MedicaidReimbursementMedium impact
MMP 24-12: Drugs and Therapeutics Carved Out of Hospital Diagnosis Related Group (DRG) Payment
Michigan Medicaid - MDHHS·MI·Claims & Billing
Effective date
Oct 1, 2023
We identified it
Jun 20, 2026
Summary
Michigan Medicaid now allows separate reimbursement for certain high-cost drugs and therapeutics outside of hospital DRG payments, effective October 1, 2023. Claims must be submitted as either professional or pharmacy claims through Fee-for-Service, and prior authorization is required when hospitals purchase drugs directly.
Action Required
Immediately: Billing teams at Michigan hospitals must identify carved-out drugs from the MDHHS Inpatient Hospital website and establish workflows for separate billing. For direct drug purchases, obtain prior authorization via CHAMPS DDE or form MSA-6544-B before submitting professional claims with Place of Service code 21. Include appropriate HCPCS Level II codes and NDCs. For specialty pharmacy drugs, coordinate with pharmacy for claim submission. Update billing processes to avoid claim duplication between professional and pharmacy claims.