North Carolina § 90-85 - 27. Definitions.

§ 90-85. 27. Definitions.

As used in G.S. 90-85.28 through G.S. 90-85.31 : Biological product. - As defined in section 351(i) of the Public Health Service Act, 42 U.S.C. § 262(i). Equivalent drug product. - A drug product which has the same established name, active ingredient, strength, quantity, and dosage form, and which is therapeutically equivalent to the drug product identified in the prescription. Established name. - As defined in section 502(e)(3) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 352(e)(3). Good manufacturing practice. - As defined in Part 211 of Chapter 1 of Title 21 of the Code of Federal Regulations. Interchangeable biological product. - A biological product determined by the United S tates Food and Drug Administration to meet the standards set forth in 42 U.S.C. § 262(k)(4), or deemed therapeutically equivalent by the United States Food and Drug Administration. Manufacturer. - The actual manufacturer of the finished dosage form of the drug. Narrow therapeutic index drugs. - Those pharmaceuticals having a narrowly defined range between risk and benefit. Such drugs have less than a twofold difference in the minimum toxic concentration and minimum effective concentration in the blood or are those drug product formulations that exhibit limited or erratic absorption, formulation-dependent bioavailability, and wide intrapatient pharmacokinetic variability that requires blood-level monitoring. Drugs identified as having narrow therapeutic indices shall be designated by the North Carolina Secretary of Health and Human Services upon the advice of the State Health Director, North Carolina Board of Pharmacy, and North Carolina Medical Board, as narrow therapeutic index drugs and shall be subject to the provisions of G.S. 90-85.28(b1). The North Carolina Board of Pharmacy shall submit the list of narrow therapeutic index drugs to the Codifier of Rules, in a timely fashion for publication in January of each year in the North Carolina Register. Prescriber. - Anyone authorized to prescribe drugs pursuant to the laws of this State. History (1979, c. 1017, s. 1; 1981 (Reg. Sess., 1982), c. 1188, s. 3; 1983, c. 196, s. 9; 1997-76, s. 1; 1997-443, s. 11A.118(b); 2015-27, s. 1.) Medicaid Services and Payment Bases. - Session Laws 2011-145, s. 10.31(d), as amended by Session Laws 2012-72, s. 8, provides: "Services and Payment Bases. - The Department shall spend funds appropriated for Medicaid services in accordance with the following schedule of services and payment bases. Unless otherwise provided, services and payment bases will be as prescribed in the State Plan as established by the Department of Health and Human Services and may be changed with the approval of the Director of the Budget. "The Department of Health and Human Services (DHHS) shall operate and manage the Medicaid program within the annual State appropriation. DHHS shall establish policies, practices, rates, and expenditure procedures that are in compliance with CMS regulations and approved State Plans, State laws, and regulations. "Additionally, the Department shall be required to use the Physician's Advisory Group for review and will collaborate with other stakeholder groups in the adoption and implementation of all clinical and payment policies, including all public notice and posting provisions in use as of the effective date of this provision. "(1) Mandatory Services. - In order to manage the Medicaid program within the annual State appropriation, the Secretary shall have the authority to submit State Plan amendments and establish temporary rules affecting the amount of service and payment rate for the following mandatory services: "a. Hospital inpatient. - Payment for hospital inpatient services will be prescribed by the State Plan as established by the Department of Health and Human Services. "b. Hospital outpatient. - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services. "c. Nursing facilities. - Nursing facilities providing services to Medicaid recipients who also qualify for Medicare must be enrolled in the Medicare program as a condition of participation in the Medicaid program. State facilities are not subject to the requirement to enroll in the Medicare program. Residents of nursing facilities who are eligible for Medicare coverage of nursing facility services must be placed in a Medicare-certified bed. Medicaid shall cover facility services only after the appropriate services have been billed to Medicare. "d. Physicians, certified nurse midwife services, nurse practitioners, physician assistants. - Fee schedules as developed by the Department of Health and Human Services. "e. EPSDT screens. - Payments in accordance with rate schedule developed by the Department of Health and Human Services. "f. Home health and related services, durable medical equipment. - Payments according to reimbursement plans developed by the Department of Health and Human Services. "g. Rural health clinical services. - Provider-based, reasonable cost, nonprovider-based, single-cost reimbursement rate per clinic visit. "h. Family planning. - Negotiated rate for