CMS Pharmacy Update y p Eastern Medicaid Pharmacy Eastern - - PowerPoint PPT Presentation

CMS Pharmacy Update y p

Eastern Medicaid Pharmacy Eastern Medicaid Pharmacy Administrators Association (EMPAA) Conference Conference

November 7-10, 2010 ,

Nemacolin Woods Resort and SPA Farmington, Pennsylvania Joseph L Fine R Ph MPA Joseph L. Fine, R.Ph, MPA Technical Director, Pharmacy Division Center for Medicaid, CHIP, Survey & Certification and State Operations Centers for Medicare & Medicaid Services

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CMS Pharmacy Update y p

Affordable Care Act (ACA) Medicare Part D E-Prescribing Retail Price Survey Retail Price Survey DUR APIs

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Li-Net

Affordable Care Act (ACA) Affordable Care Act (ACA)

The Patient Protection and Affordable The Patient Protection and Affordable Care Act (PPACA) P.L. 111-148 and the Health Care and Education the Health Care and Education Reconciliation Act (HCERA) P.L. 111- 152 are together known as “The 152 are together known as The Affordable Care Act”

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Affordable Care Act (ACA) ( )

Signed into law March 23 2010 Signed into law March 23, 2010 Aff t d M di id h b t Affected Medicaid pharmacy rebate program for States, manufacturers d CMS and CMS

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Medicaid Drug Provisions in Medicaid Drug Provisions in ACA

Minimum rebate percentage for single source and innovator multiple source source and innovator multiple source drugs increased to 23.1 percent of AMP (Section 2501(a)) AMP (Section 2501(a)) Effective January 1, 2010

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Medicaid Drug Provisions in Medicaid Drug Provisions in ACA

Minimum rebate percentage for single source and innovator multiple source source and innovator multiple source clotting factors and drugs approved exclusively for pediatric indications exclusively for pediatric indications increased to 17.1 percent (Section 2501(a)) 2501(a)) Effective January 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Rebate percentage for noninnovator multiple source drugs is increased to multiple source drugs is increased to 13 percent of AMP (Section 2501(b)) Effective January 1, 2010

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Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA Recapture

Rebate amounts attributable to the increase in the rebate percentages increase in the rebate percentages will be deemed an overpayment and disallowed on a quarterly basis disallowed on a quarterly basis (Section 2501(a)) Effective January 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Manufacturers are required to pay rebates for drugs dispensed to individuals enrolled in Medicaid MCOs, if the MCOs are responsible for coverage of drugs (Section 2501(c)) Effective March 23, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

States are required to include information on drugs paid for by Medicaid MCOs when requesting quarterly rebates from manufacturers (Section 2501(c)) Eff ti M h 23 2010 Effective March 23, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Covered outpatient drugs are not subject to the rebate requirements if they are dispensed by HMOs, including Medicaid MCOs, and subject to 340B discounts (Section 2501(c)) Effective January 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Discounts provided by manufacturers under the Medicare coverage gap discount program under section 1860D-14A are exempt from Medicaid best price (Section 3301(d) of Subtitle D) Effective July 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Maximum rebate amount for single and innovator multiple source drugs is 100 percent of AMP (Section 2501(e)) Eff ti J 1 2010 Effective January 1, 2010

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Medicaid Drug Provisions in Medicaid Drug Provisions in ACA

The rebate for new formulations, such as an extended release formulation, of a i l i t lti l single source or an innovator multiple source drug shall be the greater of the rebate for such drug or the product of the rebate for such drug or the product of the AMP of such drug, the highest additional rebate for any strength of the original single y g g g source or innovator multiple source drug, and the total units of such drug paid for under the State plan in the rebate period. (Section 1206(a) of HCERA. Eff 01/01/10

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Federal upper limit (FUL) for multiple source drugs is no less than 175 percent of the weighted average of AMPs in a FUL group (Section 2503(a)) Eff ti O t b 1 2010 Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Definition of AMP is revised to focus

• n sales to wholesalers and retail

community pharmacies that purchase drugs directly from manufacturers (Section 2503(a)) Eff ti O t b 1 2010 Effective October 1, 2010

