What are the Reimbursement Rules for Dispensed Medications in Michigan?

Compliance Corner

What does Michigan require for reimbursement of dispensed prescription medications? Thanks to Simply Research, here's a guide.

AWP Minus 10%

Prescription medication must be reimbursed at the average wholesale price minus 10%, as determined by Red Book or Medi-Span plus a dispense fee. All of the following apply to reimbursements:

Brand name: The dispense fee for a brand name drug is $3.50.

Generic: The dispense fee for a generic drug is $5.50.

Repackaged pharmaceuticals: Reimbursement for repackaged pharmaceuticals is at a maximum reimbursement of AWP minus 10% based on the original manufacturer’s NDC number, as determined by Red Book or Medi-Span, plus a dispensing fee of $3.50 for brand name and $5.50 for generic. All pharmaceutical bills submitted for repackaged products must include the original manufacturer or distributor stock package NDC number.

NDC not available: When an original manufacturer’s NDC number is not available in either Red Book or Medi-Span and a pharmaceutical is billed using an unlisted or not otherwise specified code, the payer shall select the most closely related NDC number to use for reimbursement of the pharmaceutical.

Over the counters: OTCs dispensed by a provider other than a pharmacy, must be dispensed in 10-day quantities and be reimbursed at the average wholesale price, as determined by Red Book or Medi-Span, or $2.50, whichever is greater.

Topicals: All commercially manufactured topical medications that do not meet the definition of custom compound dispensed by a pharmacy or a provider, must not exceed a 30-day supply. Regardless of the dispensing party, reimbursement is a maximum of the acquisition cost, plus a single dispense fee. The single dispense fee is $8.50. A provider shall only be reimbursed one dispense fee per topical medication in a 10-day period.

Office or clinic: Medications dispensed by a practitioner in an office or clinic setting must be reimbursed to the practitioner for the first 42 days after the inception of all medical care as provided for under section 315 of the act, MCL 418.315.

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