local health departments. For other providers see specific services, e.g., hospitals, physicians. "i. Independent laboratory and X-ray services. - Uniform fee schedules as developed by the Department of Health and Human Services. "j. Medicare Buy-In. - Social Security Administration premium. "k. Ambulance services. - Uniform fee schedules as developed by the Department of Health and Human Services. Public ambulance providers will be reimbursed at cost. " l . Medicare crossover claims. - The Department shall apply Medicaid medical policy to Medicare claims for dually eligible recipients. The Department shall pay an amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services. The Department may disregard application of this policy in cases where application of the policy would adversely affect patient care. "m. Pregnancy-related services. - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits as described in clinical policy. "n. Mental health services. - Coverage is limited to children eligible for EPSDT services provided by: "1. Licensed or certified psychologists, licensed clinical social workers, licensed clinical social workers associates, certified clinical nurse specialists in psychiatric mental health advanced practice, nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed professional counselor associates, licensed marriage and family therapists, licensed marriage and family therapist associates, licensed clinical addictions specialists, licensed clinical addiction specialists associate, and certified clinical supervisors, when Medicaid-eligible children are referred by the Community Care of North Carolina primary care physician, a Medicaid-enrolled psychiatrist, or the area mental health program or local management entity, and "2. Institutional providers of residential services as defined by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) for children and Psychiatric Residential Treatment Facility services that meet federal and State requirements as defined by the Department. "(2) Optional Services. - In order to manage the Medicaid program within the annual State appropriation, the Secretary shall have the authority to submit State Plan amendments and establish temporary rules affecting the amount of service, payment rate, or elimination of the following optional services: "a. Certified registered nurse anesthetists. "b. Community Alternative Programs. "c. Hearing aids. - Wholesale cost plus dispensing fee to provider. "d. Ambulatory surgical centers. "e. Private duty nursing, clinic services, prepaid health plans. "f. Intermediate care facilities for the mentally retarded. "g. Chiropractors, podiatrists, optometrists, dentists. "h. Dental coverage. - Dental services shall be provided on a restricted basis in accordance with criteria adopted by the Department to implement this subsection. "i. Optical supplies. - Payment for materials is made to a contractor in accordance with 42 C.F.R. § 431.54(d). Fees paid to dispensing providers are negotiated fees established by the State agency based on industry charges. "j. Physical therapy, occupational therapy, and speech therapy. - Services for adults. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services. "k. Personal care services. - Payment in accordance with the State Plan developed by the Department of Health and Human Services. " l . Case management services. - Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services. "m. Hospice and palliative care. "n. Medically necessary prosthetics or orthotics. - In order to be eligible for reimbursement, providers must be licensed or certified by the occupational licensing board or the certification authority having authority over the provider's license or certification. Medically necessary prosthetics and orthotics are subject to prior approval and utilization review. "o. Health insurance premiums. "p. Medical care/other remedial care. - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals. "q. Bariatric surgeries. - Covered as described in clinical policy 1A-15, Surgery for Clinically Severe Obesity. In order to raise the standard of bariatric care in North Carolina, approval for these procedures shall be granted only to those providers (facilities and surgeons) who are designated as a Bariatric Surgery Center of Excellence (BSCOE) by the American Society for Metabolic and Bariatric Surgery (ASMBS). Providers must then submit to NC Medicaid documentation of their designation as a BSCOE, as well as verify their continued annual participation. "r. Drugs. - "1. Reimbursements. - Reimbursements shall be available for prescription drugs as allowed by federal regulations plus a professional services fee per month, excluding refills for the same drug or generic equivalent during the same month. Payments for drugs are subject to the provisions of this subdivision or in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be established by the Department. In addition to the professional services fee, the Department may pay an enhanced fee for pharmacy services. "2. Limitations on quantity. - The Department of Health and Human Services may establish