Procella HelpdeskThe ingredient cost edit is like the dispensing fee edit and borrows many of the same elements, especially around how the “formulas” are established.
There are 2 switches on the Ingredient cost edit that are easy to miss. Final Price Compare - GAD and U&C. These switches tell the process whether to compare the final calculated ingredient cost of the claim against the submitted Usual and Customary (U&C) and/or Gross Amount Due (GAD). If the switch is ON (highlighted) and this edit is used for the ingredient cost, the final price will be compared to the highlighted amount.
Subset Cost Option
The subset cost option allows the selection of the costs from the various outcomes of the rate rules. The options available include the lowest of the subset cost, the highest of the subset cost, or the first found of the subset cost.
While the first two are straightforward, taking the lowest or highest calculated cost of the ingredient subsets, the First Found requires some description.
When creating the subsets cost options and rate rules, there is an order to the formulas. When the cost in contract requires that, for instance, the CMS MAC/FFPUL is used. If there is no price for that NDC on the CMS MAC, use the PBM MAC price. The "first found rate rule" supports this.
Rate Rule Cost Option
The rate rule cost option is a group of formulas for various basis of cost. Examples of these basis include AWP, U&C, Direct Price, custom MAC lists, and WAC or wholesale acquisition cost.
Applicable Claim Types
Another option within the ingredient cost is whether the basis cost is used for Single Ingredient Claims, Compounds, or both. Some basis of cost can only be used for Single Ingredient claims. U&C and Gross Amount Due are total dollar amounts and, as compounds are calculated at the ingredient level, U&C and GAD are only available for final price comparisons.
Rate Rule
- A Rate Rule reflects a single ingredient calculation. A Rate Rule includes the inputs on how the ingredient cost is calculated. A Rate Rule would include: Cost Basis, Fixed (Flat) Amount adjustment, % Amount adjustment, Minimum Change, Maximum Change, and a calculation option. Additional options include whether the Rate Rule applies to Compound Claims, Non-Compound Claims, or both.
- There are two fields associated with FLAT AMOUNT. One is the numeric sign, +/-/none. If the flat amount of the ingredient cost is positive, select +. If negative, select -. If there is no flat amount component to the ingredient cost use none (which will be empty). If a flat amount is to be used, enter it into the FLAT AMOUNT field.
- There are two fields associated with % AMOUNT, or percentage amount. One is the numeric sign, +/-/none. If the % amount of the ingredient cost is positive, select +. If negative, select -. If there is no % amount component to the ingredient cost use none (which will be empty). If a % amount is to be used, enter it into the % AMOUNT field.
- If a combination of both flat amount and % amount are used to calculate the ingredient cost, then we need to select how the values to be used in the calculation. This can be selected in the calculation type field of the ingredient cost calculation. The options are to calculate the fixed amount first and then the % amount or % amount first and then the flat amount.
- MIN AMOUNT is required when a % AMOUNT is used. The minimum amount must be at least $0.01 and not exceed the MAX AMOUNT.
- The MAX AMOUNT is required when a % AMOUNT is used. The maximum amount must be greater than the minimum amount.
- Calculation Type
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$ then %: ((base + flat)*percent) + flat + base = $ % then $: ((base * percent) + flat) + base = $ |
Subset: A Subset is a collection of rate rules.
Subset Cost Option: The Cost Option helps to select a final cost from the outcome of each subset. The options for the selection are: Lowest, First Found, Highest.
Tiered by Days Supply: Tiers are only available when the Calculation Type is Day Supply. Up to 5 tiers for days supply can be established. The last tier must have a valid end value for the record to be saved.
Type: Ingredient Cost can be based on a Days Supply approach or a straight, fixed approach. The fixed approach is the straightforward calculation of ingredient cost based on the quantity of the claim. For the Days Supply approach, we use the days supply value on the claim to determine the correct tier for the ingredient calculations.
Brand Class: The standard brand classes may each have their own ingredient calculations. Each Brand Class, including a DEFAULT, Brand-MS, Brand-SS, Generic-MS, Generic-SS.
Note:
- Ingredient cost from a rate rule will be calculated only when we have a non-zero unit price for the drug. The system will continue iterating to the next rate rule and then to rate rules in the default until it finds a non-zero unit cost for the drug.
Consider an Ingredient cost edit is set up as below,
The WAC unit price of the drug is 0.000000 in this case
So in this case, the Ingredient Cost is calculated based on the next rate rule mentioned in the Ingredient edit (as per the above screenshot, AWP will be considered). If the AWP price of the drug is 0$ then it will iterate to the rate rule setup in DEFAULT.
- If the system cannot calculate the ingredient cost due to 0$ unit price, then the 'submitted usual & customary' is used as the Ingredient cost for the claim. In this case, the dispensing fee will be 0$.
- Some drugs may not have MAC unit price, in such cases - if the system cannot calculate the ingredient cost even after looping through the rate rules, then the claim will be rejected with 99 - Host Processing Error with an additional message as 'No ingredient cost calculated'
- A 100% discount can still be achieved to get a 0$ ingredient cost.
- If the final price compare toggles are enabled, the final claim cost will be compared with the enabled parameter values to use the lowest amount in the claim. For example, say GAD is enabled in final price compare. If UC price is used in the claim due to 0$ drug unit price, then UC and GAD will be compared, lowest price will be used in the claim.
