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Validation of Pharmacy Payment Methodology versus NADAC

Industry	Medicaid
Problem	A state determined that all Managed Medicaid plans must comply with the CMS required National Average Drug Acquisition Cost (NADAC) as the pharmacy payment benchmark. The client needed validation that their current payment methodology compared to the NADAC benchmark payment results.
PHSI Solution	PHSL analyzed the client’s current pharmacy payments compared to the NADAC values on the dispense date for each claim and specific NDC. PHSL also evaluated alternative analyses performed by the client’s PBM and the state’s assessment.
Results	PHSL’s NADAC analysis indicated that the Managed Medicaid plan payments were more favorable overall to pharmacies than NADAC values. PHSL analysis of the the alternative assessments were inconclusive. This led the client to request more specific details of each assessment, because the initial information provided did not have detailed methodologies available. Based on PHSL’s assistance, the client was able to successfully resolve this issue with the state Medicaid department.