Average Acquisition Cost (AAC)
Pharmacy Rate Methodology Transition
As of February 1, 2013, the Department of Health Care Policy and Financing (the Department) implemented a new methodology to reimburse pharmacies that dispense pharmaceutical products to Medicaid clients. The Department is transitioning to this new reimbursement methodology to better align Medicaid reimbursement to actual acquisition costs incurred by Colorado pharmacies. The new reimbursement methodology is based on the average acquisition cost (AAC) of a given pharmaceutical product using invoice data provided by Colorado pharmacies. If the Department cannot price a pharmaceutical product, the Department will reimburse am Medicaid provider using Wholesale Acquisition Cost (WAC).
Every month, the Department will rebase the AAC Price List based mostly on invoice price data provided by a representative group of Colorado pharmacies. To account for normal weekly fluctuations in cost, the Department is also updating the AAC Price List every week based on fluctuation in price using a national pricing benchmark. Every week, the Department will publish a new AAC Price List found under the page named “Average Acquisition Cost (AAC) Price List.”
On Friday's, the Department updates AAC rates based on changes in pharmaceutical market prices and publishes an AAC Price List to the Department’s website highlighting these changes.
Provided below is the current AAC Price List, including all rate updates occurring December 6th, 2013, listed by National Drug Code (NDC). This list is in addition to the regular AAC Price List, listing AAC rates by Generic Code Number (GCN), published to the Department’s website every week. At this time, the Department is only publishing the list by NDC for the December 6th rate update. If you have any questions, or are interested in the Department publishing the AAC Price List by NDC every week, please contact the Department at Colorado.SMAC@state.co.us.
If you have any questions or concerns, please contact Jeff Wittreich by email at Jeff.Wittreich@state.co.us or by phone at 303-866-2456.
AAC Inquiry Worksheet
A pharmacy wanting to report a discrepancy between the purchase price of a drug and the prevailing AAC rate should complete the worksheet titled "Average Acquisition Cost (AAC) Inquiry Worksheet."
Submission of the worksheet does not guarantee an adjustment to the AAC rate. The Department will follow it's own internal process to determine if AAC rate is not representative of the actual acquisition cost for a drug. The Department will have up to five state working days to review the drug and provide a response to the pharmacy. If the AAC rate requires revision, the Department will have five additional state working state working days from the date the response was provided to the pharmacy to update the AAC rate.
Dispensing Fee Attestation Letter
Reimbursement for costs related to dispensing a pharmaceutical product is determined based on the billing pharmacy’s total annual prescription volume. All new Medicaid pharmacies must complete the Dispensing Fee Attestation Letter stating their total annual prescription volume for the previous twelve months before a Medicaid claim can be billed.