MANAGING THE MEDICAID

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1 MANAGING THE MEDICAID AND ADAP INTERFACE ADAP TECHNICAL ASSISTANCE CONFERENCE CALL HELD JANUARY 29, 1997 Arranged jointly by: Division of HIV Services Bureau of Health Resources Development Health Resources and Services Administration U.S. Department of Health and Human Services and National Alliance of State and Territorial AIDS Directors Report prepared by: National Alliance of State and Territorial AIDS Directors 444 N. Capitol Street, N.W., Suite #706 Washington, D.C (202)

2 I. Introduction This report summarizes the information presented in Managing the Medicaid and ADAP Interface, the fourth in a series of nationally broadcast technical assistance telephone conference calls focusing on state operated AIDS Drug Assistance Programs (ADAPs), which was broadcast on Wednesday, January 29, This ADAP teleconference series has been arranged by the Division of HIV Service (DHS), Health Resources and Services Administration (HRSA) in collaboration with the National Alliance of State and Territorial AIDS Directors (NASTAD). Included in this summary are both the content of the presentation and the discussion that took place during a Q & A session with conference call participants. The ADAP teleconference included staff from DHS, NASTAD and Title II CARE Act grantees: < Anita Eichler, Director, DHS/HRSA < Melanie Wieland, Project Director, DHS/HRSA < Joseph Kelly, Deputy Director, NASTAD < Arnie Doyle, Research Associate, NASTAD < T. Randolph Graydon, Director, Office of Beneficiary Services, Health Care Financing Administration (HCFA) < Carol Ross, ADAP Coordinator, Connecticut Department of Social Services < Miguel Gomez, Contract Officer, DHS/HRSA, Moderator II. Overview of Current ADAP Activities at DHS and NASTAD A. DHS/HRSA UPDATES Anita Eichler welcomed call participants and informed them that an in-depth technical assistance document on cost containment strategies for State ADAPs has been finalized by DHS and will be distributed to grantees very soon. This document was developed by NASTAD in collaboration with DHS. Ms. Eichler also provided participants with an update on protease inhibitor coverage among State ADAPs: currently, 34 States are covering all three approved protease inhibitors, 6 States cover one, 6 States will be adding protease inhibitors to their ADAP formularies during January and February, and two States will initiate coverage of protease inhibitors in April. By April 1997, 48 State ADAPs will be covering at least one protease inhibitor. B. NASTAD UPDATES Joe Kelly reminded participants that they would be receiving an ADAP survey from NASTAD this week. This new ADAP survey is part of the National ADAP Monitoring Project funded by the Kaiser Family Foundation but is consistent with previous NASTAD ADAP surveys. State AIDS directors will be receiving the surveys; in addition, those ADAP directors who are outside their health departments will also be receiving the survey directly. Mr. Kelly acknowledged the fact that the survey will be arriving at the

