Maximum Allowable Charges (MAC)
On this site, you will find information on IEHP Maximum Allowable Charges (MAC) and the IEHP MAC list. IEHP Maximum Allowable Charges are applied to generically approved drug products with therapeutic equivalent evaluations rated by the FDA or similar nationally recognized pricing reference. Please note that the IEHP MAC does not apply to any IEHP Medicare line of business. IEHP Medicare line of business currently utilizes the ARGUS National Network MAC (please refer to your contractual agreements with ARGUS for any disputes in pricing).
Since pharmacy acquisition costs are considered proprietary information, and there is no MAC reference that is considered to be the “gold standard” for reimbursement purposes, IEHP has contracted with GlassBox Analytics’ Predictive Acquisition Cost (PAC) program to generate a custom MAC list. The IEHP MAC list is developed based on the acquisition cost analysis provided using Predictive Acquisition Cost (PAC) Model and is fully transparent. The PAC model applies a unique predictive analytics model and takes into account of industry MAC benchmarks, published price lists, existing pricing benchmarks, behavioral metrics, supply/demand measures, and survey-based acquisition costs. This model allows IEHP to create a more accurate pricing model for generic drugs utilizing recent pricing changes.
MAC Review Process:
To comply with Assembly Bill No. 627, or the amendments to California Business and Professions Code, Division 2, Chapter 9.5 Audits of Pharmacy Benefits, Sections 4430, 4432, and 4440, IEHP is updating its current MAC policy with an effective date of January 1, 2016.
IEHP understands the importance of the accuracy and timeliness of Maximum Allowable Charges (MAC) update process, and based on the above regulation, has increased the frequency of the IEHP MAC drug price review from once every one month to once every seven days.
A drug is included on IEHP MAC list if:
- The drug is listed as “A” or “B” rated in the most recent version of the federal Food and Drug Administration’s approved drug products with therapeutic equivalent evaluations, also known as the Orange Book, or has an “NA,” “NR,” or “Z” rating or a similar rating by a nationally recognized pricing reference, such as Medi-Span or First DataBank.
- The drug is generally available for purchase in the state from a national or regional wholesaler.
- The drug is not obsolete.
Types of Appeals:
Appealing the disposition of MAC or Non-MAC Drug: If a contracting pharmacy believes a drug does not meet the requirements for a MAC drug, the pharmacy may appeal the drug and must submit evidence to support why the drug does not meet MAC drug requirements.
Appealing an existing MAC Price: A contracting pharmacy may appeal the MAC price for a drug on the IEHP MAC list if the MAC price of the drug is below the cost at which is the drug is available for purchase or acquisition cost. Pharmacy providers must submit wholesale invoice to support the case.
Timeframe for Appeals:
Pharmacies are allowed to appeal for a drug MAC no more than 14 days following receipt of payment for the claim.
IEHP will make a final determination within seven business days of the receipt of appeal.
If request is denied, IEHP will provide the reason of denial and the NDC of an equivalent drug that may be purchased at equal or less than the MAC.
If request is upheld, MAC for the drug will be updated within one calendar day of the date of determination. The appealing pharmacy may reverse and resubmit the claim upon which the appeal was based to receive the correct payment.
IEHP MAC dispute form
For appeals regarding the disposition of MAC or Non-MAC Drug: Evidence drug does not meet MAC drug requirements
For appeals regarding an existing MAC Price: Proof of acquisition cost at NDC level (i.e. wholesale invoice)
IEHP Review Process:
IEHP will review the MAC appeal request with the pricing information provided by our third party vendor which includes pricing information from various wholesalers. A request will be denied if the purchase cost of the drug is within the range of available purchase costs based on available market information. IEHP understands there will be variation of price based on different wholesalers and makes every effort to reimburse price fairly and competitively. However, we are not in a position to provide recommendations regarding a pharmacy’s procurement practices and will review price based on market information.
How to Appeal:
Pharmacy Providers must submit a MAC Dispute Resolution Request Form (effective 1/1/2016) AND required information to IEHP (via fax at 909-891-1577 or via email to MAC@iehp.org).
By implementing the procedure detailed above, IEHP anticipates that the most significant pricing changes will be acted upon timely. It is our goal to streamline this process and react to pricing changes proactively, and we are confident that pharmacy providers will get a fair reimbursement based on the current MAC structure.
If you have any questions, please feel free to contact the IEHP Pharmaceutical Services Department at 909-890-2049.
IEHP Maximum Allowable Charges (MAC) List:
12/10/2015 IEHP Maximum Allowable Charges (MAC) Policy Effective 1/1/2016
11/19/2014 IEHP MAC Policy Change
01/02/2014 IEHP Maximum Allowable Charges (MAC) Policy