§ 250. Reimbursement to participating provider pharmacies. 1. The
amount of reimbursement which shall be paid by the state to a
participating provider pharmacy for any covered drug filled or refilled
for any eligible program participant shall be equal to the allowed
amount defined as follows, minus the point of sale co-payment as
required by sections two hundred forty-seven and two hundred forty-eight
of this title:

(a) Multiple source covered drugs. Except for brand name drugs that
are required by the prescriber to be dispensed as written, the allowed
amount for a multiple source covered drug shall equal the lower of:

(1) The pharmacy's usual and customary charge to the general public,
taking into consideration any quantity and promotional discounts to the
general public at the time of purchase, or

(2) The upper limit, if any, set by the centers for medicare and
medicaid services for such multiple source drug, or

(3) Average wholesale price discounted by twenty-five percent, or

(4) The maximum allowable cost, if any, established by the
commissioner of health pursuant to paragraph (e) of subdivision nine of
section three hundred sixty-seven-a of the social services law.

Plus a dispensing fee for drugs reimbursed pursuant to subparagraphs
two, three, and four of this paragraph, as defined in paragraph (c) of
this subdivision.

(b) Other covered drugs. The allowed amount for brand name drugs
required by the prescriber to be dispensed as written and for covered
drugs other than multiple source drugs shall be determined by applying
the lower of:

(1) Average wholesale price discounted by sixteen and twenty-five one
hundredths percent, plus a dispensing fee as defined in paragraph (c) of
this subdivision, or

(2) The pharmacy's usual and customary charge to the general public,
taking into consideration any quantity and promotional discounts to the
general public at the time of purchase.

(c) As required by paragraphs (a) and (b) of this subdivision, a
dispensing fee of four dollars fifty cents will apply to generic drugs
and a dispensing fee of three dollars fifty cents will apply to brand
name drugs.

2. For purposes of determining the amount of reimbursement which shall
be paid to a participating provider pharmacy, the commissioner of health
shall determine or cause to be determined, through a statistically valid
survey, the quantities of each covered drug that participating provider
pharmacies buy most frequently. Using the result of this survey, the
contractor shall update every thirty days the list of average wholesale
prices upon which such reimbursement is determined using nationally
recognized and most recently revised sources. Such price revisions shall
be made available to all participating provider pharmacies. The
pharmacist shall be reimbursed based on the price in effect at the time
the covered drug is dispensed.

3. (a) Notwithstanding any inconsistent provision of law, the program
for elderly pharmaceutical insurance coverage shall reimburse for
covered drugs which are dispensed under the program by a provider
pharmacy only pursuant to the terms of a rebate agreement between the
program and the manufacturer (as defined under section 1927 of the
federal social security act) of such covered drugs; provided, however,
that:

(1) any agreement between the program and a manufacturer entered into
before August first, nineteen hundred ninety-one, shall be deemed to
have been entered into on April first, nineteen hundred ninety-one; and
provided further, that if a manufacturer has not entered into an
agreement with the department before August first, nineteen hundred
ninety-one, such agreement shall not be effective until April first,
nineteen hundred ninety-two, unless such agreement provides that rebates
will be retroactively calculated as if the agreement had been in effect
on April first, nineteen hundred ninety-one; and

(2) the program may reimburse for any covered drugs pursuant to
subdivisions one and two of this section, for which a rebate agreement
does not exist and which are determined by the commissioner to be
essential to the health of persons participating in the program; and
likely to provide effective therapy or diagnosis for a disease not
adequately treated or diagnosed by any other covered drug.

(b) The rebate agreement between such manufacturer and the program for
elderly pharmaceutical insurance coverage shall utilize for covered
drugs the identical formula used to determine the rebate for federal
financial participation for drugs, pursuant to section 1927(c) of the
federal social security act, to determine the amount of the rebate
pursuant to this subdivision.

(c) The amount of rebate pursuant to paragraph (b) of this subdivision
shall be calculated by multiplying the required rebate formulas by the
total number of units of each dosage form and strength dispensed. The
rebate agreement shall also provide for periodic payment of the rebate,
provision of information to the program, audits, verification of data,
damages to the program for any delay or non-production of necessary data
by the manufacturer and for the confidentiality of information.

(d) The program in providing utilization data to a manufacturer (as
provided for under section 1927 (b) of the federal social security act)
shall provide such data by zip code, if requested, for the top three
hundred most commonly used drugs by volume covered under a rebate
agreement.

(e) Any funds collected pursuant to any rebate agreements entered into
with a manufacturer pursuant to this subdivision, shall be deposited
into the elderly pharmaceutical insurance coverage program premium
account.

4. Notwithstanding any other provision of law, entities which offer
insurance coverage for provision of and/or reimbursement for
pharmaceutical expenses, including but not limited to, entities
licensed/certified pursuant to article thirty-two, forty-two,
forty-three or forty-four of the insurance law (employees welfare funds)
or article forty-four of the public health law, shall participate in a
benefit recovery program with the elderly pharmaceutical insurance
coverage (EPIC) program which includes, but is not limited to, a
semi-annual match of EPIC's file of enrollees against the entity's file
of insured to identify individuals enrolled in both plans with claims
paid within the twenty-four months preceding the date the entity
receives the match request information from EPIC. Such entity shall
indicate if pharmaceutical coverage is available from the entity for the
insured persons, list the copayment or other payment obligations of the
insured persons applicable to the pharmaceutical coverage, and (after
receiving necessary claim information from EPIC) list the amounts which
the entity would have paid for the pharmaceutical claims for those
identified individuals and the entity shall reimburse EPIC for
pharmaceutical expenses paid by EPIC that are covered under the contract
between the entity and its insured in only those instances where the
entity has not already made payment of the claim. Reimbursement of the
net amount payable (after rebates and discounts) that would have been
paid under the coverage issued by the entity will be made by the entity
to EPIC within sixty days of receipt from EPIC of the standard data in
electronic format necessary for the entity to adjudicate the claim and
if the standard data is provided to the entity by EPIC in paper format
payment by the entity shall be made within one hundred eighty days.
After completing at least one match process with EPIC in electronic
format, an entity shall be entitled to elect a monthly or bi-monthly
match process rather than a semi-annual match process.

5. Notwithstanding any other provision of law, the commissioner of
health shall maximize the coordination of benefits for persons enrolled
under Title XVIII of the federal social security act (medicare) and
enrolled under this title in order to facilitate medicare payment of
claims. The commissioner of health may select an independent contractor,
through a request-for-proposal process, to implement a centralized
coordination of benefits system under this subdivision for individuals
qualified in both the elderly pharmaceutical insurance coverage (EPIC)
program and medicare programs who receive medications or other covered
products from a pharmacy provider currently enrolled in the elderly
pharmaceutical insurance coverage (EPIC) program.

6. The EPIC program shall be the payor of last resort for individuals
qualified in both the EPIC program and title XVIII of the federal social
security act (Medicare).