephones a prescriptionorder to a pharmacy and indicates a medicalneed for the innovator drug, the pharmacymust inform the prescriber that a handwrittencertification is necessary to meet WisconsinMedicaid’s requirements. Pharmacy providers

TThe prescribermust write theprescription or thepharmacist musttake theprescriptionverbally orelectronically fromthe prescriber.


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must have this documentation available beforesubmitting claims to Wisconsin Medicaid. Theprescriber may fax the information to thepharmacy.

Retention and Maintenance ofPrescription RecordsProviders must retain hard copies ofprescription orders for five years from the dateof service, according to HFS 105.02(4) and105.02(7), Wis. Admin. Code, and s. 450.11(2),Wis. Stats. (statutory requirements for thePharmacy Examining Board). In addition,prescription orders transmitted electronicallymay be filed and preserved in electronicformat, per s. 961.38(2), Wis. Stats. If thepharmacist takes the prescription verbally fromthe prescriber, the pharmacist must generate ahard copy.

Maximum Days’ SupplyAccording to HFS 107.10(3)(e), Wis. Admin.Code, providers must dispense the followinglegend drugs in the quantity prescribed, up to a100-day supply:

• Digoxin, digitoxin, digitalis.• Hydrochlorothiazide and chlorothiazide.• Prenatal vitamins.• Fluoride.• Levothyroxine, liothyronine, thyroid

extract.• Phenobarbital.• Phenytoin.• Oral contraceptives.

Providers must dispense all other legend drugsin the quantity prescribed, not to exceed a 34-day supply. This policy includes refills.

Refill PolicyAccording to HFS 107.10(3), Wis. Admin.Code, Wisconsin Medicaid limits refills in thefollowing ways:

• Schedule II drug prescriptions may not berefilled.

• Schedule III, IV, and V drug prescriptionsare limited to the original dispensing plusfive refills, if authorized by the prescriber,or six months from the date on theprescription, whichever comes first.

• All non-scheduled legend drugs are limitedto the original dispensing plus 11 refills, ifauthorized by the prescriber, or 12 monthsfrom the date on the original prescription,whichever comes first.

Unused Medications ofNursing FacilityResidents

Return and Reuse of Medicationsby PharmaciesPhar 7.04, Wis. Admin. Code, specifies that ahealth care facility may return certain drugs,medicines, or personal hygiene items to thedispensing pharmacy if the medication is in itsoriginal container and the pharmacistdetermines that the contents are unadulteratedand uncontaminated. Under federal law,controlled substances may not be returned tothe pharmacy.

Pharmacy providers that accept returnedMedicaid-covered medications from nursingfacilities may assure facility and pharmacycompliance with these regulations by taking thefollowing steps:

• Verify that the nursing facility maintainscomplete records of all discontinuedmedications, whether or not they arereturned to the pharmacy.

• Verify that the pharmacy’s records ofreturned medications are properlymaintained.

• Establish criteria for pharmacy staff todetermine drugs acceptable for reuse bythe pharmacy.

• Identify and destroy medicationsunacceptable for reuse.

Pharmacies are required to refund Medicaidpayment to Wisconsin Medicaid for drugprescriptions that cost over $5 and are

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acceptable for reuse. Pharmacies may notaccept returned medications from nursingfacilities unless they credit all reusablemedications.

Refund For Returned, ReusableMedicationsA refund must be made on any item returnedthat is over $5 per prescription. WisconsinMedicaid allows a pharmacy to retain 20% ofthe net amount identified as the total cost ofreusable units of each drug returned to coverthe pharmacy’s administrative costs. WisconsinMedicaid does not consider dispensing feespart of the total cost and, therefore, thedispensing fees need not be returned.

For claims that were submitted real-time,providers may refund Wisconsin Medicaid byreversing the original claim within 90 days ofthe submission. A new claim with the adjustedquantity should then be submitted. After 90days, a paper adjustment must be used tochange the quantity on an allowed claim.(Refer to the Claims Submission section of thishandbook for the Adjustment Request Form.)

Pharmacies choosing not to reverse or adjustthe original claim must refund WisconsinMedicaid by check. If this option is chosen, thepharmacy must remit a check to WisconsinMedicaid for funds representing these reusabledrugs no more than once per month or no lessthan once every three months. Providersremitting a check for returned, reusablemedications must maintain a record of thetransaction.

Make checks payable to “Department ofHealth and Family Services.” Write “ReturnedDrugs” on the check. Also, please include yourprovider number and the dates(MM/DD/YYYY) referenced by the check.Send checks to:

Wisconsin MedicaidCash Unit6406 Bridge Rd.Madison, WI 53784-0004

Destruction of Medications byNursing FacilitiesUnless otherwise ordered by a physician, thenursing facility must destroy a recipient’smedication not returned to the pharmacy forcredit within 72 hours of the followingcircumstances:

• A physician’s order discontinuing themedication’s use.

• The recipient’s discharge from the nursingfacility.

• The recipient’s death.• The medication’s expiration date.

A nursing facility may not retain a recipient’smedication for more than 30 days unless theprescriber orders in writing, every 30 days, thatthe facility must retain the medication. HFS132.65(6)(c), Wis. Admin. Code, defines theprocedural and record keeping requirementsthat nursing facilities must follow for recipients’unused medications.

Repackaging and RelabelingMedications For RecipientsPharmacy providers dispensing medicationsusing recipient “compliance aid” packaging(e.g., Pill Minder, blister packaging) mustrelabel unused quantities when the drugregimen is changed. Providers must notdiscard unused medications that the recipientstill needs. Relabeling and repackaging ofmedication for reuse by the patient is permittedthrough Phar 7.04, Wis. Admin. Code.

Noncovered ServicesUnder HFS 107.10(4), Wis. Admin. Code,Wisconsin Medicaid does not cover thefollowing pharmacy services and items:

• Claims from pharmacy providers forreimbursement for drugs, disposablemedical supplies (DMS), and durablemedical equipment (DME) included in thenursing facility daily rate for nursing facilityrecipients. (Refer to the DME and DMSIndices for a list of DMS and DMEincluded in the nursing facility daily rate.)

