Usual and Customary

The "Usual and Customary" (UAC) field (426-DQ) captures the amount requested for reimbursement. The usual and customary price is the price most frequently charged to the general public for the same drug.

  • Refer to TAC Section 355.8544 (Subchapter J: Usual and Customary Prices).
  • Any person whose prescription is not paid for by a third-party payor, such as a health insurer, governmental entity, or Texas Medicaid, is a member of the general public.
  • Pharmacies cannot exclude discount prices given to customers from its determination of the most frequently charged price for the same drug when reporting the UAC price to Texas Medicaid on a claim transaction. If a discount price is advertised for a drug then the discount price must be reported to Texas Medicaid as the UAC price for the same drug, unless the most frequently charged price is lower.
  • “Opt-in” requirements to obtain discount prices (such as requiring the customer to possess or present a special identification card or to make a request for a discount) do not exclude a person from the general public for purposes of determining the UAC price to report to Texas Medicaid.

Claims submitted with an UAC value greater than or equal to $10,000 will reject with NCPDP code “DQ” (“M/I Usual and Customary Charge”), and the dispensing pharmacy must contact VDP for an override. Refer to the Pharmacy Claim Processing section to contact the Pharmacy Benefits Access Help Desk.

If the submitted Usual and Customary or Gross Amount Due values are less than the allowed charge for the claim, HHSC will pay the lesser of the two (minus any copay).

Refer to the Enrollment section for information on reporting the UAC price for pharmacy discount membership programs and third-party discount plans.

Most Frequent Price Determination

HHSC requires pharmacies to determine the price the pharmacy most frequently charges for the same drug, which means the pharmacy is required to consider past-pricing data in actual transactions with uninsured customers to determine the most frequent (or mode) price for the same drug. The median price is used if a most frequent price cannot be determined.

A given drug is the same drug whether it is dispensed in a single unit or in multiple units, and HHSC requires a pharmacy to consider all transactions for the same drug as the Medicaid claim when determining the most frequent price, regardless of the quantity dispensed. To determine the most frequent price for the same drug across transactions with multiple different dispensed quantities, a pharmacy should:

  1. Calculate the unit price for each uninsured transaction for the same drug
  2. Determine the most frequent unit price for the same drug in its uninsured transactions.
  3. Multiply the most frequent unit price for the drug by the quantity of the same drug being dispensed in the Medicaid claim.

The result will be the UAC price, (unless an advertised discount price for the same drug would be lower).

TAC Section 355.8544 is silent regarding the time period of actual transactions in past-pricing data before the Medicaid claim a pharmacy should consider when determining the most frequent price. Accordingly, a reasonable time period should be used. To be reasonable, the period must be of sufficient duration to be likely to capture multiple uninsured transactions for each drug in the portfolio of drugs dispensed by the pharmacy during the period. HHSC presumes a period between thirty (30) to ninety (90) days would be reasonable. A period only considering uninsured transactions on the same day as the Medicaid claim would not be reasonable, because it would render the frequency determination meaningless. To be reasonable, the period a chain pharmacy uses to calculate the most frequent price at a single pharmacy location in Texas would likely need to be longer than if the chain considered past pricing data across multiple Texas pharmacy locations within the chain.