N.Y. Comp. Codes R. & Regs. tit. 18, § 505.3 – Drugs.

(1) Compounded prescription means one in which two or more ingredients are mixed by the dispensing pharmacist. Medical assistance reimbursement for compounding is limited to the following:
1. (i) a combination of any two or more legend drugs found on the list of Medicaid reimbursable prescription drugs; or
2. (ii) a combination of any legend drugs included on the list of Medicaid reimbursable prescription drugs and any other item(s) not commercially available as an ethical or proprietary product(s); or
3. (iii) a combination of two or more products which are labeled “Caution: For Manufacturing Purposes only.” The reconstitution of a commercially available drug is not a compounded prescription.
(2) Drug means both prescription and nonprescription drugs.
(3) Drug acquisition costs means the invoice price to the pharmacy of a prescription drug dispensed to a Medicaid recipient, minus the amount of all discounts and other cost reductions attributable to such dispensed drug.
(4) Nonprescription drug means any drug for which a prescription is not required under section 6810 of the Education Law, including over the counter, pre-packaged items.
(5) Practitioner means a person licensed, authorized or otherwise permitted to write a prescription.
(6) Prescription drug means any drug for which a prescription is required under section 6810 of the Education Law.
(7) Written order or fiscal order are terms which are used interchangeably in this section and refer to any original, signed written order of a practitioner including any faxed transmitted order which requests a pharmacy to provide a drug to a medical assistance recipient. All written orders and fiscal orders shall comply with the provisions of section 21 of the Public Health Law and regulations promulgated thereunder or contained in this section including but not limited to requirements for prescribing brand necessary drugs.
(b) Written order required.
(1) Drugs may be obtained only upon the written order of a practitioner, except for non-prescription emergency contraceptive drugs as described in subparagraph (i) of this paragraph, and for telephone and electronic orders for drugs filled in compliance with this section and 10 NYCRR Part 910.
1. (i) Non-prescription emergency contraceptive drugs for females may be obtained without a written order subject to a utilization frequency limit of 6 courses of treatment in any 12-month period.
2. (ii) The ordering/prescribing of drugs is limited to the practitioner's scope of practice.
3. (iii) The ordering/prescribing of drugs is limited to practitioners not excluded from participating in the medical assistance program.
(2) All orders for drugs must show the ordering practitioner's name, address, telephone number, United States Drug Enforcement Agency (DEA) number (if applicable), and either the practitioner's MMIS provider identification number, the practitioner's license number or the certification number of the facility in which the drugs were ordered. All orders must also contain the name of the recipient for whom ordered.
(3) When used in the context of an order for a prescription drug, the order must also meet the requirements for a prescription under section 6810 of the Education Law and 10 NYCRR Part 910. When used in the context of a nonprescription drug, the order must also contain the following information: name of the drug; quantity ordered; strength or dosage; ingredient information, as necessary; directions for use; date ordered; and number of refills, if any.
(4) Telephone orders and for prescription drugs permitted to be filled by subdivision (4) of section 6810 of the Education Law and non-prescription drugs are permitted.
(5) A telephone order must be recorded by the pharmacy in the format required by subdivision (4) of section 6810 of the Education Law, recording the time of the call and the initials of the person taking the call and the dispenser, prior to dispensing the drug. The pharmacist must label the drug as he/she would a written prescription, and make a good faith effort to verify the practitioner's identity, and validity of the prescription if the practitioner is unknown to the pharmacist. The practitioner must expressly state whether substitution is permitted or prohibited.
(6) Effective April 1, 2005 an order which requests a pharmacy to provide a drug to a medical assistance recipient may be electronically transmitted unless otherwise prohibited by law or regulation. All written orders and all orders which are electronically transmitted must comply with the relevant provision of the State Education Law and all regulations promulgated thereunder. It is the responsibility of the pharmacist to make a good faith effort to verify the practitioner's identity and validity of the prescription if the practitioner is unknown to the pharmacist.
(7) On or after June 1, 2005 and after the department has provided advance written notice to appropriate providers, all claims for payment of drugs provided under this section and submitted to the Medical Assistance Program shall contain the serial number of the official New York State prescription form. Additionally, where serial numbers are available on official NYS prescription forms for items not required to be ordered or prescribed on such forms, the billing pharmacy provider must enter such serial numbers on pharmacy claims submitted for payment to the MA program.
(c) Where obtained.
Drugs may be obtained only from pharmacies which are properly registered by the State in which the pharmacy is located, or from the ordering practitioner. A pharmacy must keep on file the signed written order of the practitioner for audit by the department, or other authorized agency, for six years from the date of payment for any drug dispensed. A practitioner must annotate the patient record to reflect the dispensing of the drug and the quantity, dose, directions for use and number of refills, if any.
(d) Prescription refills.
(1) A written order may not be refilled unless the practitioner has indicated the number of allowable refillings on the order.
(2) No written order for drugs may be refilled more than 6 months after the date of issuance, nor more than 5 times within a 6-month period, with the exception of prescription contraceptives for family planning purposes, which may be filled 12 times within 1 year after the date of issuance.
(3) Refills must bear the prescription number of the original written order.
(e) Prescribed quantities.
(1) Drugs must be ordered in a quantity consistent with the health needs of the patient and sound medical practice.
(2) Dispensing limits for drugs.