Pharmaceutical

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AA refund must bemade on any itemreturned that isover $5 perprescription.


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• Refills of schedule II drugs. (Partial fillsare acceptable if they comply with Boardof Pharmacy regulations.)

• Refills beyond those described under“Refill Policy” of this chapter.

• Personal care items.• Cosmetics.• Common medicine chest items such as

antiseptics and Band-AidsTM.• Personal hygiene items.• “Patent” medicines.• Uneconomically small package sizes.• Items that are in the inventory of a nursing

facility.• Drugs produced by manufacturers who

have not signed a rebate agreement.*• A drug service for a specific recipient for

which prior authorization has beenrequested and denied.

• Drugs included in the Wisconsin NegativeFormulary.

• Drugs identified by the Health CareFinancing Administration as less-than-effective (LTE), or identical, related, orsimilar.

• Brand-name OTC analgesics, antacids,cough syrups, and iron supplements.

*Note: See the Prior Authorization section ofthis handbook for exceptions to therebate agreement requirement.

Unacceptable PracticesBased on the claims submission requirementsin HFS 106.03(3), Wis. Admin. Code, and thedefinition of covered services in HFS 107.10,Wis. Admin. Code, the following are examplesof unacceptable and, in some cases, fraudulentpractices:

• Billing Wisconsin Medicaid for a quantityof a legend drug that is greater than thequantity prescribed.

• Billing Wisconsin Medicaid for a higher-priced drug when a lower-priced drug wasprescribed and dispensed to the recipient.

• Dispensing a brand-name drug, billing forthe generic, and then charging the recipientfor the difference.

• Billing for a drug quantity greater than thequantity dispensed to the recipient(prescription shorting).

• Charging a drug price greater than theprice usually charged to the general public.

• Billing for a legend or OTC drug without aprescription.

• Submitting a claim with a National DrugCode (NDC) other than the NDC on thepackage from which the drug wasdispensed.

• Providing unit-dose carts and recipientdrug regimen review without charge.Lease arrangements for carts and otherservices must reflect fair market value.

• Dispensing a smaller quantity than wasprescribed in order to collect more thanone professional dispensing fee(prescription splitting).

• Dispensing and billing a medication oflesser strength than prescribed to obtainmore than one dispensing fee.

• Billing more than once per month formaintenance drugs for nursing facilityrecipients. A maintenance drug is a drugordered on a regular, ongoing, scheduledbasis. This limitation does not apply totreatment medications (e.g., topicalpreparations) or drugs ordered with a stopdate of less than 30 days.

Wisconsin Medicaid may suspend or terminatea provider’s Medicaid certification forviolations of these or other restrictions thatconstitute fraud or billing abuses. Refer to HFS106.06 and 106.08, Wis. Admin. Code, forinformation on provider sanctions.

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WWisconsin Medicaidmay suspend orterminate aprovider’s Medicaidcertification forviolations of theseor other restrictionsthat constitute fraudor billing abuses.


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RReimbursementThe Department of Health and FamilyServices (DHFS) determines maximumreimbursement rates for all covered over-the-counter (OTC) and legend pharmaceuticalitems. Maximum reimbursement rates may beadjusted to reflect market rates,reimbursement limits, or limits on theavailability of federal funding as specified infederal law (42 CFR 447.331).

Providers are required to charge WisconsinMedicaid their usual and customary charge,meaning the provider’s charge for providingthe same service to a private-pay patient.

Ingredient CostReimbursement

Legend DrugsSome covered legend drugs are reimbursed ateither the drug’s Average Wholesale Price(AWP) minus 10% plus a dispensing fee, orthe provider’s usual and customary charge,whichever is less. Other legend drugs arereimbursed at either the drug’s price on theMedicaid Maximum Allowed Cost (MAC) Listplus a dispensing fee or the provider’s usualand customary charge, whichever is less.

Refer to the Pharmacy Data Tables section ofthis handbook for the Legend Drug MAC Listand the OTC Drug MAC List.

Wisconsin Medicaid reimburses providers foran innovator drug at the same rate that itreimburses for the generic equivalent of thedrug if it is on the MAC List, unless the “BrandMedically Necessary” prescriptionrequirements are met. This policy is requiredby HFS 107.10, Wis. Admin. Code, and by theOmnibus Budget Reconciliation Act of 1990(OBRA ̀ 90) revisions to Title XIX of theSocial Security Act.

Over-the-Counter DrugsThe estimated acquisition cost for coveredOTC drugs is determined by applying a 10%discount to the AWP as listed by FirstDataBank, except for MAC drugs.

Refer to the Covered Drugs chapter andAppendix 5 of this section for information onMedicaid coverage of OTC drugs. To requestan addition of National Drug Codes for unlistedOTCs, complete Appendix 1 of this section.

Dispensing FeeReimbursementWisconsin Medicaid reimburses differentdispensing fees depending on the serviceprovided. These fees include the following:

• Traditional dispensing fee.• Unit dose dispensing fee.• Repackaging allowance with either a

traditional or unit dose dispensing fee.• Compound drug dispensing fee.• Pharmaceutical Care (PC) dispensing fee.

Refer to Appendix 7 of this section for thepharmacy dispensing fee schedule.

Traditional Dispensing FeeA traditional dispensing fee is usually paid onceper recipient, per service, per month, perprovider, dependent on the physician’sprescription. Refer to the PharmaceuticalProcedures chapter of this section for a list ofunacceptable practices.

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PProviders arerequired to chargeWisconsin Medicaidtheir usual andcustomary charge,meaning theprovider’s chargefor providing thesame service to aprivate-pay patient.


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Unit Dose Dispensing FeeWisconsin Medicaid reimburses providers aunit dose dispensing fee when a qualified unitdose dispensing system is used. The drugs maybe packaged into unit doses by themanufacturer or by the provider. As per HFS132.65(7), Wis. Admin. Code, a qualified unitdose dispensing system must:

• Contain not more than one dose, althoughthe dose may consist of two capsules ifordered by the physician. Most topicalproducts and oral liquids do not meet therequirement of unit dose packaging.

