(a) For purposes of this section, the following definitions shall apply:

(1) “Blood factors” has the same meaning as that term is defined in Section 14105.86.

(2) “Generically equivalent drugs” has the same meaning as that term is defined in Section 14105.45.

(3) “Legend drug” has the same meaning as that term is defined in Section 14105.45.

(4) “Medicare rate” means the rate of reimbursement established by the Centers for Medicare and Medicaid Services for the Medicare Program.

(5) “Nonlegend drug” has the same meaning as that term is defined in Section 14105.45.

(6) “Pharmacy rate of reimbursement” means the reimbursement to a Medi-Cal pharmacy provider pursuant to the provisions of paragraph (3) of subdivision (b) of Section 14105.45.

(7) “Physician-administered drug” means any legend drug, nonlegend drug, or vaccine administered or dispensed to a beneficiary by a Medi-Cal provider other than a pharmacy provider and billed to the department on a fee-for-service basis.

(8) “Volume-weighted average” means the aggregated average volume for generically equivalent drugs, weighted by each drug’s percentage of the total volume in the Medi-Cal fee-for-service program during the previous six months. For purposes of this paragraph, volume is based on the standard billing unit used for the generically equivalent drugs.

(b) The department may reimburse providers for a physician-administered drug using either a Healthcare Common Procedure Coding System code or a National Drug Code.

(c) The Healthcare Common Procedure Coding System code rate of reimbursement for a physician-administered drug shall be equal to the volume-weighted average of the pharmacy rate of reimbursement for generically equivalent drugs. The department shall publish the Healthcare Common Procedure Coding System code rates of reimbursement.

(d) The National Drug Code rate of reimbursement shall equal the pharmacy rate of reimbursement.

(e) Notwithstanding subdivisions (c) and (d), the department may reimburse providers for physician-administered drugs, with the exception of blood factors, at a rate not less than the Medicare rate.

(f) Physician-administered drugs that are blood factors shall be reimbursed pursuant to the provisions of subdivision (b) of Section 14105.86.

(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

(h) (1) The rates provided for in this section shall be implemented commencing January 1, 2011, but only if the director determines that the rates comply with applicable federal Medicaid requirements and that federal financial participation will be available.

(2) In assessing whether federal financial participation is available, the director shall determine whether the rates comply with the federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the extent that the director determines that a rate of reimbursement described in this section does not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(i) The director shall seek any necessary federal approval for the implementation of this section. To the extent that federal financial participation is not available with respect to a rate of reimbursement described in this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(Amended by Stats. 2017, Ch. 52, Sec. 28. (SB 97) Effective July 10, 2017.)