3 same time that participants are completing their Title II applications but informed participants that survey responses are not due back to NASTAD until February 19, Mr. Kelly thanked participants for completing this and previous surveys. He also reminded participants that the information gathered from this survey process will assist State AIDS directors and ADAP program managers in responding to information requests from their departments, State legislators, and governors. III. Discussion Topic: Managing the Medicaid and ADAP Interface Miguel Gomez, DHS moderator for the ADAP teleconference, introduced the discussion topic and the two presenters. Randy Graydon discussed the role of Medicaid in providing services to people living with HIV/AIDS and how Medicaid and State ADAPs interface on the macro level. Carol Ross discussed how the Connecticut State ADAP program and the State Medicaid program cooperate in several areas related to client eligibility and back-billing. HCFA: There are several areas where HCFA cooperates with other Department of Health and Human Services (DHHS) agencies to address the AIDS epidemic. For example, representatives from HCFA sit on the Department s AIDS Council, as do representatives from HRSA, the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and the National Institutes of Health (NIH). The Medicaid program administered by HCFA plays an enormous role in fighting the AIDS epidemic in that it is the single largest payor of direct services for people living with AIDS (PLWAs). Currently, Medicaid pays for 53 percent of the care for PLWAs and 90 percent of the care of all children living with AIDS. Medicaid estimates that it currently serves approximately 100,000 individuals with AIDS (adults and children); the combined federal and state Medicaid expenditures on AIDS care is estimated to be $4 billion for fiscal year (FY) Following the approval of the first three protease inhibitors by the FDA, HCFA, as a part of the DHHS AIDS Council s strategy to address the AIDS crisis, sent all of the State Medicaid programs a letter reiterating existing policy that these programs cover all FDA-approved drugs, including protease inhibitors. The letter also reiterated the fact that the coverage policy was applicable both to Medicaid programs operating in a fee-for-service environment and to those programs operating in a managed care environment. This letter was forwarded to all State Medicaid directors on June 19, Shortly thereafter, the National Governors Association (NGA) requested a meeting with HCFA to discuss the new policy and the potential impact of the new drugs on State Medicaid beneficiaries and on current and future Medicaid budgets. Representatives from HCFA also met with Office of Management and Budget (OMB) staff regarding the implications protease inhibitors would have on Medicaid funding/budgets as well as what safeguards exist to allow individuals to maintain access to the new drugs as they move from ADAP to Medicaid or from Medicaid to ADAP. Regarding the impact of drug coverage on the Medicaid budget, HCFA initially estimated that the cost to the program for covering protease inhibitors would be between $750 million and $1.3 billion in state and federal expenses. Actual expenditure data from December 1995 through September 1996 indicated that total expenditures on protease inhibitors reached roughly $43.5 million ($23.9 million for Invirase, $12.2 million for Crixivan and $7.3 million for Norvir); i.e., expenditures have been less than HCFA originally estimated. The reasons for the lower expenditure figures are unclear. However they may be due to 1) the

4 data collected cover a period when protease inhibitors were only beginning to be added State Medicaid formularies and 2) the positive impact of protease inhibitors on beneficiaries health (for more detail see comments from Utah caller on page 7). In relation to maintaining access to the new therapies, there are provisions in the Social Security Act which facilitate the transition of individuals off of Supplemental Security Income (SSI) as they return to work and their incomes increase. Section 1619 of the Act allows an individual who has been eligible for SSI payments and Medicaid benefits to maintain access to Medicaid services for a period of time after they become ineligible for SSI due to increased income from employment. The income maintenance level for this individual changes from the SSI Federal Benefit Level to what the individual was receiving in cash benefits plus what his/her medical expenses would be. This adjusted income maintenance level allows the individual to go back to work and still be eligible for Medicaid. To assess whether State Medicaid programs are, in fact, covering protease inhibitors, HCFA directed its regional AIDS coordinators to survey their regional Medicaid programs regarding coverage of the new therapies (a list of these regional AIDS coordinators is attached to this summary). All States, with one exception, report that they are covering protease inhibitors. In addition to this survey, HCFA staff has been reviewing drug rebate data to assess State Medicaid coverage of these drugs. The drug rebate data supports the positive survey responses regarding protease inhibitor coverage. The survey also identified State Medicaid program concerns that there is no Current Procedural Terminology (CPT) code for viral load testing, although 42 programs report that they are covering this test. Six states reported that they do not cover viral load testing while three states either did not respond or did not know whether they were covering this test. HCFA estimates that there will be an official CPT code established for viral load testing by However, HCFA also will be releasing a HCFA Common Procedural Code (HCPC) around April 1997 that may be used as a temporary CPT code for billing viral load testing. HCFA will also be collaborating with HRSA in several other areas related to the interface between Medicaid and ADAP. One important area under consideration is the education of Ryan White grantees regarding Medicaid, in general, and Medicaid eligibility requirements, specifically. Examples of important facts about Medicaid that Ryan White grantees should know include: Retroactive Eligibility- If an individual applies for Medicaid and is deemed eligible, that individual may be retroactively eligible to receive Medicaid benefits for some or all of the three months prior to application. Spenddown- Spenddown requirements do not need to be met by paid bills, they may be met simply by incurred bills. Even if an individual has received a medical bill that he/she cannot pay, this bill can be counted towards spenddown (but counted only once, no matter how long the bill remains unpaid). Services that are provided at no cost to the client (e.g., Ryan White-funded services) may not be counted towards spenddown. In addition, spenddown also may be used during the retroactive eligibility period. Finally, States may now elect to allow Medicaid beneficiaries to pay their spenddown amount up front (e.g., by