• Be sealed and labeled with the drug name,strength, lot or control number, andexpiration date, when applicable.

• Be delivered in a quantity consisting of nomore than a 96-hour supply of medicationdelivered at any one time.

Multiple dose “blister packs” or “punch cards”are not unit dose packaging and, therefore, arenot reimbursable for unit dose dispensing.

Dispensing Fee Limitation for Unit DoseThe unit dose dispensing fee is limited to onedispensing fee per calendar month, per legenddrug, per recipient. Reimbursement is limited toonly those pharmaceuticals actually used bythe recipient.

Repackaging AllowanceWisconsin Medicaid may pay a repackagingallowance with either a traditional dispensingfee or a unit dose dispensing fee. WisconsinMedicaid reimburses providers an additionalamount per unit (repackaging allowance) in thefollowing two situations:

Situation One: When the provider repackagesa drug into unit dose packages. Drugspackaged by a manufacturer do not qualify forthe repackaging allowance.

Situation Two: When the provider repackagesa drug into a compliance aid system such as“punch cards,” “pill minders,” or “pill boxes.”Wisconsin Medicaid pays the additional amountonly for package systems that meet all federaland state requirements for the packaging,labeling, and dispensing of drugs.

Compound Drug Dispensing FeeWisconsin Medicaid reimburses providers forthe pharmacist’s compounding time.Compounding time is indicated in the level ofservice field. Refer to the Claims Submissionsection of this handbook for detailedinformation on billing for the compound drugdispensing fee.

Pharmaceutical Care DispensingFeeProviders may receive an enhanced PCdispensing fee if they perform certainadditional, documented services. Theseservices must go beyond the basic activitiesrequired by federal and state standards forrecordkeeping, profiles, prospective DrugUtilization Review, and counseling whendispensing and must result in a positiveoutcome for both the recipient and forWisconsin Medicaid. Examples of theseservices include increasing patient complianceor preventing potential adverse drug reactions.

Reimbursement is based on the following:

• The reason for intervention.• The action taken by the pharmacist.• The result of that action.• The time spent by the pharmacist

performing the activity (exclusive of thedocumentation time).

Please refer to the Drug Utilization Reviewand Pharmaceutical Care section of thishandbook for more information on PC and thePC dispensing fee.

Reim

burs

emen

t

WWisconsin Medicaidmay pay arepackagingallowance witheither a traditionaldispensing fee or aunit dose dispensingfee.


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AAppendix

Appendix


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Appendix 1Wisconsin Medicaid Drug Addition/Correction Request Form

(for photocopying)

Appendix

See reverse side of this page for the Wisconsin Medicaid Drug Addition/Correction Request Form.

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This form may be used to request the addition of National Drug Code (NDC) billing codes for unlisted over-the-counter(OTC) drugs. Providers may use this form to notify Wisconsin Medicaid of pricing errors contained in the drug index.Pharmacies must send/fax a copy of an invoice to substantiate any price change in the Maximum Allowed Cost (MAC)list. New NDCs are automatically added to the Wisconsin Medicaid drug file subject to Wisconsin Medicaid limitations if themanufacturer has signed a drug rebate agreement with the Health Care Financing Administration. This form is to be used byWisconsin Medicaid-certified providers only.

MAIL TO: Drug Price File FAX NUMBER: (608) 267-3380Division of Health Care FinancingP.O. Box 309Madison, WI 53701-0309

Provider Name: Prov ID No:

Street/Mail Address: Tel No.:

City, State, ZIP: Contact Person:

NEW DRUG ADDITIONS

A — Added to Index as Requested; B — Already in Index; C — Less-Than-Effective (LTE) Drug (non-covered);D — Not Eligible for Coverage

PRICE UPDATE/CORRECTION

Describe reason for drug price update request (e.g., no generic available at MAC price, manufacturer price increase whichis not reflected on Wisconsin Medicaid price file).

Code(Internal

Use Only) NDC (11-digit number) Drug NamePkgSize

AWP(Avg.Wholesale

Price)DispDate

Rx/OTC?

Code(Internal

Use Only) NDC (11-digit number) Drug NamePkgSize

CurrentlyAllowed

CorrectPrice

EffDate

Attach a copy of the invoice to verify any requests for price change.

Wisconsin Medicaid Drug Addition/Correction Request Form


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Appendix

Appendix 2Wisconsin Medicaid Covered Drugs

Covered Drugs — Over-the-Counter DrugsGeneral over-the-counter (OTC) categories are:

• Analgesics — Oral/Rectal.1

• Antacids.• Antibiotic Ointments.• Antifungals-Topical.• Antifungals-Vaginal.• Bismuth Subsalicylate.• Capsaicin.

• Contraceptive Supplies.• Cough Syrups.2• Diphenhydramine.• Ferrous Gluconate/

Sulfate for pregnantwomen (and for a 60-day period beyond theend of the pregnancy).

• HydrocortisoneProducts — Topical.

• Insulin.• Lice Control Products.• Meclizine.• Ophthalmic Lubricants.

• Pinworm TreatmentProducts.

• Pseudoephedrine.• Pyridoxine Tablets.• Therapeutic Oral

Electrolyte ReplacementSolutions.

Note: Coverage is limited to generic drugs for most covered OTC drugs [excluding the OTC product categories of insulin,ophthalmic lubricants, and contraceptive supplies]. Some products in these categories are not covered because themanufacturer did not sign a rebate agreement. Examples of noncovered brand name products include Advil, Ascriptin,Clear Tears, Ecotrin, Lyteers, Maalox, Mylanta, Neo Tears, Riopan, Robitussin, Rolaids, Titralac, and Tylenol.

Wisconsin Medicaid uses an open formulary for legend drugs with few restrictions. Restrictions include drugs whichrequire prior authorization (PA), diagnosis-restricted drugs, noncovered manufacturer drugs, less-than-effective (LTE)drugs, and negative formulary drugs.

Covered Drugs — Legend Drugs

1 Limited to single entity aspirin, acetaminophen, ibuprofen products only. These analgesics are in the daily rate for nursing facility recipients.

