Bulletin No. 07-04
January 27, 2003


Payment for pharmaceuticals not covered by Medi-Cal fee schedule

Labor Code Section 5307.1, subdivisions (a), (d) and (e), enacted last year as part of Senate Bill 228, govern the payments for pharmaceuticals under DWC's official medical fee schedule (OMFS). These sections state that:

"(a)...for pharmacy services and drugs that are not otherwise covered by a Medicare fee schedule payment for facility services, the maximum reasonable fees shall be 100% of fees prescribed in the relevant Medi-Cal payment system.

"d)...If the administrative director determines that a pharmacy service or drug is not covered by a Medi-Cal payment system, the administrative director shall establish maximum fees for that item, provided, however, that the maximum fee paid shall not exceed 100 percent of the fees paid by Medi-Cal for pharmacy services or drugs that require comparable resources.

"(e) Prior to the adoption by the administrative director of a medical fee schedule pursuant to this section, for any treatment, facility use, product, or service not covered by a Medicare payment system, including acupuncture services, or, with regard to pharmacy services and drugs, for a pharmacy service or drug that is not covered by a Medi-Cal payment system, the maximum reasonable fee paid shall not exceed the fee specified in the official medical fee schedule in effect on December 31, 2003."

At the beginning of the year DWC established a web based price calculator that provides parties the Medi-Cal price for drugs. It is located at http://www.dir.ca.gov/dwc/pharmfeesched/pfs.asp.

Since then, questions have arisen about fees for drugs that are not on the Medi-Cal price list. For instance, the web query service does not work for many repackaged drugs. Since Medi-Cal does not reimburse for most repackaged drugs, their price information is not available in the Medi-Cal database.

DWC is in the process of determining the proper method of reimbursing for drugs not covered by Medi-Cal. All pharmaceuticals whose National Drug Code (NDC) numbers appear in the Medi-Cal database on the DWC web site are governed by the Medi-Cal rates, regardless of who dispenses the pharmaceutical.

Payment should not be denied based on the NDC number not being in the database. For NDC codes not listed, DWC will be developing an alternative methodology for setting maximum reasonable fees for pharmaceuticals. That fee schedule will be adopted after public hearings.

Until that time, and pursuant to Labor Code section 5307.1 (e), the maximum reasonable fee paid shall not exceed the fee specified in the official medical fee schedule in effect on December 31, 2003.

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