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Dear USET/USET SPF Family,
On May 29, 2021, the Department of Veterans Affairs (VA) sent a Dear Tribal Leader Letter requesting comments on pharmacy reimbursement rates for facilities in the contiguous 48 states participating in the VA’s Indian Health Service/Tribal Health Program (IHS/THP) Reimbursement Agreement Program (RAP). Under the current RAP, the VA has become aware that the term “actual cost” may be confusing and has led to difficulties in the administration of RAPs to be in legal compliance.
VA is proposing to replace the term “actual cost” with a recognizable, easily calculated rate, for IHS/THP facilities to predict reimbursement rates and eliminate the need to calculate actual cost. In order to do this, VA is proposing two distinct pharmacy payment rates for IHS and THP facilities. For IHS facilities, VA is proposing to use the Federal Supply Schedule, or other contractual agreements, for pharmaceutical purchases. For THP facilities the VA is proposing to use one of the following—
- Wholesale Acquisition Cost (WAC), with a dispensing fee; or
- Average Wholesale Price (AWP), minus the discount, and a dispensing fee for the purpose of selecting a new pharmacy payment methodology for THPs.
The VA is requesting comments on the following—
- For the rates for THP facilities, what is your preferred pharmacy payment methodology; Wholesale Acquisition Cost (WAC) or Average Wholesale Price (AWP), plus dispensing fee?
- For the rates for THP facilities, if you identify Average Wholesale Price (AWP) as the preferred method, what would you propose as the AWP discount percent rate for generic drugs and name brand/specialty drugs? How did you calculate or determine the proposed discount percent rate?
- For THP dispensing fee, VA proposes to adopt an amount in the industry standard range, generally less than $1.00 per drug, to be applied to either selected rates (WAC or AWP). Do you agree with $1.00/drug dispensing fee? If not, what do you propose the dispensing fee should be? How did you calculate or determine the proposed dispensing fee?
- Do you have any comments on pharmacy reimbursement rates for IHS facilities and/or the related claims submission and reimbursement process?
Comments on the VA proposed questions are due July 5, 2021 and can be submitted via email to tribalgovernmentconsultation@va.gov.
Questions regarding this proposal can be sent to Tribal.Agreements@va.gov. For more information, please visit the VA Office of Community Care’s website by clicking here.
For more information, please contact Brian Howard, USET SPF Senior Policy Analyst, at bhoward@usetinc.org.
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