1. Medicaid Fee-for-Service: Prior Authorization Criteria & the Role of the DUR Board Charles Agte, Pharmacy Administrator Health Care Services June 19, 2013

2. Statutory Basis for Prior Authorization Program Section 1927 of the Social Security Act (SSA 1927) United States Code (USC) Code of Federal Regulations (CFR) Revised Code of Washington (RCW) Washington Administrative Code (WAC) 2

3. ‘Formulary’ under Medicaid Definition is different than commonly used within the pharmacy industry for private healthcare payers A formulary as described in USC is the only time Medicaid may opt to make a rebate eligible product non-covered 3

4. Formulary vs. DUR Program USC explicitly grants sole authority to the Board in formulary development: The formulary is developed by the state’s drug use review board [USC §1396r–8(d)(4)(a)] Outside of formulary development the Board’s role is advisory: The agency has the authority to accept or reject the recommendations or decisions of the DUR Board [CFR 42§456.716(c) and WAC 182-530-4000(4)] 4

5. Federal Authority Section 1927 of the Social Secuirty Act as Codified in USC §1396r–8 A state may subject to prior authorization any covered outpatient drug. A state may exclude or otherwise restrict coverage of a covered outpatient drug if the prescribed use is not for a medically accepted indication. 5

6. Federal Authority Medically Accepted Indication: Uses approved by the FDA (‘labeled indications’). Uses supported in the the federally recognized compendia (‘off-label use’). o American Hospital Formulary Service Drug Information o the DRUGDEX Information System 6

7. Federal Authority DUR requirements under SSA/USC: The program shall assess data on drug use against explicit predetermined standards including but not limited to monitoring for therapeutic appropriateness and appropriate use of generic products. A state shall provide for a drug use review program in order to ensure that prescriptions are appropriate and medically necessary. 7

8. State Authority Medical Necessity – WAC 182-500-0070 There is no other equally effective, more conservative or substantially less costly course of treatment available or suitable for the client… 8

9. Minimum Standard Federal and State statue require that outpatient drugs be covered only when: They are used according to an FDA labeled indication; or They are used to treat a condition for which the Compendia include quality evidence to support its use; - And - It is medically necessary to treat the client’s condition; and No other course of treatment is equally effective, or no equally effective treatment is less costly or more conservative. 9

10. Above and Beyond The Agency relies on the DUR Board’s clinical expertise in establishing criteria for appropriate use which go above and beyond this minimum standard. 10

11. When the Agency Requires Authorization (WAC 182-530-3100) Agency clinical staff assess new drugs, doses, or indications by applying a ‘drug evaluation matrix’ (DEM). DEM policy requires that a drug can NOT require PA on comparative cost alone. All drugs requiring PA for non-PDL reasons have an associated safety concern. 11

12. PDL and P&T As P&T Committee the DUR Board: Makes selection of preferred or non-preferred drugs based on medical evidence Offers guidance on selection of preferred drugs found to be therapeutically equivalent Does not guide coverage status or criteria beyond preferred/ non-preferred status for L&I or PEBB. May decide to offer additional guidance on coverage status and utilization management for Medicaid when convening as the DUR Board 12

13. DUR and PA As the DUR Board: Review data and evidence presented by Medicaid staff and request additional data or suggest DUR programs or interventions based on data provided. Review DUR programs and PA criteria proposed by Medicaid, and approve proposed methods or offer guidance on modifications to the program. Make recommendations on modifications to existing programs at the Board’s discretion. Propose, assist with, or engage in related provider education activities instead of or in addition to other criteria. 13

14. PA within PDL WAC 182-530-3100(2) states that PA status of a drug in a drug class on the WA-PDL is not determined according to the DEM process. WAC 182-530-4100(9) states that a drug in a PDL class may require authorization for safety. WAC 182-530-4100(7)(b) states that authorization of a non-preferred drug may require that additional criteria established by the agency be met. 14

15. PA within PDL PDL drugs may have existing criteria established through DEM or by the DUR Board when added to the PDL. All PA through the DEM process requires that there be a safety component for authorization to have been required. Existing DEM criteria represent department established criteria. 15

16. Authorization Process Per WAC 182-530-3200, there is a single authorization process applied to all products when a prior authorization request is reviewed. WAC 182-530-3200(4)(f) states: The department's authorization may be based on, but not limited to the least costly therapeutically equivalent alternative. 16

17. Transparency HCA is committed to transparency in the development of criteria under it’s prior authorization program, and the PDL. For all future PDL reviews, HCA will schedule review of any existing PA criteria for the drug class during the DUR portion of the meeting. 17

18. Motions? The Medicaid program of the Health Care Authority requests that the DUR Board: Provide input on and / or approve the existing process of establishing criteria according to ‘minimum standards’ of medical necessity and use for medically accepted indications, without the need to seek the input of the DUR Board. Provide recommendations and /or approve the existing policy of maintaining existing PA criteria for drugs newly implemented on the PDL. Instruct HCA as to whether the Board should be presented with all existing criteria on PDL classes reviewed by the P&T at each meeting, and whether such presentations should be limited to new PDL classes, or include all existing classes with each review. 18

19. Questions? Charles Agte, Pharmacy Program Manager Division of Healthcare Services Charles.agte@hca.wa.gov Tel: 360-725-1301 19