CMS Delays Implementation of AMP-Based FULs, Originally Scheduled for July

Summary

On June 2, CMS announced that it will not finalize the Average Manufacture Price (AMP) based Federal Upper Limits (FULs) for reimbursement of multiple source drugs in Medicaid in July 2014, as expected.

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In November 2013, CMS issued a letter stating that it planned to implement AMP-based FULs in July 2014, following the expected release of the Medicaid Covered Outpatient Drugs final rule (“AMP rule”) in May 2014. CMS has not yet released the Final AMP rule, but may release the rule later this month according to the latest regulatory agenda.

CMS stated in its November 2013 letter that it would issue additional guidance to states regarding implementation of revised FULs, but wanted to provide advance notice to states to begin State Plan Amendments (SPA), which they must complete to incorporate the FUL data into pharmacy reimbursement systems. In their latest announcement, CMS did not provide an updated timeline, but said it is committed to releasing additional guidance to states and will ensure that states have sufficient time to implement the FULs.

The delay comes after lawmakers and pharmacy stakeholders submitted letters to CMS voicing concerns about the tight timeline faced by states to implement finalized FULs. The letters-from pharmacy stakeholders, congressmen, and senators-urge CMS to allow states a one-year transition period to implement AMP-based FULs and make corresponding adjustments to their drug dispensing fees.

While CMS is expected to release the final AMP rule in the coming weeks, more delays are possible.

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