CMS Pharmacy Update Eastern Medicaid Pharmacy Administrators Association (EMPAA) Conference October 23-26, 2011 Nemacolin Woods Resort and SPA Nemacolin Woods Resort and SPA Farmington, Pennsylvania Joseph L. Fine, R.Ph, MPA Technical Director, Pharmacy Division T h i l Di t Ph Di i i Gail E. Sexton, R.N. Policy Analyst, Pharmacy Division Policy Analyst, Pharmacy Division Center for Medicaid and CHIP Services 1 Centers for Medicare & Medicaid Services
CMS Pharmacy Update CMS Pharmacy Update Section I Affordable Care Act (ACA) Pharmacy NPRM Status Rebates and Offsets Rebates and Offsets MCO Utilization Oth Other ACA AMP/FUL Information ACA AMP/FUL I f ti Draft FULs 2
CMS Pharmacy Update S Section II ti II Other Pharmacy Topics APIs State Plan Amendments DUR Electronic Submission RadioPharmaceuticals 3
CMS Pharmacy Update S Section III ti III “ Survey of Retail Prices: Payment and Utilization Rates and Performance Utilization Rates and Performance Rankings” Contract (Retail Price Survey) ( y) 4
CMS Pharmacy Update CMS Pharmacy Update Section I Affordable Care Act (ACA) Pharmacy NPRM Status Rebates and Offsets Rebates and Offsets MCO Utilization Oth Other ACA AMP/FUL Information ACA AMP/FUL I f ti Draft FULs 5
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” 6
Affordable Care Act (ACA) ( ) Signed into law March 23 2010 Signed into law March 23, 2010 Aff Affected Medicaid pharmacy rebate t d M di id h b t program for States, manufacturers and CMS d CMS 7
ACA – NPRM Status • CMS has prepared a Notice for CMS h d N ti f Proposed Rule Making (NPRM). • The NPRM currently is in the final stages The NPRM currently is in the final stages of clearance. • Once released, there will be a 60-day comment period. 8
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 9
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 10
Medicaid Drug Provisions in ACA M di id D P i i i ACA Rebate percentage for non-innovator multiple source drugs is increased to multiple source drugs is increased to 13 percent of AMP (Section 2501(b)) Effective January 1, 2010 11
Medicaid Rebate Billing Issues Medicaid Rebate Billing Issues • Due to the complexity in calculating Unit Rebate Amounts (URAs), CMS was unable to provide URAs until the was unable to provide URAs until the Q1 – 2011. • States previously had to rely on the manufacturers to determine their own URAs and pay the appropriate own URAs and pay the appropriate rebate. 12
Medicaid Rebate Billing Issues Medicaid Rebate Billing Issues • When URAs began being provided to th the States from CMS, States could St t f CMS St t ld then reconcile previous quarters based on their own calculations. 13
Medicaid Drug Provisions in Medicaid Drug Provisions in ACA Recapture / Offsets • Rebate amounts attributable to the increase in the rebate percentages will p g be deemed an overpayment and disallowed on a quarterly basis disallowed on a quarterly basis (Section 2501(a)). • Effective January 1, 2010 y , 14
Medicaid Drug Provisions in g ACA Recapture / Offsets • In June 2011, the offset URAs were provided to the States provided to the States. • Regional meetings were held to train the States on quarterly reconciliation. q y 15
MCO D MCO Drug Provisions in ACA P i i i 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 16
MCO D MCO Drug Provisions in ACA P i i i ACA States are required to include information on drugs paid for by Medicaid MCOs when requesting quarterly rebates from manufacturers (Section 2501(c)) Eff Effective March 23, 2010 ti M h 23 2010 17
MCO D MCO Drug Provisions in ACA P i i i 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 18
MCO Utilization MCO Utilization • States need to contract with their MCO/PBMs to obtain utilization data. • NCPDP has developed in their Post- • NCPDP has developed in their Post- Adjudication Utilization Standard a format that lends itself to MCO utilization reporting. 19
MCO Utilization MCO Utilization • To date, there are 38 States that have MCO programs in place. • 14 of the 38 States have their pharmacy benefit carved out of MCO h b fit d t f MCO capitation. 20
MCO Utilization MCO Utilization • All MCO States are required to bill All MCO States are required to bill manufacturers for rebates for MCO paid claims and submit MCO id l i d b it MCO utilization data to CMS. • To date few States have complied To date, few States have complied with this requirement. 21
Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA • Definition of AMP is revised to focus on sales to wholesalers and retail community pharmacies that purchase drugs directly pharmacies that purchase drugs directly from manufacturers (Section 2503(a)) • Effective October 1, 2010 22
Section 202 of H.R. 1586-6 The Education Jobs and Medicaid Assistance Act Assistance Act Amendment to 2503(a)(2)(B): Effective as if included in the enactment of Public Law 111-148 … is amended by adding: “unless the drug is an inhalation, infusion , instilled, implanted, or injectable drug that is not generally injectable drug that is not generally dispensed through a retail community pharmacy; and”. pharmacy; and . Known as the five “I’s” 23
24 FEDERAL UPPER LIMITS
Federal Register: F id Friday Sept. 3, 2010 S t 3 2010 Medicaid Program; Withdrawal of Determination of Average Determination of Average Manufacturer Price, Multiple Source Drug Definition and Upper Limits for Drug Definition, and Upper Limits for Multiple Source Drugs 25
Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA Definition of a multiple source drug is Definition of a multiple source drug is revised to clarify the drug is sold or marketed in the United States marketed in the United States (Section 2503(a)) Effective October 1, 2010 26
Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA • Manufactures are required to report to Manufactures are required to report to CMS on a monthly basis the total units they use to calculate monthly AMPs they use to calculate monthly AMPs (Section 2503(b)) • Effective October 1, 2010 27
Medicaid Drug Provisions in ACA M di id D P i i i ACA • Confidentiality provisions modified to • Confidentiality provisions modified to allow CMS to disclose the weighted average AMPs and the average retail survey prices on the CMS website y p (Section 2503(a)) • Effective October 1, 2010 28
Medicaid Drug Provisions in ACA Medicaid Drug Provisions in ACA • CMS is required to post the weighted q p g average of monthly AMPs on its website (Section 2503(b)) website (Section 2503(b)) • • Effective October 1 2010 Effective October 1, 2010 29
F d Federal Upper Limit (FUL) l U Li it (FUL) 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 Effective October 1, 2010 ti O t b 1 2010 30
DRAFT F d Federal Upper Limit (FUL) l U Li it (FUL) • On September 21, 2011, a draft of p the FUL was released on the CMS Pharmacy website. y • The draft methodology used to • The draft methodology used to calculate the FULs in accordance with ACA are based on the manufacturer ACA are based on the manufacturer reported and certified July 2011 monthly AMP and AMP unit data for monthly AMP and AMP unit data for multiple source drugs. 31
DRAFT Federal Upper Limit (FUL) • CMS is not posting monthly AMPs f for individual drugs on any of the i di id l d f th draft FUL files. • CMS is posting the weighted CMS is posting the weighted average of monthly AMPs in a FUL gro p group. 32
DRAFT Federal Upper Limit (FUL) • Section 2503(d) of ACA specified that • Section 2503(d) of ACA specified that the FULs amendments "shall take effect … without regard to whether or ff t ith t d t h th not final regulations to carry out such amendments have been promulgated by such date." • Draft FULs do not apply to FDA Orange Book B-rated drugs. 33
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