Maximum Allowable Cost Requirements Sample Clauses
The Maximum Allowable Cost Requirements clause sets a ceiling on the amount that can be charged or reimbursed for specific goods or services, typically within contracts involving pharmaceuticals or healthcare products. In practice, this clause establishes a list or formula that determines the highest price a payer, such as an insurance company or pharmacy benefit manager, will pay for a particular item, regardless of the supplier's actual charge. By doing so, it helps control costs, prevent overpayment, and ensure that spending remains within agreed-upon limits.
Maximum Allowable Cost Requirements. The MCO must develop maximum allowable cost (MAC) prices and lists that comply with state and federal laws, including Texas Government Code § 533.005(a)(23)(K). To place an outpatient drug on a MAC list, the MCO must ensure that: • the drug is listed as "A" or "B" rated in the most recent version of the United States Food and Drug Administration's Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, has an "NR" or "NA" rating or similar rating by a nationally recognized reference; and • the drug is generally available for purchase by pharmacies in Texas from national or regional wholesalers and is not obsolete. The MCO cannot set a MAC on a drug that is both preferred on HHSC's PDL and a brand name drug. The MCO must provide a Network pharmacy the sources used to determine the MAC pricing at contract execution, renewal, and upon request. When determining MAC prices, the MCO may only compare drugs listed as therapeutically equivalent in the most recent version of the Orange Book to formulate the MAC price. The MCO must review and update MAC prices at least once every seven days to reflect any modifications of MAC pricing, and establish a process for eliminating products from the MAC list or modifying MAC prices in a timely manner to remain consistent with pricing changes and product availability in the Service Area. The MCO must implement a process for allowing Network pharmacies to challenge a MAC price no later than September 1, 2013. The MCO must submit the process for HHSC's review and approval prior to implementation and modification. The MCO must respond to a challenge by the 15th day after it is made. If the challenge is successful, the MCO must adjust the drug price, effective on the date the challenge is resolved, and apply the new price to all similarly situated Network pharmacies, as appropriate and determined by the MCO. If the challenge is denied, the MCO must provide the pharmacy the reasons for the denial. The MCO must provide a quarterly report regarding MAC price challenges in the manner and format specified in the UMCM. No later than March 1, 2014, the MCO must implement a process that allows a Network pharmacy to readily access the pharmacy's MAC price through a website. The MCO must submit the process for HHSC's review and approval prior to implementation and modification. As described in Texas Government Code § 533.005(a-2), a MAC price list that is specific to a Network pharmacy is confidentia...