CMS is finalizing the Medicaid Covered Outpatient Drugs proposed rule (CMS-2345-P), which redefines drug ingredient reimbursement from a state’s best estimate of drug costs (estimated acquisition cost or EAC) to actual acquisition cost (AAC), and requires states to align their professional dispensing fee to be consistent with their ingredient cost reimbursement.

Final action on the proposed rule is expected this year. Therefore, states will need to quickly prepare for pharmacy program changes to comply with the final rule.

State Options for Redefining EAC

  • National Cost (NADAC).Average Drug Acquisition.
  • State-level Average Acquisition Cost (AAC) program.

State Options for Evaluating Dispensing Fee

  • Recent in-state cost of dispensing (COD) study.
  • New in-state COD study.
  • Neighboring state’s COD study.

Key Considerations for Implementing AAC-based Reimbursement

  • Alternative pricing strategy for drugs that do not have a NADAC.
  • Provider help desk experienced with AAC-based reimbursement.
  • AAC-based pricing for specialty drugs.
  • Evaluation of dispensing fee.
  • Fiscal impact analysis of changes.
  • Planning for necessary claims system changes.
  • Regulatory changes, rule revisions, and State Plan Amendment submission.

Guidance for NADAC or AAC Implementation
Myers and Stauffer is highly qualified to provide guidance to your state through the implementation and maintenance of a new pharmacy reimbursement methodology that is compliant with the new requirements. Highlights of our unique expertise include:

  • CMS’ contractor for NADAC program.
  • Pioneer of AAC reimbursement for pharmacy claims.
  • The most experienced vendor with AAC reimbursement programs in the nation.
  • Performed COD studies for over 3 decades.
  • Expert pharmacy fiscal analysis impact.
  • Wealth of insight from our considerable AAC experience.
  • Qualified and experienced professional staff of pharmacists, accountants and IT staff.

For More Information

We encourage you to contact Lynsey Plew by email at to arrange a discussion or meeting for more information regarding the NADAC, the AAC-based pricing approach, the implications of these new requirements on your program, or to answer any general questions.

Myers and Stauffer has more than 35 years experience providing accounting, consulting and data management services to state Medicaid agencies.