Regulatory Update

by myMatrixx

State of California Approves Change to AAC from AWP in 2012

Many states have been examining whether to replace Average Wholesale Price (AWP) with Average Acquisition Cost (AAC) and recently California was one of the first states to approve the change set to take effect in February or March of 2012.

Until the AAC rate goes into effect, the Division of Workers’ Compensation will continue to base the pharmacy fee schedule on AWP rates. First Data Bank, which supplies AWP data to the state, stopped publishing AWP rates on September 28, 2011 due to the change. However In order to maintain the pharmaceutical fee schedule until the average acquisition cost methodology is implemented, the “Health Trailer Bill,” was adopted to give the Department of Health Care Services authority to arrange for First Data Bank to continue to supply weekly pharmaceutical fee files using the same methodology that had been used while AWP was being published.

What does this mean for our clients? If you have transactions in California it will be business as usual until the new rate is implemented in early 2012. Once the new fee schedule takes effect, myMatrixx clients will not see any changes in their workers’ compensation pharmacy claims as our systems are already configured to handle and process any published rate including AAC. As other states move to AAC myMatrixx will be prepared as well making the switch seamless for our clients.

As more information becomes available on the topic in California and other states, myMatrixx will inform you. For more information on the recent announcement, click here.