1. (a) The maximum allowable reimbursement (MAR) for prescription drugs shall be the lesser of:

   1. (1) The provider's usual and customary charge for the same or similar service;

   2. (2) The fees established by the following formulas based on the average wholesale price (AWP) determined by utilizing a nationally recognized pharmaceutical reimbursement system (e.g. Redbook, First Data Bank Services) in effect on the day the prescription drug is dispensed.

      1. (A) Generic drugs: ((AWP per unit) x (number of units) x 1.25) + $4.00 dispensing fee = MAR;
      2. (B) Brand name drugs: ((AWP per unit) x (number of units) x 1.09) + $4.00 dispensing fee = MAR;
      3. (C) A compounding fee of $15 per compound shall be added for compound drugs; or
   3. (3) A negotiated or contract amount.
2. (b) When the doctor has written a prescription for a generic prescription drug or a prescription that does not require the use of a brand-name drug, in accordance with §134.502(a)(3), the pharmacist shall dispense and be reimbursed for the generic pharmaceutical medication.
3. (c) Reimbursement for over-the-counter medications shall be the retail price of the lowest package quantity reasonably available that will fill the prescription.
4. (d) This section applies to the dispensing of all drugs except inpatient drugs and parenteral drugs.
5. (e) Upon request by the provider, the insurance carrier shall disclose the source of the AWP used.

Source Note:The provisions of this §134.503 adopted to be effective January 3, 2002, 26 TexReg 10970.