2 Covered “cough syrups” are limited to products for treatment of coughs only. Covered products include those containing a single component(terpin hydrate or guaifenesin), a single cough suppressant (codeine or dextromethorphan), or a combination of an expectorant and cough suppressant.Multiple ingredient cough/cold combination products are noncovered.

Covered Non-Rebated Drugs — Prior Authorization RequiredThese drugs require PA because the manufacturer did not sign a rebate agreement. Prescribers are requested to providea statement regarding the nature of the medical need for these specific brand drugs, as well as a statement which assertsthat failure to cover the drug will result in costs to Wisconsin Medicaid which exceed the cost of the drug. This list maychange if the manufacturer signs a rebate agreement. Generic equivalents of these drugs are not included in thisrequirement and may be billed without PA if the generic manufacturer has signed a rebate agreement.

• Dalmane.• Libritabs.

• Librium.• Melanex.

• Menrium.• Quarzan.

• Rimso 50.• Valium.

Covered Drugs — Over-the-Counter Drugs (HealthCheck “Other Services”)Effective with dates of service beginning January 1, 1994, the following drug categories are covered through HealthCheck“Other Services” without PA but with verification that a comprehensive HealthCheck screen occurred within the last 365days. HealthCheck is a preventive health care program for children under the age of 21. Refer to the HealthCheck “OtherServices” Drug List in the Pharmacy Data Tables section of this handbook for a full list of covered drugs.• Anti-Diarrheals.• Iron Supplements.

• Lactase Products.• Laxatives.

• Multivitamins. • Topical Protectants.


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Appendix 2continued

Covered Rebated Drugs — Diagnosis-Restricted DrugsReimbursement for these drugs and drug categories is restricted by a valid diagnosis code. See Appendix 3 of thissection for a list of acceptable diagnosis codes for each drug. These drugs require PA when prescribed for a diagnosisoutside the approved diagnosis ranges. Submit paper PA requests for diagnosis-restricted drugs when prescribed for adiagnosis outside the approved diagnosis ranges. Prior authorization for proton-pump inhibitors outside the approveddiagnosis may be obtained through STAT-PA or paper PA requests*.

• Alglucerase.• Anti-H. Pylori Treatment.• Cerezyme.• Colony Stimulating

Factors.

• Epoetin Alfa.• Interferon Alpha (all

groups).• Interferon Beta 1a

(Avonex).

• Interferon Beta 1b(Betaseron).

• Legend SmokingCessation Products(OTC products notcovered).

• Mupirocin.• Muromonab and other

monclonal antibodies.• Prenatal vitamins.• Proton-pump

inhibitors.

Covered Rebated Drug Categories — Prior Authorization Required

These drug categories are produced by manufacturers who have signed rebate agreements but PA is required todetermine medical necessity. Diagnosis and information regarding the medical requirements for these drug categoriesmust be provided on the PA request.*

• Enteral NutritionalProducts.

• Fertility EnhancementDrugs (when used totreat conditions otherthan infertility).

• Human GrowthHormone.

• Treatment forKaposi’s SarcomaLesions.

• Unlisted/Investigational Drugs. • Impotence Treatment Drugs (when used for acondition other than impotence).

Specialized Transmission Approval Technology-Prior Authorization (STAT-PA)

• Brand name histamine2 antagonists.

• Weight Loss Agents.

• Proton-Pump Inhibitors(when requested for useoutside of approveddiagnosis ranges).

• C-III and C-IV Stimulants(excludes Mazindol).

• Alpha-1-ProteinaseInhibitor.

• Brand name non-steroidal anti-inflammatory drugs (NSAIDs).

• Certain ACEInhibitors:√ Accupril.√ Altace.√ Lotensin.√ Monopril.√ Prinivil.√ Zestril.

Paper PA Submission


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Appendix

Appendix 2continued

*Note: Prior authorization requests can either be mailed to Wisconsin Medicaid or sent via fax. Use the address and faxnumber below:

Wisconsin MedicaidPrior Authorization UnitSuite 886406 Bridge RoadMadison, WI 53784-0088Fax: (608) 221-8616

Refer to the Prior Authorization section of this handbook for further information on PA requests.


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Appendix

Appendix 3Diagnosis Code Table For Diagnosis-Restricted Drugs and

Drug Categories

OVER

For uses outside of the following diagnoses, prior authorization (PA) is required. Submission of peer-reviewed medicalliterature to support the proven efficacy of the requested use of the drug is required for PA outside of the diagnosisrestriction. Refer to the Prior Authorization section of this handbook for further information on diagnosis-restricted drugs.

Drug Nameor Category Brand Name Diagnosis

Code Disease Description

Proton-PumpInhibitors

Aciphex,Nexium,Prevacid,Prilosec,Protonix

E9356

04186251553019530815368

Non-steroidal anti-inflammatory drug(NSAID)-induced gastric ulcerNSAID-induced duodenal ulcerH. Pylori infectionZollinger-Ellison syndromeErosive esophagitisGastroesophageal refluxGastric hypersecretory conditions

Misoprostol Cytotec E9356 NSAID-induced gastric ulcerNSAID-induced duodenal ulcer

Lansoprazole/Antibiotic Prevpac 04186 H. Pylori infection

Ranitidine/Bismuth Tritec 04186 H. Pylori infection

Alglucerase,Imiglucerase

Ceredase,Cerezyme 2727 Gaucher’s Disease

Epoetin Epogen,Procrit

042

5852399

Anemia from acquired immunedeficiency syndrome (AIDS)Renal failureMalignancy

InterferonAlfa 2A

Roferon-A

0705417291760-1769202420282030205123372339

Chronic hepatitis C w/o hepatic comaMalignant melanomaKaposi’s sarcomaHairy cell leukemiaNon-Hodgkin’s lymphomaMultiple myelomaChronic myelocytic leukemiaBladder carcinomaRenal cell carcinoma

InterferonAlfa 2B

Intron APEG-Intron

0781117291760-176920242028203023372339

Condylomata acuminataMalignant melanomaKaposi’s sarcomaHairy cell leukemiaNon-Hodgkin’s lymphomaMultiple myelomaBladder carcinomaRenal cell carcinoma


