Medicaid Acronym of the Day – AAC

Actual Acquisition Cost – In accordance with the Affordable Care Act and requirements of §447.512(b) of the final regulation, states’ reimbursement for ingredient costs for brand and certain multiple source drugs (that do not have a FUL calculated), will be established as an aggregate upper limit based on AAC, as opposed to an estimated acquisition cost. AAC is defined at §447.502 of the final regulation as the agency’s determination of the pharmacy providers’ actual prices paid to acquire drugs marketed or sold by specific manufacturers. CMS believes that changing this definition of
ingredient cost reimbursement to AAC will provide a reference price consistent with the dictates of section 1902(a)(30)(A) of the Act.

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