authorizations, limitations, and reviews for specific drugs, drug classes, brands, or quantities in order to manage effectively the Medicaid program. The Department may impose prior authorization requirements on brand-name drugs for which the phrase 'medically necessary' is written on the prescription. "3. Dispensing of generic drugs. - Notwithstanding G.S. 90-85.27 through G.S. 90-85.31 , or any other law to the contrary, under the Medical Assistance Program (Title XIX of the Social Security Act), and except as otherwise provided in this subsection for drugs listed in the narrow therapeutic index, a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber has determined, at the time the drug is prescribed, that the brand-name drug is medically necessary and has written on the prescription order the phrase 'medically necessary.' An initial prescription order for a drug listed in the narrow therapeutic drug index that does not contain the phrase 'medically necessary' shall be considered an order for the drug by its established or generic name, except that a pharmacy shall not substitute a generic or established name prescription drug for subsequent brand or trade name prescription orders of the same prescription drug without explicit oral or written approval of the prescriber given at the time the order is filled. Generic drugs shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand-name drugs. Notwithstanding this subdivision to the contrary, the Secretary of Health and Human Services may prevent substitution of a generic equivalent drug, including a generic equivalent that is on the State maximum allowable cost list, when the net cost to the State of the brand-name drug, after consideration of all rebates, is less than the cost of the generic equivalent. As used in this subsection, 'brand name' means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and 'established name' has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act, as amended, 21 U.S.C. § 352(e)(3). "4. Specialty drug provider network. - The Department of Health and Human Services shall work with specialty drug providers, manufacturers of specialty drugs, Medicaid recipients who are prescribed specialty drugs, and the medical professionals that treat Medicaid recipients who are prescribed specialty drugs to develop ways to ensure that best practices and the prevention of overutilization are maintained in the delivery and utilization of specialty drugs. "5. Lock controlled substances prescriptions into single pharmacy/provider. - The Department of Health and Human Services, Division of Medical Assistance, shall lock Medicaid enrollees into a single pharmacy and provider when the Medicaid enrollee's utilization of selected controlled substance medications meets the lock-in criteria approved by the North Carolina Physicians Advisory Group, as follows: "I. Enrollees may be prescribed selected controlled substance medications by only one prescribing physician and may not change the prescribing physician at any time without prior approval or authorization by the Division. "II. Enrollees may have prescriptions for selected controlled substance medications filled at only one pharmacy and may not change to another pharmacy at any time without prior approval or authorization by the Division. "5A. Prior authorization. - The Department of Health and Human Services shall not impose prior authorization requirements or other restrictions under the State Medical Assistance Program on medications prescribed for Medicaid recipients for the treatment of (i) mental illness, including, but not limited to, medications for schizophrenia, bipolar disorder, major depressive disorder or (ii) HIV/AIDS. Medications prescribed for the treatment of mental illness shall be included on the Preferred Drug List (PDL). The Department of Health and Human Services, Division of Medical Assistance, may initiate prior authorization for the prescribing of drugs specified for the treatment of mental illness by providers who fail to prescribe those drugs in accordance with indications and dosage levels approved by the federal Food and Drug Administration. The Department may require retrospective clinical justification for the use of multiple psychotropic drugs for a Medicaid patient. For individuals 18 years of age and under who are prescribed three or more psychotropic medications, the Department shall implement clinical edits that target inefficient, ineffective, or potentially harmful prescribing patterns. When such patterns are identified, the Medical Director for the Division of Medical Assistance and the Chief of Clinical Policy for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall require a peer-to-peer consultation with the target prescribers. Alternatives discussed during the peer-to-peer consultations shall be based upon: "a. Evidence-based criteria available regarding efficacy or safety of the covered treatments; and "b. Policy approval by a majority vote of the North Carolina Physicians Advisory Group (NCPAG). "The target prescriber has final decision-making authority to determine which prescription drug to prescribe or refill. "6. Preferred