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Drug Nameor Category Brand Name Diagnosis

Code Disease Description

InterferonAlfa N3 Alferon N 07811 Condylomata acuminata

InterferonGamma 1B Actimmune 2881 Chronic granulomatous disease

InterferonAlfacon 1 Infergen 07054 Chronic hepatitis C w/o hepatic coma

InterferonAlfa 2B/Ribavirin

Rebitron 07054 Chronic hepatitis C w/o hepatic coma

InterferonBeta 1A Avonex 340 Multiple sclerosis

InterferonBeta 1B Betaseron 340 Multiple sclerosis

Filgrastim Neupogen 2880 Agranulocytosis/NeutropeniaSargramostim Leukine 205 Myeloid leukemia

Mupirocin Bactroban 2% 684 ImpetigoMuromonab

CD3Orthoclone

OKT-3 9968 Organ transplant rejection

Bupropion Zyban 3051 Nicotine dependence treatment

Nicotine Nicotine 3051 Nicotine dependence treatmentLegendPrenatalVitamins

V22-V229V23-V239V241

Normal pregnancySupervision of high-risk pregnancyLactating mother


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Appendix

Appendix 4Clozapine Management Services

Conditions for Clozapine ManagementPharmacies may be separately reimbursed for clozapine management services when all of the following conditions are met:

• A physician prescribes the clozapine management services in writing if any of the components of clozapine managementare provided by individuals who are not under the direct, on-site supervision of a physician. Although separateprescriptions are not required for clozapine tablets and clozapine management, the clozapine management service mustbe identified as a separately prescribed service from the drug itself.

• The recipient is currently taking or has taken clozapine tablets within the past four weeks.• The recipient resides in a community-based setting (excludes hospitals and nursing facilities).• The physician or qualified staff person has provided the components of clozapine management as described below.

Clozapine is appropriate for recipients with an International Classification of Diseases, Ninth Revision, ClinicalModification (ICD-9-CM) code diagnosis between 295.10 and 295.95 and who have a documented history of failure of atleast two psychotropic drugs. Lithium Carbonate may not be one of the two failed drugs. Reasons for the failure mayinclude:

• No improvement in functioning level.• Continuation of positive symptoms (hallucinations or delusions).• Severe side effects.• Tardive dyskinesia/dystonia.

Components of Clozapine ManagementThe following components are part of the clozapine management service (regardless of which of the three clozapinemanagement procedure codes is billed) and must be provided, as needed, by the physician or by a qualified professionalunder the general supervision of the physician:

1. Ensure that the recipient has the required weekly or biweekly white blood count testing. Recipients must have a bloodsample drawn for white blood cell count testing before initiation of treatment with clozapine and must have subsequentwhite blood cell counts done weekly for the first six months of clozapine therapy.

If a recipient has been on clozapine therapy for six months of continuous treatment and if the weekly white blood cellcounts remain stable (greater than or equal to 3,000/mm3) during the period, the frequency of white blood cell countmonitoring may be reduced to once every two weeks. For these recipients, further weekly white blood cell countsrequire justification of medical necessity. Recipients who have their clozapine dispensed every week but have theirblood drawn for white blood cell counts every two weeks qualify for biweekly, not weekly, clozapinemanagement services.

For recipients who have a break in therapy, white blood cell counts must be taken at a frequency in accordance with therules set forth in the “black box” warning of the manufacturer’s package insert.

The provider may draw the blood or transport the recipient to a clinic, hospital, or laboratory to have the blood drawn, ifnecessary. The provider may travel to the recipient’s residence or other places in the community where the recipient isavailable to perform this service, if necessary. The provider’s transportation to and from the recipient’s home or othercommunity location to carry out any of the required services listed here is considered part of the capitated weekly orbiweekly payment for clozapine management and is not separately reimbursable. The blood test is separatelyreimbursable for a Medicaid-certified laboratory.


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2. Obtain the blood test results in a timely fashion.3. Ensure that abnormal blood test results are reported in a timely fashion to the provider dispensing the recipient’s

clozapine.4. Ensure that the recipient receives medications as scheduled and that the recipient stops taking medication when a blood

test is abnormal, if this decision is made, and receives any physician-prescribed follow-up care to ensure that therecipient’s physical and mental well-being is maintained.

5. Make arrangements for the transition and coordination of the use of clozapine tablets and clozapine managementservices between different care locations.

6. Monitor the recipient’s mental status according to the care plan. The physician is responsible for ensuring that allindividuals having direct contact with the recipient in providing clozapine management services have sufficient trainingand education. These individuals must be able to recognize the signs and symptoms of mental illness and side effectsfrom drugs used to treat mental illness and to recognize when changes in the recipient’s level of functioning need to bereported to a physician or registered nurse.

7. Keep records as described below.

Recordkeeping Requirements for Clozapine ManagementThe provider must have a unique record for each recipient for whom clozapine management is being provided. This recordmay be a part of a larger record which is also used for other services if the provider is also providing other services to therecipient. However, the clozapine management records must be clearly identified as such and must contain the following:

• A face sheet identifying the recipient including the following information:√ Recipient’s Medicaid identification number.√ Recipient’s name.√ Recipient’s current address.√ Name, address, and telephone number of the primary medical provider (if different than the prescribing physician).√ Name, address, and telephone number of the dispensing provider from whom the recipient is receiving clozapine.√ Address and telephone number of other locations at which the recipient may be receiving a blood draw and at

which the recipient may be located on a regular basis.

• A care plan indicating the manner in which the provider ensures that the covered services are provided (e.g., planindicates where and when blood will be drawn, whether the recipient will pick up medications at the pharmacy orwhether they will be delivered by the provider). The plan should also specify signs or symptoms that might be associatedwith medical conditions resulting from side effects of the drug or related to the recipient’s mental illness which should bereported to a qualified medical professional.

The plan should indicate the health care professionals to whom oversight of the clozapine management services hasbeen delegated and indicate how often they will be seeing the recipient. The plan should be reviewed every six monthsduring the first year of clozapine use. Reviews may be reduced to once per year after the first year of use if therecipient is stable, as documented in the record.

