[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Page 29882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11624]



VA's Indian Health Service/Tribal Health Program Reimbursement 
Agreements Program--Pharmacy Reimbursement Rate for the Lower 48 States

AGENCY: Department of Veterans Affairs.

ACTION: Notice of Tribal Consultation Session.


SUMMARY: VA, Veterans Health Administration (VHA) will facilitate a 
tribal consultation regarding VA's Indian Health Service/Tribal Health 
Program (IHS/THP) Reimbursement Agreements Program. VA is seeking input 
on adopting a pharmacy reimbursement rate for the lower 48 states.

DATES: Comments must be received by VA on or before July 5, 2021.

ADDRESSES: Comments may be submitted to 
[email protected] or by mail at Department of 
Veterans Affairs, Suite 915L, 810 Vermont Avenue NW, Washington, DC 

Manager, VA Office of Community Care, at [email protected], or 
by telephone at 303-780-4826. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Utilizing the authorities found in 25 U.S.C. 
1645(c), Sharing Arrangements with Federal Agencies, and 38 U.S.C. 
8153, Sharing of Health-Care Resources, VA, IHS and Tribal health care 
providers have created the IHS/THP Reimbursement Agreements Program. 
This program provides a means for IHS and THP health facilities to 
receive reimbursement from VA for direct care services, including 
pharmaceutics, provided to eligible American Indian/Alaska Native (AI/
AN) Veterans. Currently, reimbursement agreements under this program 
state that VA will reimburse ``actual costs'' for pharmaceuticals. In 
implementing this requirement, VA has realized that this term, ``actual 
costs,'' may be ambiguous and has led to difficulties in administering 
the agreements in compliance with applicable laws. VA is considering 
replacing the term ``actual cost'' with a more recognizable and easily 
calculated rate. Selecting an industry standard pharmaceutical rate 
structure would benefit IHS/THP sites by making it easier to understand 
and predict the reimbursement rate by eliminating the need to calculate 
actual cost.
    VA is proposing two distinct pharmacy payment rates for IHS and THP 
facilities. For IHS facilities, VA has collaborated with IHS to use the 
Federal Supply Schedule (FSS) or other established contract vehicles 
(i.e., joint national drug contracts) pharmaceutical pricing as the 
proposed reimbursement rate, as most of their pharmaceuticals are 
purchased using the FSS contract or other contract vehicles. The FSS 
contract and other contract vehicles are collectively referred to as 
the FSS rate. For those pharmaceuticals not available on FSS, or non-
contracted drugs, claims will be paid based on the adopted rate that is 
agreed upon with THPs.
    For THP facilities, VA is suggesting using one of two industry-
standard pharmacy reimbursement methodologies. These proposed 
methodologies are: (1) Wholesale Acquisition Cost (WAC) plus dispensing 
fee and (2) Average Wholesale Price (AWP), minus discount, plus 
dispensing fee.
    This written tribal consultation is seeking input on the preferred 
pharmacy reimbursement rate from the options above. VA suggests the 
following questions for response:
    (1) For the rates for THP facilities, what is your preferred 
methodology, WAC plus dispensing fee, or (2) AWP, minus discount, plus 
dispensing fee.
    (2) For the rates for THP facilities, if you identify AWP as the 
preferred method, what would you propose as the AWP discount percent 
rate for generic drugs and name brand/specialty drugs? How did you 
calculate or determine the proposed discount percent rate?
    (3) For THP dispensing fee, VA proposes to adopt an amount in line 
with industry standard, which is generally less than $1.00 per drug, to 
be applied to either selected rates (WAC or AWP). Do you agree with 
$1.00 per drug for a dispensing fee? If not, what do you propose the 
dispensing fee should be? How did you calculate or determine the 
proposed dispensing fee?
    (4) Do you have any comments on pharmacy reimbursement rates for 
IHS facilities and/or the related claims submission and reimbursement 

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on May 26, 2021, and authorized the undersigned to sign and 
submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.
[FR Doc. 2021-11624 Filed 6-2-21; 8:45 am]