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The Mississippi Supreme Court ruled that the Division of Medicaid (DOM) had exceeded its authority when it amended a rule that governed the pharmacy reimbursement methodology for generic drugs under its Medicaid program. Mississippi has used a reimbursement methodology that associates the rate and method of reimbursement with the pharmacists' estimate acquisition cost (EAC), among two other methods provided for in the statute. EAC has been used consistently and has always been defined in Mississippi as using the average wholesale price (AWP).
DOM had proposed to change the reimbursement methodology, as a cost-saving tool, to established maximum reimbursement amounts for equivalent groups of multiple-source generic drugs, where as many other states use a MAC program to contain costs. The lower court ruled that any change to the method for reimbursement must be sought through legislative action. The high court agreed and stated that "the statute does permit changes to the rates of reimbursement or payment without legislative amendment, but only when federal law so requires or whenever changes are necessary to correct administrative errors or omissions in calculating those payments or rates of reimbursement." Neither of the exceptions applied in this situation. The court stated that DOM has the limited authority to redefine the discount, or percentage subtracted from AWP. The court found that DOM had tried to change the manner in which EAC is calculated rather than simply redefine it, and such action falls outside the realm of DOM's authority. Mississippi Div. of Medicaid v. Mississippi Indep. Pharmacies Ass'n, No. 2008-SA-01245-SCT (Miss. Nov.12, 2009).
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