Medicaid VDP Switches to Cost-Avoidance Reimbursement Model

Effective January 20, 2009, the Texas Medicaid Vendor Drug Program (VDP) will implement a cost avoidance coordination of benefits model for pharmacy claims. As a VDP provider, you will be required to bill any other known insurance before VDP will process submitted claims.

The Centers for Medicare and Medicaid Services mandates that state Medicaid agencies be the payer of last resort. In order to ensure compliance with this directive, VDP will transition from a retroactive pay-and-chase model to a point-of-sale cost avoidance coordination of benefits model. As of January 20, 2009, any claim submitted for a recipient with other known insurance will be rejected at the point of sale. Pharmacies will be provided with the third-party billing information needed for claims submission to the other payer. Claims will continue to be rejected until all other known payers have been billed. If the claim is rejected by the third- party insurer, VDP may still pay the claim, depending on the reason for the rejection.

VDP will continue coordination of benefits (COB claim payments) for clients with third-party insurance coverage. The pharmacy provider is to accept the combined payment from the other payer(s) and Texas Medicaid as payment in full and may neither charge nor take other recourse against the client. Please refer to the VDP Pharmacy Provider Handbook - 48ØØ Limitations on Provider Charges to Recipients - on our website at www.txvendordrug.com/about.html.

Prescriptions reimbursable by Medicare Part D are not eligible for additional reimbursement through Medicaid. Coordination of benefits claims paid by Texas Medicaid will count toward the prescription limit for those clients limited to three prescriptions per month. Medicaid recipients will continue to receive their medications, with no out of pocket expenses.

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