1. (i) Except as provided in subparagraph (ii) of this paragraph, the maximum quantity of drugs dispensed is limited to the larger of:
  1. (a) a 30-day supply; or
  2. (b) 100 doses. One hundred doses is 100 units of a solid formulation.
2. (ii) The dispensing limit does not apply to long-term maintenance drugs. Long-term maintenance drugs are:
  1. (a) drugs ordered or prescribed with one or more refills in quantities of a 30-day supply or greater. The quantity ordered or prescribed must be based on generally accepted medical practice. The ordering practitioner must be contacted if dispensing the supply specified in the prescription would result in the medical assistance recipient receiving a quantity of drugs which exceeds the manufacturer's labeling indications; or
  2. (b) drugs ordered or prescribed without refills in quantities of a 60-day supply or greater. The quantity ordered or prescribed must be based on generally accepted medical practice. The ordering practitioner must be contacted if dispensing the supply specified in the prescription would result in the medical assistance recipient receiving a quantity of drugs which exceeds the manufacturer's labeling indications; or
  3. (c) drugs ordered or prescribed for family planning purposes. The quantity ordered or prescribed must be based on generally accepted medical practice. Prescription contraceptives for family planning purposes may be dispensed in a 12-month supply at one time; or
  4. (d) prescriptions written and dispensed on the official New York State prescription form for up to a three-month supply when written in conformity with the Controlled Substance Act (title IV of article 33 of the Public Health Law).
    (f) Payment for drugs.
(1) The reimbursement amounts are payment in full.
(2) Drugs provided by a practitioner and billed separately will be paid for at the actual cost to the practitioner.
(3) The department will pay each pharmacy enrolled in the MA program a dispensing fee for each prescription drug claim. Dispensing fees include routine delivery charges. The department will pay an additional compounding fee of $.75 for each compounded prescription drug claim. The additional dispensing fee for a compounded prescription drug claim will not be paid when a manufacturer's specialty drug is reconstituted or when a nonmedical or nontherapeutic agent is added to the prescription drug.
(4) Each pharmacy enrolled in the Medicaid program shall provide the department, in such manner, for such periods, and at such times as the department may require, with the drug acquisition costs, as defined in paragraph (a)(3) of this section, of prescription drugs.
(g) Limitations.
(1) The department will pay for therapeutic vitamins and specific vitamin preparations only when ordered by a physician for the treatment of deficiency states or pathological conditions requiring increased vitamins.
(2) The department will pay for amphetamine and amphetamine-like substances (congeners) only when used in outpatient treatment of conditions other than obesity or weight reduction.
(3) No payment will be made for any drug which has weight reduction as its sole clinical use. Payment for drugs used to promote fertility is limited to bromocriptine, clomiphene citrate, letrozole and tamoxifen, when receiving services pursuant to section 505.1(a)(1)(iii) of this Part, and subject to the FDA recommended and/or compendia-supported uses and limitations.
(4) From time to time the department may limit the frequency or the amount of drugs which may be ordered. The department may require prior approval or prior authorization of drugs. The department may allow for exceptions to prior approval or prior authorization requirements in emergency circumstances. Emergency circumstances for purposes of this paragraph means any condition requiring alleviation of severe pain or which threatens to cause disability or take life if not promptly treated. The department will advise practitioners and pharmacies in writing before any reduction in frequency or amount, prior authorization or prior approval is imposed on any drug.
(h) Utilization threshold.
(1) This subdivision describes the utilization threshold that the department has established for pharmacy services. Part 503 of this Title authorizes the department to establish a utilization threshold for specific provider service types, including pharmacy services. Part 503 also describes the application of the utilization threshold, services and procedures excluded from the utilization threshold for all provider service types subject to a threshold, the method for obtaining an exemption from or increase in the utilization threshold, notices, and the right to a fair hearing in certain situations.
(2) General rules.
1. (i) Federally nonparticipating persons. Payment will be made for up to 43 pharmacy service formulary codes in a benefit year for persons who belong to a group listed in section 360-3.3(a)(1) or (b)(7) of this Title.
2. (ii) Federally participating persons. Payment will be made for up to 60 pharmacy service formulary codes in a benefit year for persons who belong to a group listed in section 360-3.3(a)(2)-(6), (b)(1)-(6) or (3) of this Title.
(3) Formulary codes. As used in this subdivision, a formulary code is defined as follows:
1. (i) for prescription drugs, the first time a prescription is filled is one formulary code; each refill of the original prescription is also one formulary code; and
2. (ii) for nonprescription drugs and medical and surgical supplies, each initial fiscal order for the drug or supply is one formulary code; each refill of the fiscal order is also one formulary code.
(i) The department may, after completing a competitive request for proposal (RFP) process, contract with mail-order pharmacies or their corporate owners to supply prescription and nonprescription drugs and medical/surgical supplies by mail to medical assistance (MA) recipients. The department may elect to offer mail-order pharmacy services in one or more social services districts through a contractor selected after completion of the RFP process. Individuals who are furnished MA by such districts who are not restricted in their access to drugs or medical/surgical supplies and who are not patients in residential health care facilities or any other facilities which have pharmaceuticals included in their medical assistance payments may choose to receive long-term maintenance drugs, excepting drugs prohibited pursuant to article 33 of the Public Health Law, nonprescription drugs and medical/surgical supplies by mail from contractors selected through the RFP process to provide such drugs and supplies.

(a) Definitions.