Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

In the matter of the amendment of ARM 37.86.805, 37.86.1004, 37.86.1105, 37.86.1506, 37.86.2207, 37.86.2405, and 37.86.2605 pertaining to Medicaid acute services

reimbursement and early and periodic screening, diagnostic and treatment (EPSDT)

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NOTICE OF AMENDMENT

TO: All Concerned Persons

1. On May 26, 2011, the Department of Public Health and Human Services published MAR Notice No. 37-539 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 851 of the 2011 Montana Administrative Register, Issue Number 10.

2. The department has amended the above-stated rules as proposed.

3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

COMMENT #1: A comment was made on the proposed changes to the reimbursement of hearing aid services (ARM 37.86.805), Early and periodic Screening, Diagnosis, and Treatment (EPSDT) services (ARM 37.86.2207), and school-based providers (ARM 37.86.2207). The commenter opposes the 2% cuts, stating these cuts will have a devastating effect on both adults and children with hearing loss. The EPSDT cuts will deny services to help adults and children recover essentials skills to communicate and the cuts to school-based services will affect children who need to build their literacy and learning skills. The commenter would like the department to reconsider the proposed reimbursement cuts.

RESPONSE #1: Thank you for your comments on the proposed rules but the department disagrees. The proposed amendments reducing the reimbursement rates to Medicaid providers by up to 2% will begin on August 1, 2011. These provider rate changes are based on a provider rate increase that went into effect in fiscal year (FY) 2010, and was held constant in FY 2011. The 2010 provider rate increase was paid for with one-time-only (OTO) funding appropriated by the 61st Legislative session meeting in 2009. This OTO funding was not included in the budget base for FY 2012 and the funds were not appropriated by the 62nd Legislative session. The department does not believe that the reduction is material enough to prevent the delivery of services.

COMMENT #2: A comment was made on the proposed reduction in pharmacy dispensing fee in ARM 37.86.1105. The commenters are opposing the proposed reduction of the drug reimbursement fee from $5.04 to $4.94 called for in 37.86.1105. The commenter stated pharmacies have taken a large reduction in Medicaid reimbursement with the implementation of the State Maximum Allowable Cost (SMAC) program and implementing a reduction in dispensing fees would lead many pharmacies to make a decision to no longer accept Medicaid clients. The dispensing fee is already low and the average dispensing fee, according to a survey conducted in 2007, is between $8.50 and $13.08. The commenter further stated the rate reduction does not take into consideration the cost associated with dispensing medication for clients, such as labor, energy, training, and drug inventory maintenance.

The commenter would also like to know if the rate reduction is only for new pharmacies or all pharmacies. The commenter is opposing the dispensing fee rate reduction and would like Montana Medicaid to reconsider the decision based on recent dispensing fee surveys, dispensing fee costs, and the SMAC program implemented last year.

RESPONSE #2: Thank you for your comments on the proposed rules. The department has considered your comments and will not be able to maintain the dispensing fee of $5.04 for reasons outlined in the response to comment #1. The maximum dispensing fee shall be $4.94 effective August 1, 2011. This applies to all pharmacy providers

/s/ John Koch /s/ Mary E. Dalton for

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State July 18, 2011.