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Policy and Practice Updates

Court ruling may impact drug and injectable

The reimbursement levels for some drugs and injectables you administer may change.

These changes result from a recent court-approved settlement of a lawsuit filed against First DataBank and will take place in the timeframes outlined below. Because we contract with First DataBank for average wholesale price (AWP) information of certain drugs and injectables, the reimbursement amounts for some drugs and injectables you administer may change.

How this change will affect payments First DataBank will reduce the AWP of approximately 1,400 National Drug Codes (NDCs) to a new rate of 1.2 times the wholesale acquisition cost. The company also will adjust the AWP of other drugs not specifically addressed in the settlement to 1.2 times the wholesale acquisition cost.

Coverage determinations and utilization management

Evidence-based clinical guidelines from nationally recognized authorities are the guide we use for utilization management (UM) decisions.

Specifically, we review any request for coverage to determine if the member is eligible for benefits, if the service requested is a covered benefit under the member’s plan and if the service delivered is consistent with established guidelines. The member (or a physician acting on his/her behalf) may appeal this decision through our complaint and appeal process if a coverage request is denied.

Our UM staff help our members access services covered under their benefits plans. We do not reward physicians or individuals who conduct utilization reviews for creating barriers to care or for issuing coverage denials.


Your average reimbursement for these codes may decrease as a result of the new pricing. However, it is not possible to estimate the potential impact of this new pricing calculation because the revised pricing will depend on the manufacturer’s wholesale acquisition cost when First DataBank performs the calculation.

First DataBank’s revised AWP prices will impact claims processed using:


NDCs for dates of service on or after September 26, 2009


CPT4 and /or HCPCS codes beginning in the first quarter of 2010 and in conjunction with your standard fee schedule update

Fee schedules using other pricing sources, such as Medicare ASP and acquisition-based pricing, will not be impacted by this change for the services priced using these sources.

Find more information about the settlement at www.firstdatabank.com.



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