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Section 202 of H.R. 1586-6 The Education Jobs and Medicaid Assistance Act

Amendment to 2503(a)(2)(B): Amendment to 2503(a)(2)(B):

Effective as if included in the enactment

• f Public Law 111-148

is amended by

• f Public Law 111 148 … is amended by

adding: “unless the drug is an inhalation, infusion , instilled, implanted, or injectable drug that is not generally dispensed through a retail it h d” community pharmacy; and”. Known as the five “I’s”

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Federal Register: F id S t 3 2010 Friday Sept. 3, 2010

Medicaid Program; Withdrawal of Medicaid Program; Withdrawal of Determination of Average Manufacturer Price Multiple Source Manufacturer Price, Multiple Source Drug Definition, and Upper Limits for Multiple Source Drugs Multiple Source Drugs

Comments Due October 4, 2010

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Medicare Part D in ACA ‘The Discount Program’

Th ACA t bli h d th M di id The ACA established the Medicaid Coverage Gap Discount Program by ddi ti 1860D 43 d adding sections 1860D-43 and 1860d-14A of the Act. The Discount Program makes manufacturer discounts available to applicable Medicare beneficiaries receiving applicable covered Part D while in the coverage gap.

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Definition of a multiple source drug is revised to clarify the drug is sold or marketed in the United States (Section 2503(a)) Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Manufactures are required to report to CMS on a monthly basis the total units they use to calculate monthly AMPs (Section 2503(b)) Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Confidentiality provisions modified to allow CMS to disclose the weighted average AMPs and the average retail survey prices on the CMS website (Section 2503(a)) Eff ti O t b 1 2010 Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

CMS is required to post the weighted f thl AMP it average of monthly AMPs on its website (Section 2503(b)) Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Definition of new term ‘retail it h ’ (S ti community pharmacy’ (Section 2503(a)) Effective October 1, 2010

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M di id D P i i i ACA Medicaid Drug Provisions in ACA

Definition of new term ‘wholesaler’ (S ti 2503( )) (Section 2503(a)) Eff ti O t b 1 2010 Effective October 1, 2010

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Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA

State Medicaid Director (SMD) letter was State Medicaid Director (SMD) letter was issued on April 22, 2010, discussing increased rebate percentage for covered p g

• utpatient drugs dispensed to Medicaid

patients, the extension of prescription of drug rebates to covered outpatient drugs dispensed to enrollees of Medicaid MCOs and the rebate offset associated with the and the rebate offset associated with the increase in the rebate percentages. Other SMD letters are to follow Other SMD letters are to follow.

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Medicare Part D in ACA ‘The Discount Program’

I l th di t h In general, the discount on each applicable covered Part D drug is 50 t f t l t th percent of an amount equal to the negotiated price. The manufacturer discounts attributed to the Discount Program will be excluded from the determination of best price as defined in 42 CFR section 447.505.

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E-Prescribing E Prescribing

E-Prescribing is becoming an accepted E Prescribing is becoming an accepted vehicle for prescription processing. NCPDP has developed E-prescribing p p g standards NCPDP/CMS has developed a proposed p p p solution to address the Medicaid “brand medically necessary” requirement.

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E-Prescribing and Medicaid E Prescribing and Medicaid

Several States have been awarded transformation grants to perform e- prescribing initiatives. R i ib t h ft t Requires prescriber to have software to both inquire to the Medicaid program patient specific information e g drug patient specific information, e.g., drug history, preferred drugs, preauthorization requirements, etc. Enhanced funding is available to States for development of MMIS portal or contractor development for data exchange

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development for data exchange.

PROPOSED MEDICAID E-PRESCRIPTION PATHWAY

Rx Claim Pharmacist Dispense to Patient MMIS POS W b P t l R E-prescription Web Portal Rx Hub / Surescripts Rebate E prescription Patient Inquiry Physician’s Practice

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Physician & Patient Physician s Practice Management Software

E-Prescribing

C tifi ti f B d N D Certification of Brand Name Drugs

The upper limit for payment for multiple source drugs for which a specific limit has been established does not apply if a been established … does not apply if a physician certifies in his or her own handwriting (or by an electronic alternative handwriting (or by an electronic alternative means approved by the Secretary) that a specific brand is medically necessary for a particular recipient. (42 CFR Section 447.512(c))

