CMS Issues Final Rule on Standards for Electronic Pharmacy Transactions and Medicaid Pharmacy Subrogation

On Dec. 12, 2024, the Centers for Medicare and Medicaid Services (CMS) issued a final rule titled, “Modifications of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) Retail Pharmacy Standards; and Modification of the Medicaid Pharmacy Subrogation Standard” (Final Rule).

Standards for Retail Pharmacy Electronic Transactions

• The Final Rule adopts updated versions of the retail pharmacy standards for electronic transactions. The following updated standards are being adopted:
  • NCPDP Telecommunication Standard Implementation Guide Version F6 (Version F6), and 
  • Equivalent Batch Standard Implementation Guide, Version 15 (Version 15)
• These standards are for the following communications between health providers that dispense prescription drugs and health plans: 
  • health care claims or equivalent encounter information, 
  • eligibility for a health plan, referral certification and authorization, and
  • coordination of benefits.
• The purpose of adopting the modified standards is to:  
  • accommodate drug therapies priced at or in excess of $1 million, 
  • include information for prior authorizations, 
  • enhance the drug utilization review (DUR) fields, and 
  • include new coordination of benefits segment fields to aid in the identification of the previous payer and its program type, and to eliminate the need for manual processes to identify this information. 
• These updated standards will replace the currently adopted NCPDP Telecommunication Standard Implementation Guide, Version D, Release 0 (Version D.0) and the equivalent NCPDP Batch Standard Implementation Guide, Version 1, Release 2 (Version 1.2).  

Subrogation Standard 

• The Final Rule also adopts NCPDP Batch Standard Medicaid Subrogation Implementation Guide, Version 3, Release 0 (Version 3.0).  
  • This is intended to support Federal and State requirements for State Medicaid agencies to seek reimbursement from the health plan after the State Medicaid agency has paid the pharmacy claim on behalf of the Medicaid recipient.  
  • This replaces NCPDP Batch Standard Medicaid Subrogation Implementation Guide, Version 3, Release 0 (Version 3.0). 
• CMS originally proposed broadening the scope of the pharmacy subrogation transaction to apply to all health plans, rather than just State Medicaid agencies. However, that proposal was not finalized in this Final Rule and the updated standard applies to state Medicaid agencies only.

Effective and Compliance Dates 

• The Final Rule is effective February 11, 2025. 
• The following compliance dates apply: 
  • Version F6 and Version 15  
    • There will be an 8-month transition period starting August 11, 2027, during which covered entities, as agreed with trading partners, may use either the prior Version D.0 and Version 1.2 or the new Version F6 and Version 15.  
    • Full compliance with Version F6 and Version 15 is required by February 11, 2028.  
  • Version 10  
    • Version 10 is being adopted to apply solely to State Medicaid agencies. There will be an 8-month transition period starting August 11, 2027, during which State Medicaid agencies, as agreed with trading partners, may use Version 3.0 or Version 10.  
    • State Medicaid agencies must comply with Version 10 beginning February 11, 2028.

More on This Topic:

• Final Rule

For questions, please reach out to Vicky Jucelin.