Providers
Drug Reimbursement Appeal Process – Act 570 Compliance
Effective Date: August 4, 2025
Policy Owner: Provider Compensation
Purpose
To establish a formal appeal process for contracted providers who believe they were reimbursed for a drug billed through the medical benefit at a rate below their actual acquisition cost, as required under Arkansas Act 570 of 2025 (AR H 1703). This policy ensures HEALTH ADVANTAGE complies with legislative mandates while promoting transparency and fairness in provider reimbursements.
Scope
This policy applies to:
- All HEALTH ADVANTAGE contracted providers
- Claims involving reimbursement for medications (NDC, CPT, or HCPCS-coded)
- All HEALTH ADVANTAGE lines of business and affiliates operating under Arkansas jurisdiction.
Definitions
- Acquisition Cost: The amount paid by the provider to purchase a drug, inclusive of rebates or discounts tied to volume-based purchasing.
- Contracting Entity: HEALTH ADVANTAGE or any PBM or administrator acting on HEALTH ADVANTAGE’s behalf.
- Appeal: A formal, provider-initiated request to review and adjust reimbursement when it is below acquisition cost.
Policy Statement
HEALTH ADVANTAGE shall allow any provider to file an appeal when they receive reimbursement for a drug at less than their acquisition cost. Upon a valid appeal, HEALTH ADVANTAGE must evaluate the claim, and if verified, adjust the reimbursement to no less than 110% of the actual acquisition cost, as required by law.
Procedures
5.1 Appeal Submission
Appeals must be submitted within 60 business days of the date of payment or denial.
Appeals must include:
- Provider identification (NPI, Tax ID, contact)
- Claim number(s), drug name, NDC, CPT, or HCPCS code
- Date of service and reimbursement amount
- Documentation of acquisition cost (invoice or receipt)
- Documentation of all rebates or discounts received
- Statement of discrepancy and requested resolution
Providers may submit appeals via:
- Secure Email: [email protected]
- Appeals Phone Line:501-393-0551
In the event that a retail pharmacy is requesting a reimbursement appeal for payment made under the pharmacy benefit, the pharmacy should be directed to reach out the Caremark through the following channels.
- Pharmacy Provider Portal – https://rxservices.cvscaremark.com/
- Pharmacy Help Desk 1-800-364-6331 (the help desk will direct the pharmacy to the provider portal with instructions)
- Consult the CVS Caremark Provider Manual
5.2 Internal Review Timeline
Appeals must be reviewed and resolved within 30 business days of receipt.
HEALTH ADVANTAGE will notify provider of:
- Approval and reimbursement adjustment, or
- Denial with rationale and any additional documentation needed
5.3 Reimbursement Adjustment
If appeal is approved:
- HEALTH ADVANTAGE shall reprocess the original claim at 110% of acquisition cost
- This updated reimbursement rate shall be applied to all subsequent claims for the same drug (identified by NDC, CPT, or HCPCS) for the remainder of the fiscal quarter.
If the appeal is initiated in the last month of the fiscal quarter, the adjusted rate will extend through the entire next fiscal quarter.
Quarterly Notification Option
Providers may proactively submit a quarterly list of drugs where acquisition cost exceeds contracted reimbursement. HEALTH ADVANTAGE may adjust rates to 110% of acquisition cost for those drugs, without requiring a formal appeal, for the duration of the current fiscal quarter.
Documentation and Retention
HEALTH ADVANTAGE will maintain:
- All submitted appeals, communications, decisions, and reimbursement adjustments
- Audit logs of responses and reprocessed claims
Records must be retained for six (6) years for audit and compliance purposes.
Member Appeals
This policy applies only to provider reimbursement appeals. Member-initiated appeals regarding coverage decisions or cost-sharing must follow the standard HEALTH ADVANTAGE internal appeals and grievance procedures.