HCFA denial of AWP payments upheld

Fifth Circuit Court affirmed Health Care Financing Administration disapproval of Louisiana Medicaid agency drug reimbursements based on published average wholesale prices. HCFA "could disapprove" state payments, "even though Louisiana proved that its cost calculation method would not result in reimbursement" exceeding aggregate upper limits set by Medicaid regs of 1987. Louisiana had appealed HCFA's disapproval. However, the appellate court said its decision does not permit HCFA to impose uniform AWP-minus discount payments without notice and comment. It added that Louisiana would have prevailed "had it been able to prove that AWP did provide the closest" estimated acquisition cost.