• Copies of physician’s prescriptions for clozapine and clozapine management.

• Copies of laboratory results of white blood cell counts.

• Signed and dated notes documenting all clozapine management services. Indicate date of all blood draws as well as whoperformed the blood draws. If the provider had to travel to provide services, indicate the travel time. Document servicesprovided to ensure that the recipient received medically necessary care following an abnormal white blood cell count.

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Appendix

Physicians and pharmacies providing clozapine management services must be extremely careful not to double bill WisconsinMedicaid for services. This may happen when the physician provides clozapine management services as well as otherMedicaid-allowable physician services during the same encounter. In these cases, the physician must document the amountof time that was spent on the other physician service separate from the time spent on clozapine management. Regularpsychiatric medication management is not considered a part of the clozapine management services and may be billedseparately.

Noncovered Clozapine Management ServicesWisconsin Medicaid does not cover the following as clozapine management services:

• Clozapine management for a recipient not receiving clozapine, except for the first four weeks after discontinuation of thedrug.

• Clozapine management for recipients residing in a nursing facility or hospital on the date of service.• Care coordination, medical services, or provider transportation not related to the recipient’s use of clozapine.

Related Services That are Reimbursed Separately from Clozapine ManagementWhite Blood Cell Count - The white blood cell count must be performed and billed by a Medicaid-certified laboratory toreceive Wisconsin Medicaid reimbursement.

Recipient Transportation - Recipient transportation to a physician’s office or pharmacy is reimbursed in accordance withHFS 107.23, Wis. Admin. Code. Such transportation, when provided by a specialized medical vehicle, is not covered unlessthe recipient has a disability. Recipient transportation by common carrier must be approved and paid for by the countyagency responsible for Medicaid transportation services.

Billing for Clozapine ManagementRefer to the Claims Submission section of this handbook for information on billing for clozapine management.

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Appendix 5Wisconsin Medicaid Coverage of Over-the-Counter Medications

Some over-the-counter (OTC) drugs are covered for Wisconsin Medicaid eligible recipients. Additional OTCs may becovered for children under 21 years of age through HealthCheck “Other Services.” All OTCs require a legal prescription forWisconsin Medicaid reimbursement.

When presented with a legal prescription for an OTC, pharmacists should do the following:

• Submit the National Drug Code (NDC) through the Point-of-Sale (POS) system.• If the NDC reports as payable, do the following:

√ Dispense the medication.√ Transmit the claim.

If the OTC is covered through HealthCheck “Other Services,” pharmacists must ensure there is verification the childreceived a comprehensive HealthCheck exam within the last 365 days. The recipient must have verification of theHealthCheck exam. This may be a completed HealthCheck card, verification of the date of the HealthCheck exam writtenon the prescription, or any document with the date of the HealthCheck exam and the provider’s signature.

If the NDC for the medication dispensed is not covered by Wisconsin Medicaid and the medication is for a child who hashad a HealthCheck exam:

• Complete prior authorization (PA) forms. Be sure to do all the following:√ Include a copy of the HealthCheck verification.√ Include a completed section B of the Prior Authorization Drug Attachment (PA/DGA) or a copy of the prescription

order.√ Write the words “HealthCheck Other Services” across the top of the PA Request Form (PA/RF).√ Mail the form to Wisconsin Medicaid at the following address:

Wisconsin Medicaid Fax number: (608) 221-8616Prior AuthorizationSuite 886406 Bridge RoadMadison, WI 53784-0088

• If PA is approved, do all of the following:√ Dispense the medication.√ Submit the HCFA 1500 claim form using the procedure code assigned on the PA/RF.

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Appendix 6Wisconsin Medicaid Noncovered Drugs

Noncovered Drugs — FDA Less-Than-Effective Drugs

Wisconsin Medicaid does not cover or grant PA for less-than-effective (LTE) drugs nor for any generic alternativesidentified by the Food and Drug Administration (FDA) as identical, related, or similar to these drugs. Refer to thePharmacy Data Tables section of this handbook for a complete list of LTE drugs.

Appendix

Noncovered Drugs — No Manufacturer Rebate Agreement

Manufacturers of the following drugs have chosen not to participate in Wisconsin Medicaid. This is not a complete list ofnoncovered drugs. This list may change if manufacturers sign rebate agreements. Wisconsin Medicaid does not cover orgrant prior authorization (PA) for these drugs. Wisconsin Medicaid may cover the generic alternatives for these drugs ifthe manufacturer of the generic drugs signed a rebate agreement. The noncovered drugs include:

• Asthmanephrine.• Bichloracetic Acid.• Clear Tears.• Drysol.

• Duolube.• Eppy N Ophth Solution.• Eppy Sol Ophth.• Karidium.

• Karigel.• Lyteers.• Moisture Drops.• Monoject Insulin Jel.

• Nafrinse.• Neo-Tears.• Tinver Lotion.• Xerac AC.• Yodoxin.

Noncovered Drugs — Wisconsin Negative Formulary

• Alginate.• Eflornithine

(Vaniqa) Topical.

• Gaviscon.• Minoxidil Topical.• Non-Rebated Drugs Ineligible

for Prior Authorization.

• Progesterone for premenstrualsyndrome (PMS).

• Legend Multi-Vitamins (Non-prenatal) — excludes HealthCheck.

• Finasteride (Propecia).

Prior authorization will not be granted for these drugs.

• Any drug determined to be experimental in nature or not proven as an effective treatment for the condition for whichit is prescribed (See HFS 107.035, Wis. Admin. Code).

Fertility Enhancement Drugs (when used to treatinfertility):

• Menotropins.• Urofollitropin.

• Chorionic Gonadotropin.• Clomiphene.• Crinone.• Gonadorelin.

Impotence Treatment Drugs:

• Alprostadil Intracavernosal (Caverject, Edex).• Phentolamine Intracavernosal (Regitine).• Sildenafil (Viagra).• Urethral Suppository (MUSE).• Yohimbine.