Drug List. - The Department of Health and Human Services shall establish and implement a preferred drug list program under the Division of Medical Assistance. Medications prescribed for the treatment of mental illness shall be included on the Preferred Drug List (PDL). "The pharmaceutical and therapeutics committee of the Physician's Advisory Group (PAG) shall provide ongoing review of the preferred drug list, including the implementation of prior authorization on identified drugs. Members of the committee shall submit conflict of interest disclosure statements to the Department and shall have an ongoing duty to disclose conflicts of interest not included in the original disclosure. "The Department, in consultation with the PAG, shall adopt and publish policies and procedures relating to the preferred drug list, including the following: "I. Guidelines for the presentation and review of drugs for inclusion on the preferred drug list. "II. The manner and frequency of audits of the preferred drug list for appropriateness of patient care and cost-effectiveness. "III. An appeals process for the resolution of disputes. "IV. Such other policies and procedures as the Department deems necessary and appropriate. "The Department and the pharmaceutical and therapeutics committee shall consider all therapeutic classes of prescription drugs for inclusion on the preferred drug list, except medications for treatment of human immunodeficiency virus or acquired immune deficiency syndrome shall not be subject to consideration for inclusion on the preferred drug list. "The Department shall maintain an updated preferred drug list in electronic format and shall make the list available to the public on the Department's Internet Web site. "The Department shall (i) enter into a multistate purchasing pool; (ii) negotiate directly with manufacturers or labelers; (iii) contract with a pharmacy benefit manager for negotiated discounts or rebates for all prescription drugs under the medical assistance program; or (iv) effectuate any combination of these options in order to achieve the lowest available price for such drugs under such program. "The Department may negotiate supplemental rebates from manufacturers that are in addition to those required by Title XIX of the Social Security Act. The committee shall consider a product for inclusion on the preferred drug list if the manufacturer provides a supplemental rebate. The Department may procure a sole source contract with an outside entity or contractor to conduct negotiations for supplemental rebates. "The Secretary of the Department of Health and Human Services shall establish a Preferred Drug List (PDL) Policy Review Panel within 60 days after the effective date of this section. The purpose of the PDL Policy Review Panel is to review the Medicaid PDL recommendations from the Department of Health and Human Services, Division of Medical Assistance, and the Physician Advisory Group Pharmacy and Therapeutics (PAG P&T) Committee. "The Secretary shall appoint the following individuals to the review panel: (i) the Director of Pharmacy for the Division of Medical Assistance, (ii) a representative from the PAG P&T Committee, (iii) a representative from the Old North State Medical Society, (iv) a representative from the North Carolina Association of Pharmacists, (v) a representative from Community Care of North Carolina, (vi) a representative from the North Carolina Psychiatric Association, (vii) a representative from the North Carolina Pediatric Society, (viii) a representative from the North Carolina Academy of Family Physicians, (ix) a representative from the North Carolina Chapter of the American College of Physicians, (x) a representative from a research-based pharmaceutical company, (xi) a representative from a hospital-based pharmacy. "Individuals appointed to the Review Panel, except for the Division's Director of Pharmacy, shall serve only a two-year term. "After the Department, in consultation with the PAG P&T Committee, publishes a proposed policy or procedure related to the Medicaid PDL, the Review Panel shall hold an open meeting to review the recommended policy or procedure along with any written public comments received as a result of the posting. The Review Panel shall provide an opportunity for public comment at the meeting. After the conclusion of the meeting, the Review Panel shall submit policy recommendations about the proposed Medicaid PDL policy or procedure to the Secretary. "The Department may establish a Preferred Drug List for the North Carolina Health Choice for Children program and pursue negotiated discounts or rebates for all prescription drugs under the program in order to achieve the lowest available price for such drugs under such program. The Department may procure a sole source contract with an outside entity or contractor to conduct negotiations for these discounts or rebates. The PAG P&T Committee and Preferred Drug List Policy Review Panel will provide recommendations on policies and procedures for the NC Health Choice Preferred Drug List. "s. Incentive Payments as outlined in the State Medicaid Health Information