Traditional MedicareCoverageHigh impact
Newsletter Vol. 15, No. 18
New Jersey Medicaid·NJ · Pharmacy, Geriatrics·Provider Notice
Effective date
Jan 1, 2006
We identified it
Jun 20, 2026
Summary
Effective January 1, 2006, New Jersey Medicaid will discontinue providing prescription drug benefits for full-benefit dual eligibles (Medicare + Medicaid clients), shifting primary responsibility to Medicare Part D Prescription Drug Plans (PDPs). Medicaid will only cover specific drug classes exempt from Part D (benzodiazepines, barbiturates, certain vitamins) and offer a 'wraparound' program for drugs denied by PDPs. Pharmacies must submit claims first to the PDP, then to Unisys (Medicaid fiscal agent) for secondary/wraparound coverage using NCPDP denial code 'AC'.
Action Required
By January 1, 2006: (1) Billing team must update pharmacy billing software to route all claims for dual-eligible beneficiaries to the Medicare Part D PDP as primary payer first; (2) Configure system to accept PDP claim responses and identify NCPDP denial code 'AC' for non-formulary denials; (3) Update claim submission workflow to route denied claims to Unisys (Medicaid) as secondary/wraparound claims only after PDP denial; (4) Remove capitation payment processing for dual-eligible long-term-care pharmacy services and switch to fee-for-service reimbursement (lower of usual and customary or AWP minus 12.5% plus $3.73-$4.07 dispensing fee) for exempt drugs only; (5) Train pharmacy staff and providers that dual-eligible clients must use PDP-participating network pharmacies exclusively—non-network claims will not be reimbursed by Medicaid; (6) Implement 6-day emergency supply logic in system for non-formulary drugs (unlimited for antibiotics); (7) Configure system to process wraparound claims only for drugs listed in Attachment A Table 1 (no prior auth required) or Table 2 (prior auth required from State); (8) Update provider/pharmacy notices and client communications regarding PDP assignment, formulary verification, and 30-day PDP change windows. Failure to route claims correctly will result in denials and loss of reimbursement.