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Appendix 7Wisconsin Medicaid

Maximum Allowed Pharmacy Dispensing Fee Schedule1

Per-Prescription Drug Payment Reduction (Effective 07/01/95) $0.50/prescription dispensed

Traditional Dispensing Fee (Effective 07/01/98) $4.88

Unit Dose Dispensing Fee2 (Effective 07/01/98) $6.94

Dispensing Allowance for Re-Packaging (Effective 04/01/97) $0.015/unit

Injectible Syringe Prefill Allowance (88888-0000-07) $1.20/unit

Note: One unit is one syringe.

Estimated Acquisition Cost (EAC) Calculation (Effective 07/01/90)Legend Drugs and Covered Over-the-Counter (OTC) Drugs Average Wholesale Price (AWP)

minus 10% or Maximum AllowedCost (MAC)

Compound Drug, Time AllowanceLevel Time Fee11 0-5 minutes $ 9.4512 6-15 minutes $14.6813 16-30 minutes $22.1614 31-60 minutes $22.1615 61+ minutes $22.16

1 Providers must bill Wisconsin Medicaid at an amount not in excess of the usual and customary charge billed to non-Medicaid recipients for the same service.

2 Unit dose fee is only available for qualified unit dose systems.

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Glossary

Glossary of Common TermsAdjustmentA modified or changed claim that was originally paid orallowed, at least in part, by Wisconsin Medicaid.

Allowed statusA Medicaid or Medicare claim that has at least oneservice that is reimbursable.

BadgerCareBadgerCare extends Medicaid coverage through aMedicaid expansion under Titles XIX and XXI touninsured children and parents with incomes at orbelow 185% of the federal poverty level and who meetother program requirements. The goal of BadgerCareis to fill the gap between Medicaid and privateinsurance without supplanting or “crowding out” privateinsurance.

BadgerCare benefits are identical to the benefits andservices covered by Wisconsin Medicaid, andrecipients’ health care is administered through the samedelivery system.

CPTCurrent Procedural Terminology. A listing ofdescriptive terms and codes for reporting medical,surgical, therapeutic, and diagnostic procedures. Thesecodes are developed, updated, and published annuallyby the American Medical Association and adopted forbilling purposes by the Health Care FinancingAdministration (HCFA) and Wisconsin Medicaid.

Compound DrugA prescription drug prepared by a pharmacist using atleast two ingredients.

Crossover claimA Medicare-allowed claim for a dual entitlee sent toWisconsin Medicaid for possible additional payment ofthe Medicare coinsurance and deductible.

Daily nursing facility rateThe amount that a nursing facility is reimbursed forproviding each day of routine health care services to arecipient who is a patient in the home.

Days’ SupplyThe estimated days’ supply of tablets, capsules, fluidscc’s, etc. that has been prescribed for the recipient.Days’ supply is not the duration of treatment, but theexpected number of days the drug will be used.

Dispensing PhysicianA physician who dispenses medication to patients andbills Medicaid.

DHCFDivision of Health Care Financing. The DHCFadministers Wisconsin Medicaid for the Department ofHealth and Family Services (DHFS) under statutoryprovisions, administrative rules, and the state’sMedicaid plan. The state’s Medicaid plan is acomprehensive description of the state’s Medicaidprogram that provides the Health Care FinancingAdministration (HCFA) and the U.S. Department ofHealth and Human Services (DHHS), assurances thatthe program is administered in conformity with federallaw and HCFA policy.

DHFSWisconsin Department of Health and Family Services.The DHFS administers the Wisconsin Medicaidprogram. Its primary mission is to foster healthy, self-reliant individuals and families by promotingindependence and community responsibility;strengthening families; encouraging healthy behaviors;protecting vulnerable children, adults, and families;preventing individual and social problems; and providingservices of value to taxpayers.

DHHSDepartment of Health and Human Services. TheUnited States government’s principal agency forprotecting the health of all Americans and providingessential human services, especially for those who areleast able to help themselves.

The DHHS includes more than 300 programs, coveringa wide spectrum of activities, including overseeingMedicare and Medicaid; medical and social scienceresearch; preventing outbreak of infectious disease;assuring food and drug safety; and providing financialassistance for low-income families.


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DOSDate of service. The calendar date on which a specificmedical service is performed.

Dual entitleeA recipient who is eligible for both Medicaid andMedicare, either Medicare Part A, Part B, or both.

EMCElectronic Media Claims. Method of claims submissionthrough a personal computer or mainframe system.Claims can be mailed on tape or transmitted viatelephone and modem.

Emergency servicesThose services which are necessary to prevent deathor serious impairment of the health of the individual.(For the Medicaid managed care definition ofemergency, refer to the Managed Care Guide or theMedicaid managed care contract.)

EOBExplanation of Benefits. Appears on the provider’sRemittance and Status (R/S) Report and informsMedicaid providers of the status of or action taken ontheir claims.

EVSEligibility Verification System. Wisconsin Medicaidencourages all providers to verify eligibility beforerendering services, both to determine eligibility for thecurrent date and to discover any limitations to arecipient’s coverage. Providers may access recipienteligibility information through the following methods:

• Automated Voice Response (AVR) system.• Magnetic stripe card readers.• Personal computer software.• Provider Services (telephone correspondents).• Direct Information Access Line with Updates for

Providers (Dial-Up).

Fee-for-serviceThe traditional health care payment system underwhich physicians and other providers receive apayment for each unit of service provided rather than acapitation payment for each recipient.

Fiscal agentThe Department of Health and Family Services(DHFS) contracts with Electronic Data Systems (EDS)to provide health claims processing services forWisconsin Medicaid, including provider certification,claims payment, provider services, and recipientservices. The fiscal agent also issues identificationcards to recipients, publishes information for providersand recipients, and maintains the Wisconsin MedicaidWeb site.

HCFAHealth Care Financing Administration. An agencyhoused within the U.S. Department of Health andHuman Services (DHHS), HCFA administersMedicare, Medicaid, related quality assuranceprograms, and other programs.

