Hemophilia Alliance Fall Meeting 2017 September 14, 2017 Hemophilia Alliance Fall Meeting 2017

More About Medicaid Than You Wish You Needed to Know Medicaid Update for HTCs More About Medicaid Than You Wish You Needed to Know

Medicaid Quick Facts Brief Level Set on Medicaid Update on the Covered Outpatient Rule CMS Update Four Factor Programs Approved Model Reimbursement for HTCs Medicaid Update Fall 2017

Medicaid as a Hemophilia Treatment Center (HTC) Payer Medicaid is a state-federal partnership focusing on indigent and disabled state patients Administered by the state with the approval by the federal Centers for Medicare and Medicaid [CMS] (approves process through state plan amendments [SPAs]) The Accountable Care Act (ACA) allowed states to increase the number of patients covered by increasing the income limits (these expanded patients received a higher match from CMS) Because of these increases and because it is difficult to budget for patients’ medical costs, most states are using managed care companies to organize and pay for services to their patients (Medicaid managed care companies or MMCOs) Medicaid Update Fall 2017

CMS Issues Rules for Covered Outpatient Drugs and for Medicaid Managed Care In January 2016 CMS promulgated a rule outlining changes in pharmacy reimbursement for traditional outpatient prescriptions Uses actual acquisition cost (AAC) for product reimbursement (340B is either AAC or ceiling price) Uses Professional Dispensing Fee (PDF) determined by a “cost to dispense survey” The new process was to begin April 2017 with the new SPA no later than June 2017 Clotting factor was not included in the AAC or PDF but the methodology was to have been explained in the SPA Medicaid Update Fall 2017

Where are we with the SPAs? To date, 22 states have new SPAs approved. Not all states have filed SPAs, and factor has appeared in only some of the approved SPAs CMS is slowly approving the remaining submitted SPAs Not closely following the original guidance provided to the states Significant level of inconsistency from state to state Medicaid Update Fall 2017

CMS Issues Rule Covering Medicaid Managed Care and Advisory Regarding Clotting Factor Reimbursement In May 2017 CMS issued a rule covering managed care pharmacy issues: Provided guidance for prevention of duplicate discounts when 340B drugs are used Reaffirmed the Medication Exclusion File (MEF) nor the rule impacts MMCOs Reaffirmed that the state MMCO contract and their secondary pharmacy network contract controls pharmacy policy for managed care patients MMCOs must pass through to State a list of drugs reimbursed by MMCO in which 340B was used In June 2017 CMS issued an advisory on their expectations for reimbursing for clotting factor: The dispensing fees should be supported by Cost of Dispensing (COD) studies The product cost should be “reasonable” but is not required to be at AAC Medicaid Update Fall 2017

CMS Accepted Plans for Factor Reimbursment Several processes to reimburse for clotting factor have met with CMS approval CMS has been rigid in accepting reimbursement methodologies that cover limited activities Direct pharmacist time in dispensing the products Coverage for factor only and not adjuvant agents CMS has continued to assert that non-product related services and costs should be reimbursed outside the traditional pharmacy claim process CMS further suggested that these costs should accrue to the medical budget, not the pharmacy budget Medicaid Update Fall 2017

Model One Medicaid HTC Reimbursement (340B) Pharmacy is reimbursed as all other providers of pharmacy services would be (i.e. WAC- or NADAC plus a PDF) When CMS sends out the unit rebate amounts for Medicaid to calculate rebates, that amount is charged to the identified pharmacy The state receives the funds from the pharmacy in lieu of rebate and is held harmless The pharmacy is allowed to retain the differences in WAC and AMP (average manufacturers price) and any sub ceiling prices or prompt payment discounts Medicaid Update Fall 2017

Model Two Medicaid HTC Reimbursement (340B) Provider pharmacy bills clotting factor at ceiling price (defined by state to be AAC) The pharmacy is reimbursed X cents per unit for handling and distributing clotting factor The pharmacy is reimburse an additional X cents per unit for the PDF for professional services of the pharmacist in all dispensing functions The non-HTC pharmacy is reimbursed similarly but at a lesser rate than the HCT Medicaid Update Fall 2017

Model Three Medicaid HTC Reimbursement (340B) The pharmacy is reimbursed ceiling prices for the clotting factor The initial fill of the clotting factor (or a significant change in product and/or administration) is reimbursed at a flat PDF or clinical rate of approximately $1,000.00 Each subsequent dispensed prescription would receive a “refill” rate of approximately $700.00 Medicaid Update Fall 2017

Model Four Medicaid HTC Reimbursement (340B) The pharmacy is reimbursed at ceiling price for the clotting factor A PDF determined by COD is paid with each dispensed prescription These PDFs range from a low of approximately $250 to a high of about $700 Medicaid Update Fall 2017

HTC Medicaid Database The payer team has been gathering and storing Medicaid information that is available to any HA member The data is targeted toward State Medicaid Agencies AND clotting factor reimbursement The state’s MMCO information is also gathered The more granular MMCO information regarding rates and billing styles is most accurately obtained from the provider relations group of the MMCO Medicaid Update Fall 2017

Job 1 for the HTC leadership and State Medicaid We continue to note how important a strong relationship is between the state Medicaid program and the HTC team We continue to encourage HTCs to develop this linkage The positive and sometimes unique reimbursement methods were arrived at because of strong relationships It is important to the state to control unnecessary cost and maintain wellness in the hemophilia population There is frequently a tie between the state and the HTC The state does not want to be publicly criticized Medicaid Update Fall 2017

Medicaid Model Program Templates for States to Use - Is There a Need? The templates would cover fee for service (FFS) and MMCO The MMCO is more flexible and has more options Templates would allow the HTCs to suggest policy and reimbursement in the context of what the rule allows If 340B - the state, the MMCO, and the HTC (covered entity) would need to be in agreement that the policy prevents duplicate discounts The MMCOs would be shared savings models The savings shared among the three players In some cases the capitation rate for the MMCO would be altered In some cases the clotting factor manufacturer may be at risk for claimed efficacy Medicaid Update Fall 2017

Discussion And Questions George L Discussion And Questions George L. Oestreich, PharmD, MPA george@hemoalliance.org Cell 573.230.7075 Medicaid Update Fall 2017