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E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

Prescriber:

Place DAW = “1” on the E-Rx Place in the “Note to Pharmacy” free form field (240 characters) “BRAND MEDICALLY NECESSARY” MEDICALLY NECESSARY”

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Send E-Rx to pharmacy

E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

Pharmacy:

Pharmacy receives E Rx with DAW “1” and Pharmacy receives E-Rx with DAW 1 and ‘BRAND MEDICALLY NECESSARY” NOTE: The pharmacy cannot make any changes to the “Prescriber Note to Pharmacy” field. If a DAW “1” appears and there is no brand necessary notation, pharmacist must contact prescriber for a

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pharmacist must contact prescriber for a new Rx!

E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

Pharmacy:

Pharmacist fills Rx with innovator brand Pharmacist fills Rx with innovator brand drug Pharmacist submits Rx to Medicaid as Pharmacist submits Rx to Medicaid as follows:

DAW = “1” DAW 1 Origin Code = “3” (electronic)

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E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

State Medicaid Program:

State pays pharmacy at Brand EAC if State pays pharmacy at Brand EAC if DAW=“1” and Origin Code = “3” State can audit prescriber’s e-system to verify “Brand Medically Necessary” verify Brand Medically Necessary appears in “Prescriber Note to Pharmacy” field

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E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

State Medicaid Program:

A State can require additional controls such as reason for Brand Necessary or Prescriber Preauthorization or additional submission of a FDA Adverse Action Report Report

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E-Prescribing

NCPDP/CMS Proposed Solution NCPDP/CMS Proposed Solution Brand Medically Necessary

In Summary:

This process allows for “an electronic alternative” prescription that is acceptable C S f f to CMS for the purpose of e-prescribing. If a pharmacy submits a DAW = “1” and an Origin Code = “3” the burden of proof redirects to the prescriber

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redirects to the prescriber.

Retail Price Survey P t I Part I

CMS is contracting with a vendor to CMS is contracting with a vendor to collect consumer prices paid to community pharmacies y p To be provided to the States for To be provided to the States for comparison to their reimbursement methodologies. g

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Retail Price Survey P t I Part I

National average prices on a monthly National average prices on a monthly basis for each of the following:

Cash customers 3rd party payers Medicaid programs p g

Also provides States information p when a new single source drug is available

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Annual State Report Annual State Report

States must report annually: p y Payment rates for outpatient y p drugs; Dispensing fees; Utilization rates for non- innovator multiple source drugs.

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State Rankings

Based on 50 most widely prescribed singe source drugs prescribed singe source drugs CMS ti l t il l CMS compares national retail sales price to prices for these drugs for each State each State CMS k St t d b it CMS ranks States and submits a full report to Congress

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Retail Price Survey P t II Part II

AWP provided by First Data Bank will AWP provided by First Data Bank will end September 2011. CMS has reviewed NASMD’s white CMS has reviewed NASMD s white paper “Post AWP Pharmacy Pricing and Reimbursement”. As a result, CMS is contracting with the retail price survey vendor to p y provide a survey of ingredient cost paid by retail community pharmacies.

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Retail Price Survey P t II Part II

The RFP will require the vendor to: The RFP will require the vendor to:

Possess a thorough knowledge of retail Possess a thorough knowledge of retail pharmacy drug purchasing and the factors that affect those purchasing costs Possess the ability to obtain net drug costs i i d ff i i b i d

• n-invoice and off-invoice by surveying and

performing on a sample basis that will be valid nationwide audits of retail pharmacy

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p y purchases

Retail Price Survey P t II Part II

The RFP will require the vendor to: The RFP will require the vendor to:

Be able to maintain separate files of prices Be able to maintain separate files of prices

• f retail community pharmacies, chain

pharmacies and specialty pharmacies Be able to look at geographic variation in pricing if any to provide reliable pricing, if any, to provide reliable nationwide data

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Retail Price Survey P t II Part II

The RFP will require the vendor to: The RFP will require the vendor to:

Be able to support and maintain files of Be able to support and maintain files of current drug ingredient cost prices on an

• ngoing basis

Be able to provide updated pricing information on very tight time schedules information on very tight time schedules

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Retail Price Survey P t II Part II

CMS plans to provide the States a file

• f the ingredient costs paid by retail
• f the ingredient costs paid by retail

community pharmacies on the CMS website.

