Medi-Cal: pharmacy benefits.
(1) Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services and under which health care services are provided to qualified low-income persons pursuant to a schedule of benefits, which includes pharmacy benefits, through various health care delivery systems, including fee-for-service and managed care. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.
Existing law authorizes the department to enter into various types of contracts for the provision of services to beneficiaries, including contracts with a managed care plan. Existing law generally requires Medi-Cal managed care plan contractors to be licensed pursuant to the Knox-Keene Health Care Service Plan Act of 1975. The Knox-Keene Health Care Service Plan Act provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Under this act, a health care service plan is required to provide an external, independent review process, which meets prescribed standards, to examine the plan’s coverage decisions on experimental or investigational therapies for an enrollee who meets specified criteria, including that the enrollee was denied coverage by the plan for a drug, device, procedure, or other therapy recommended or requested. Existing law requires the Department of Managed Health Care to establish the Independent Medical Review System, which generally serves to address grievances involving disputed health care services.
By executive order, the Governor directed the department to transition pharmacy services for Medi-Cal managed care to a fee-for-service benefit by January 1, 2021. Existing law requires the department to convene an advisory group to receive feedback on the changes, modifications, and operational timeframes on the implementation of pharmacy benefits offered in the Medi-Cal program, and to provide regular updates on the pharmacy transition, including a description of changes in the division of responsibilities between the department and managed care plans relating to the transition of the outpatient pharmacy benefit to fee-for-service.
This bill would require the department to establish the Independent Prescription Drug Medical Review System (IPDMRS), commencing on January 1, 2021, which generally models the above-described requirements of the Knox-Keene Health Care Service Plan Act. The bill would provide that any Medi-Cal beneficiary grievance involving a disputed health care service is eligible for review under the IPDMRS, and would define “disputed health care service” as any outpatient prescription drug eligible for coverage and payment by the Medi-Cal program that has been denied, modified, or delayed by a decision of the department, or by one of its contracting fiscal intermediaries for the administration of the prescription drug benefit if that entity makes a final decision, in whole or in part, due to a finding that the service is not medically necessary. The bill would require information on the IPDMRS to be included in specified material, including the “my Medi-Cal: How to Get the Health Care You Need” publication, on the department’s internet website, and various documents prepared by Medi-Cal managed care plans, including plan member handbooks, beneficiary evidence coverage forms, and letters of denial or notice of adverse benefits. The bill would authorize a beneficiary to apply to the department for an Independent Prescription Drug Medical Review (IPDMR) of a decision involving a disputed health care service within 6 months of receipt of the notice of adverse action, and would prohibit a beneficiary from paying any application or processing fee. The bill would require the department to provide a beneficiary with an application form and an addressed envelope, which the beneficiary may return to initiate an IPDMR, as part of the department’s notification to the beneficiary on a disposition of the beneficiary’s grievance involving a disputed health care service, and would require the form to include specified information, such as a statement indicating the beneficiary’s consent to obtain necessary medical records from the Medi-Cal managed care plan and the beneficiary’s providers. Upon notice from the department that the beneficiary has applied for an IPDMR, the bill would require the department and its contracting fiscal intermediaries for the administration of the prescription drug benefit to provide to the IPDMR organization designated by the department specified information, including a copy of any outpatient drugs dispensed to the Medi-Cal beneficiary, for purposes of the IPDMR organization’s evaluation of the request.
This bill would require the department to contract with one or more IPDMR organizations to conduct IPDMRs, and would require those organizations to be independent of any Medi-Cal managed care plan or the department’s contracting fiscal intermediary for the administration of the prescription drug benefit in California. The bill would also authorize the department to enter into an intra-agency agreement with the Department of Managed Health Care to perform some or all of the department’s duties, as specified. The bill would impose various requirements on the IPDMR organization, including that the organization is not affiliated or a subsidiary of a pharmaceutical manufacturer and that the organization submit to the department specified information, such as the name of any stockholder and owner of more than 5% of any stock or options, if a publicly held organization. The bill would require the medical professional reviewer or reviewers selected to conduct the IPDMR by the organization to perform specified duties, including reviewing pertinent medical records of the beneficiary. The bill would require the IPDMR organization to complete its review and make a written determination within 30 days of receipt of the application for review and supporting documentation, or less time as prescribed by the director, and to provide specified information, such as the analyses and determinations of the medical professionals reviewing the case, to identified individuals, including the director and the beneficiary. The bill would require the director to immediately adopt the determination of the IPDMR organization, promptly issue a written decision to the parties, and implement that decision. The bill would provide that the director’s decision adopting a determination of an IPDMR organization be made publicly available, as prescribed, including in a searchable database on the department’s internet website. The bill would require the director to perform an annual audit of IPDMR cases for education and determination of whether any denials, modifications, or delays in the coverage of outpatient prescription drugs necessitate an evaluation of the department’s coverage policies. The bill would require the department to establish a reasonable, per-case reimbursement schedule to pay the costs of IPDMR organization review. The bill would require the department to provide an external, independent review process to examine itself and contracting fiscal intermediaries on experimental or investigational outpatient prescription drugs for specified individuals, including a beneficiary who has a life-threatening or seriously debilitating condition, and would provide that a disputed health care service involving experimental or investigational therapies is subject to the above-specified review process, including additional identified criteria.
This bill would require the department to permit a Medi-Cal beneficiary to continue use of a drug that was covered by a Medi-Cal managed care plan and is part of a prescribed therapy in effect for the beneficiary immediately before the date of receipt of coverage through the department, irrespective of whether the drug is on the Medi-Cal contract drug list, for a prescribed period of time.
(2) Existing law authorizes the department to contract with a vendor for the purposes of surveying drug price information, collecting data from providers, wholesalers, or drug manufacturers, and calculating a proposed actual acquisition cost. Existing law authorizes the department to establish a list of maximum allowable ingredient cost for generically equivalent drugs, and to establish the actual acquisition cost based on 3 specified factors, including the volume weighted actual acquisition cost adjusted by the department to verify that the actual acquisition cost represents the average purchase price paid by retail pharmacies in California, or the proposed actual acquisition cost as calculated by a vendor, as specified. Existing law requires the department to establish a fee schedule for the list of pharmacist services. Existing law specifies the pharmacist services that may be provided to a Medi-Cal beneficiary.
This bill would authorize the department to provide a disease management or similar payment to a pharmacy that the department has contracted with to dispense a specialty drug to Medi-Cal beneficiaries in an amount necessary to ensure beneficiary access, as determined by the department based on the results of the survey completed during the 2020 calendar year.
(3) Existing law requires the department to prepare and submit assumptions and estimates, as prescribed, relating to the Medi-Cal program to the Department of Finance on a semiannual basis. Existing law requires the department to include in the Governor’s proposed budget the fiscal assumptions for the transition of the outpatient pharmacy benefit to a fee-for-service benefit.
This bill would require the department to include specified information in the Medi-Cal program assumptions and estimates, such as the percentage of pharmacies actively billing the Medi-Cal program for outpatient prescription drugs and the average expenditure and net expenditure for outpatient prescription drugs per Medi-Cal beneficiary.