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

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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. Discussion And Questions George L
Discussion And Questions George L. Oestreich, PharmD, MPA Cell
Medicaid Update Fall 2017