HCPCSHCFA Common Procedure Coding System. A listing ofservices, procedures, and supplies offered by physiciansand other providers. HCPCS includes CurrentProcedural Terminology (CPT) codes, nationalalphanumeric codes, and local alphanumeric codes. Thenational codes are developed by the Health CareFinancing Administration (HCFA) to supplement CPTcodes.

HealthCheckProgram which provides Medicaid-eligible childrenunder age 21 with regular health screenings.

ICD-9-CMInternational Classification of Diseases, NinthRevision, Clinical Modification. Nomenclature formedical diagnoses required for billing. Availablethrough the American Hospital Association.

InnovatorBrand name of the original patented drug of those listedon the Maximum Allowed Cost (MAC) list.

Legend DrugAny drug that requires a prescription under federalcode 21 USC 353(b).

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LOSLevel of Service. Field required when billing PCservices or compound drugs indicating the timeassociated with the service provided.

Maximum allowable fee scheduleA listing of all procedure codes allowed by WisconsinMedicaid for a provider type and Wisconsin Medicaid’smaximum allowable fee for each procedure code.

MedicaidMedicaid is a joint federal/state program established in1965 under Title XIX of the Social Security Act to payfor medical services for people with disabilities, people65 years and older, children and their caretakers, andpregnant women who meet the program’s financialrequirements.

The purpose of Medicaid is to provide reimbursementfor and assure the availability of appropriate medicalcare to persons who meet the criteria for Medicaid.Medicaid is also known as the Medical AssistanceProgram, Title XIX, or T19.

Medically necessaryAccording to HFS 101.03(96m), Wis. Admin. Code, aMedicaid service that is:

a) Required to prevent, identify or treat a recipient’sillness, injury or disability; andb) Meets the following standards:

1. Is consistent with the recipient’s symptoms orwith prevention, diagnosis or treatment of therecipient’s illness, injury or disability.

2. Is provided consistent with standards ofacceptable quality of care applicable to type ofservice, the type of provider and the setting inwhich the service is provided.

3. Is appropriate with regard to generallyaccepted standards of medical practice.

4. Is not medically contraindicated with regard tothe recipient’s diagnoses, the recipient’ssymptoms or other medically necessaryservices being provided to the recipient.

5. Is of proven medical value or usefulness and,consistent with s. HFS 107.035, is notexperimental in nature.

6. Is not duplicative with respect to other servicesbeing provided to the recipient.

7. Is not solely for the convenience of therecipient, the recipient’s family or a provider.

8. With respect to prior authorization of a serviceand to other prospective coveragedeterminations made by the department, iscost-effective compared to an alternativemedically necessary service which isreasonably accessible to the recipient.

9. Is the most appropriate supply or level ofservice that can safely and effectively beprovided to the recipient.

NCPDPNational Council for Prescription Drug Programs. Thisentity governs the telecommunication formats used tosubmit prescription claims electronically.

NDCNational Drug Code. An 11-digit code assigned to eachdrug. The first five numbers indicate the labeler code(Health Care Financing Administration [HCFA]-assigned), the next four numbers indicate the drug andstrength (labeler assigned), and the remaining twonumbers indicate the package size (labeler assigned).

OBRAOmnibus Budget Reconciliation Act. Federal legislationthat defines Medicaid drug coverage requirements anddrug rebate rules.

OTCOver-the-counter. Drugs that non-Medicaid recipientscan obtain without a prescription.

PAPrior authorization. The electronic or writtenauthorization issued by the Department of Health andFamily Services (DHFS) to a provider prior to theprovision of a service.

PCPharmaceutical Care. An enhanced dispensing fee paidto providers for specified activities which result in apositive outcome. Some outcomes include increasingpatient compliance or preventing potential adverse drugreactions.

POSPoint-of-Sale. A system that enables Medicaidproviders to submit electronic pharmacy claims in anon-line, real-time environment.

Glossary


for current policy


Glo

ssar

y

R/S ReportRemittance and Status Report. A statement generatedby the Medicaid fiscal agent to inform providersregarding the processing of their claims.

STAT-PASpecialized Transmission Approval Technology — PriorAuthorization. An electronic PA system that allowsMedicaid-certified pharmacy providers to request andreceive PA electronically rather than by mail for certaindrugs.

Switch transmissionsSystem that routes real-time transmissions from apharmacy to the processor. Also called Clearinghouseor Value-Added Network (VAN) system.

TOSType of service. A single-digit code which identifies thegeneral category of a procedure code.

UDUnit Dose Dispensing Fee. Reimbursement toproviders when a qualified unit dose dispensing systemis used. The drugs may be packaged into unit doses bythe labeler or the provider.


for current policy


Index

Index

Covered drugs and servicesComplete list, 23Compound drugs, 10Clozapine management, 11HealthCheck “Other Services,” 11Home infusion, 11Legend drugs, 9Over-the-counter, 10

Clozapine managementCoverage of, 11Services, 29

Dispensing feesCompound drug, 18Pharmaceutical Care, 18Repackaging allowance and, 18Schedule for, 37Traditional, 17Unit dose, 18

HealthCheck“Other Services,” 11

Legend drugsCoverage of, 9, 23-25Drug rebate agreement for, 9Noncovered, 10Reimbursement for, 17

Maximum days’ supply, 14

Noncovered servicesGeneral list, 15Noncovered drugs, 35Unacceptable practices, 16

Over-the-counter drugsAddition/correction request form for, 21Coverage of, 10, 33Reimbursement for, 17

ProvidersEligibility and certification, 5Prescribing providers, 13

“Brand medically necessary” requirements, 13Prescription requirements, 13Retention of prescription records, 14

Scope of service, 5

RecipientsCopayments, 7Eligibility verification, 6Hospice, 7Lock-in program, 6Managed care program, 6Medicaid identification cards, 6Spenddown, 7

Refill policy, 14

ReimbursementDispensing fees, 17-18Ingredient cost, 17

Unused medications of nursing facility residentsDestruction of medications, 15Refund for returned, reusable medications, 15Repackaging and relabeling medications, 15Return and reuse of medications, 14


for current policy


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Wisconsin Medicaid Pharmacy Covered Services and Reimbursement

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