Plan for Electronic Health Records. "t. Other mental health services. - Unless otherwise covered by this section, coverage is limited to the following: "1. Services as established by the Division of Medical Assistance in consultation with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services and approved by the Centers for Medicare and Medicaid Services (CMS) when provided in agencies meeting the requirements and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services, not to exceed the upper limits established in federal regulations. "2. For Medicaid-eligible adults, services provided by licensed or certified psychologists, licensed clinical social workers, certified clinical nurse specialists in psychiatric mental health advanced practice, nurse practitioners certified as clinical nurse specialists in psychiatric mental health advanced practice, licensed psychological associates, licensed professional counselors, licensed marriage and family therapists, certified clinical addictions specialists, and licensed clinical supervisors may be self-referred. "3. Payments made for services rendered in accordance with this subdivision shall be qualified providers in accordance with approved policies and the State Plan. Nothing in sub-sub-subdivisions 1. or 2. of this sub-subdivision shall be interpreted to modify the scope of practice of any service provider, practitioner, or licensee, nor to modify or attenuate any collaboration or supervision requirement related to the professional activities of any service provider, practitioner, or licensee. Nothing in sub-sub-subdivisions 1. or 2. of this sub-subdivision shall be interpreted to require any private health insurer or health plan to make direct third-party reimbursements or payments to any service provider, practitioner, or licensee. "Notwithstanding G.S. 150B-21.1(a) , the Department of Health and Human Services may adopt temporary rules in accordance with Chapter 150B of the General Statutes further defining the qualifications of providers and referral procedures in order to implement this subdivision. Coverage policy for services established by the Division of Medical Assistance in consultation with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services under sub-subdivision a. and sub-sub-subdivision b.2. of this subdivision shall be established by the Division of Medical Assistance. "u. Experimental/investigational medical procedures. - Coverage is limited to services, supplies, drugs, or devices recognized as standard medical care for the condition, disease, illness, or injury being treated as determined by nationally recognized scientific professional organizations or scientifically based federal organizations such as the Food and Drug Administration, the National Institutes of Health, the Centers for Disease Control, or the Agency for Health Care Research and Quality. "v. Clinical trials. - The Division of Medical Assistance shall develop clinical policy for the coverage of routine costs in clinical trial services for life-threatening conditions using resources such as coverage criteria from Medicare, NC State Health Plan, and the input of the Physicians Advisory Group. "w. Organ transplants. "(3) Never Events and Hospital Acquired Conditions (HACs) shall not be reimbursed. Medicaid will adhere to Medicare requirements for definition of events and conditions." For prior similar provisions, see Session Laws 2007-323, s. 10.36(d), as amended by Session Laws 2007-345, ss. 1-3, and as amended by Session Laws 2008-107, s. 10.10(b), and Session Laws 2009-451, s. 10.58(d). Editor's Note. - This section was formerly G.S. 90-76.1 . It was recodified pursuant to Session Laws 1981 (Reg. Sess., 1982), c. 1188, s. 3, effective July 1, 1982. Session Laws 1983, c. 761, s. 60; 1983 (Reg. Sess., 1984), c. 1034, s. 62(h); 1985, c. 479, s. 86(g); 1987, c. 738, s. 67(g); 1989, c. 500, s. 70(g); 1991, c. 689, s. 93(f); 1991 (Reg. Sess., 1992), c. 900, s. 129; 1993, c. 321, s. 222(f); 1995, c. 324, s. 23.14(h); 1996, Second Extra Session, c. 18, s. 24; 1997-443, s. 11.11(h); 1999-237, s. 11.12(h); 2001-424, ss. 21.3(a) to (c), 21.19(h), as amended by 2002-126 s. 10.11(a); Session Laws 2003-284, s. 10.19(h); Session Laws 2005-276, s. 10.11(a)(5); and Session Laws 2006-66, s. 10.3(e), contained provisions similar to those in Session Laws 2007-323, s. 10.36(d), as amended by Session Laws 2007-345, ss. 1-3, and as amended by Session Laws 2008-107, s. 10.10(b). Session Laws 2006-66, s. 10.3(a), effective July 1, 2006, repealed Session Laws 2005-276, s. 10.11(a), pertaining to the dispensing of generic drugs. Session Laws 2011-145, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2011.'" Session Laws 2011-145, s. 32.2, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2011-2013 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2011-2013 fiscal biennium." Session Laws 2011-145, s. 32.5 is a severability clause. Effect of Amendments. - Session Laws 2015-27, s. 1, effective October 1, 2015, added subdivision (1) and redesignated former sudivision (1) as (1a); added subdivision (3a); and made minor stylistic changes throughout.