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Drug and Immunization Pricing

Reimbursement Policy:
Drug and Immunization Pricing

Effective Date:
March 15, 2016

Last Reviewed Date:
March 23, 2023

Provide guidelines for the pricing of drugs and immunizations. This policy applies to professional providers.

All products are included, except

  • Products where Horizon BCBSNJ is secondary to Medicare (e.g. Medigap).
  • COB

All Insured and Administrative Services Only (ASO) accounts are included.

Horizon BCBSNJ reimburses professional providers for drugs and immunizations based on submitted CPT® and HCPCS procedure codes.

Multiple sources are used to determine allowed amounts for drugs and immunizations provided by professional providers to our members, in accordance with the following hierarchy:

  • Source 1
    Horizon BCBSNJ has developed fees for some services in the following categories: drug administration, Lupron, IUD, Zoladex, Remicade, Methadone, Tetanus, contraceptive pills, and radiopharmaceuticals. If a drug/price is not found in the internal Horizon BCBSNJ pricing source, Horizon BCBSNJ relies on Source 2.
  • Source 2
    Magellan Rx Management provides Average Wholesale Pricing (AWP), Average Sale Pricing (ASP) or a Maximum Allowable Cost pricing (MAC) on a quarterly basis for drugs and immunizations. If a drug/price is not found in this source, Horizon BCBSNJ relies on Source 3.
  • Source 3 Direct or indirect written communication from drug manufacturers
    Indirect communication can come from physicians or professional associations (e.g., the American Academy of Pediatrics, NJ Chapter). If a new vaccine is recommended by the American Academy of Pediatrics, the Advisory Committee on Immunization Practices, or the U.S. Preventative Services Task Force, the effective date of Horizon BCBSNJ’s pricing for that vaccine is that communicated by the recommending entity. If a drug/price is not found via this source, Horizon BCBSNJ relies on Source 4.
  • Source 4 Industry pricing
    CMS (Average Sale Price) is the most common type of industry pricing. If a drug/price is not found via this source, Horizon BCBSNJ relies on Source 5.
  • Source 5 Internal price development

    As a source of last resort, if pricing is not found in any of the above listed sources, Horizon BCBSNJ will develop an allowance based on pharmacy cost and actuarial risk modeling.

    Pricing activity is prospective and is based on available implementation timeframes, unless an error was made by Horizon BCBSNJ. If Horizon BCBSNJ is at fault, Horizon BCBSNJ will mediate the erroneous activity and initiate the reprocessing of impacted claims. This activity is the responsibility of the Reimbursement Implementation unit, who is responsible for communication of the activity to the Reimbursement Workgroup to enable communication with the Network and with Service Operations.

The above-listed procedure requires specific approval from the Reimbursement Workgroup if one or more of the following occur:

  • There is a change to an industry pricing source or methodology that would impact a change to Horizon BCBSNJ developed pricing (see Source 1 above) Manufacturer or professional associations provide pricing (see Source 3 above) Pricing will be retroactively effective

Limitations and Exclusions:
While reimbursement is considered, payment determination is subject to, but not limited to:

  • Group or Individual benefit
  • Provider Participation Agreement
  • Routine claim editing logic, including but not limited to incidental or mutually exclusive logic, and medical necessity
  • Mandated or legislative required criteria will always supersede.

3/1/2007: Policy approved
3/15/2016: Removed sources no longer used (including ICore, OncoMetrics, MicroMix, and Redbook) and added new source (Magellan Rx Management).
4/23/2018: Empire Medicare removed from Source 4.

CPT is a registered mark of the American Medical Association.

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