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.”
Friday, November 22nd AAC Rate Update Delay
Every Friday, 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.
The next regularly scheduled rate update is this Friday, November 22nd. Instead of updating AAC rates on Friday, November 22nd, the Department is delaying the rate update one day to Saturday, November 23rd. The effect of this is Pharmacies experiencing a change in AAC reimbursement Saturday morning instead of Friday Morning. The Department is still publishing the weekly AAC Price List to the Department’s website on Friday, but listed AAC rates will be effective Saturday.
The one day delay will only affect this week’s AAC rate update. Future AAC rate updates will occur on Friday as usual. If you have any questions 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.