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Drug Utilization Review DUR DUR

Section 1927(g) of the Social Security Act Section 1927(g) of the Social Security Act and CFR 456.700 requires States to implement DUR programs. CMS is currently reviewing FFY 2009 State annual DUR reports. Changes have been made to the annual report and reviewer instructions. CMS is planning to post on the CMS website DUR summaries and States’ best ti practices.

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New DUR Draft Survey Instrument Instrument

M st accompan ann al report Must accompany annual report Both electronic & paper copy should be submitted to CMS submitted to CMS Paperwork Reduction Act (PRA) submission is pending approval is pending approval States had the option of using this instrument for FFY 2009 reporting instrument for FFY 2009 reporting After PRA is approved, CMS plans to post results on CMS website results on CMS website

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DUR Draft Survey Instrument

REVIEW Cover Page I. State Name

• II. Responsible Person
• III. Prospective DUR
• IV. Retrospective DUR
• V. Physician-Administered Drugs
• VI. DUR Board Activity

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DUR Survey Instrument

REVIEW VII Generic Policy & Utilization Data

• VII. Generic Policy & Utilization Data

CMS will share the “S”, “N”, and “I” NDCs for covered outpatient drugs with ADURS for generic utilization reporting

• VIII. Program Evaluation/Cost Savings

IX. Fraud, Waste & Abuse Detection X. Innovative Practices XI. E-Prescribing

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Reporting Reporting

Annual reports are due by June 30 for Annual reports are due by June 30 for the previous FFY (ending Sept 30). CMS has established an email CMS has established an email address for submission of electronic reports and other inquiries – reports and other inquiries – DURPolicy@cms.hhs.gov Paper reports should be sent to the Paper reports should be sent to the respective regional office.

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Active Pharmaceutical Ingredients APIs

What is a drug? What is a drug? Section 201 (21 USC 321) Definition; under (g)(1) the term ‘drug’ means … (B) articles (g)( ) g ( ) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man … and (C) … (other than food) (D) … a food or dietary supplement for which a claim is made is not a for which a claim … is made … is not a drug solely because the labeling contains such a claim

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such a claim …

APIs APIs

An API is a bulk drug substance An API is a bulk drug substance, which is defined by FDA as any substance that is represented for use substance that is represented for use in a drug and that, when used in a manufacturing processing or manufacturing, processing, or packaging of a drug, becomes an active ingredient of the drug product active ingredient of the drug product 21 CFR section 207.3(a)(4).

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APIs APIs

APIs may be included in APIs may be included in extemporaneously compounded prescriptions and may serve as the prescriptions and may serve as the active drug component in a compound formulation. co pou d o u at o FDA regulations at 21 CFR part 207 require that all API manufacturers require that all API manufacturers register with the FDA.

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Low Income - Newly Eligible T iti (LI NET) Transition (LI-NET)

Retroactive auto-enrollment of full Retroactive auto enrollment of full benefit dual eligible individuals – a demonstration “LI-NET” demonstration LI NET . Newly eligible retroactive Medicare duals will be assigned to Humana duals will be assigned to Humana (PDP). All billi ti li it ti d All billing time limitations and pre- authorization requirements will be i d waived.

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“Li-NET” Li NET

Enrollees will be assigned a new PDP Enrollees will be assigned a new PDP prospectively. What are Medicaid’s options?

Bill Humana Recoup from provider Recoup from provider

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SPAs

New electronic submission process is b i d l d being developed. Documentation

Public notice (if required) Current and new SPA pages Answers to funding questions Supportive rationale for changes 90 day clock

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Closing Remarks Closing Remarks

Every year there are new Every year there are new challenges to Medicaid and Pharmacy. Pharmacy. It is CMS’ intent to continue to work It is CMS’ intent to continue to work collaboratively with States in addressing the issues necessary to addressing the issues necessary to serve the beneficiaries who need pharmacy services

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pharmacy services.

THANK YOU ! THANK YOU !

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