5 writing a check for the full spenddown amount) without waiting for medical bills to accumulate. In such cases, the State Medicaid program will then immediately begin paying the beneficiaries medical bills. If Medicaid expenditures are less than the amount paid by the beneficiary, the difference is refunded. HCFA has several education/training programs available to consumers and providers, including a training package called Medicaid 101. Call participants can obtain this package, which covers a variety of issues from eligibility to coverage, from their Regional AIDS Coordinator. In addition, HCFA established a Maternal AIDS Consumer Information Project which it pilot tested in four states and will expand to a total of 18 states this year. This educational project is designed to help reduce the vertical transmission of HIV from mother to infant through education of both providers and beneficiaries regarding HIV testing, counseling and treatment options. The materials used in this educational project are in the process of being updated and expanded to keep pace with new treatment information. Connecticut: The Connecticut State ADAP Program (CADAP) is administered by the Department of Social Services, which also administers the State Medicaid program. The program currently serves approximately 1,100 clients and covers 61 medications, including the three approved protease inhibitors. Applicants apply to the program via the mail and must be HIV-positive and have an income at or below 300 percent of the Federal Poverty Level (FPL). Any State Medicaid participating pharmacy is eligible to participate as a CADAP participating pharmacy. CADAP staff has inquiry access into the State Medicaid s eligibility system. At the time of application, upon recertification (every six months) and each time a pharmacy claim is received on a client, that client s Medicaid eligibility status is checked against this system. CADAP clients who have become eligible for Medicaid are discontinued from the CADAP program on average, CADAP discontinues approximately 28 clients per month because they have been granted Medicaid eligibility. Pharmacy claims sent to CADAP for payment which were incurred after a client was granted Medicaid eligibility are rejected by CADAP and sent on to Medicaid for payment. The CADAP office estimates that it rejects 50 to 75 claims each month due to clients being granted Medicaid eligibility. If a CADAP client is found to be eligible for Medicaid, CADAP refers the case to the Department of Social Service s financial operation unit; this unit initiates a search to determine whether any pharmacy claims were paid by CADAP for this client while the client had retroactive Medicaid eligibility. Any claims paid by CADAP during this period are debited to the State Medicaid program and credited to CADAP. During calendar year 1996, $105, was credited to CADAP from Medicaid by this process. CADAP also requires clients to apply for Medicaid (but not necessarily for Social Security benefits) at the time of application and recertification. In order to facilitate this process, the CADAP application also serves as the initial Medicaid eligibility application. If an applicant is clearly ineligible for Medicaid, then the application (for Medicaid benefits) is immediately denied by the Medicaid office. If it appears that an applicant may be eligible to receive Medicaid benefits, the Medicaid office sends the applicant a request for additional information. IV. Question & Answer Session

6 After the above presentations, participants were invited to ask questions of the presenters, DHS and NASTAD staff, or simply to comment on the information presented. The participants were also informed that ADAP program managers from four States would also be available on the conference line to respond to their questions and comments. These ADAP program managers included Lanny Cross (New York), Tawney Harper (Washington), Lori Lippert (Minnesota) and Sheryl Skinner (Texas). The following is a brief summary of the discussion that took place during the question and answer period: A caller from New York commented that some State Medicaid programs Texas, for example limit the number of prescriptions that a beneficiary may receive each month; this situation may require the State ADAP to pick up the slack by filling more prescriptions for clients. The caller asked whether HCFA has a process in place to ameliorate such situations. Larry Reed, a HCFA employee who works on drug rebate issues, responded that in Texas the Medicaid program covers three prescriptions per month. However, a prescription may be written for 180 days, effectively allowing a beneficiary to have prescriptions for different medications filled the following month while maintaining a supply of the prescriptions filled the previous month. In addition, if a beneficiary has multiple prescriptions, the Texas Medicaid program will fill the more expensive prescriptions before referring the beneficiary to ADAP or other resources. Mr. Reed reminded callers that Medicaid prescription limits are imposed by State legislatures and therefore are beyond the authority of the State Medicaid program to change. Sheryl Skinner, manager of the Texas ADAP, commented that only maintenance medications may be dispensed in 180 day supplies by the State Medicaid program. Ms. Skinner stated that many Medicaid beneficiaries need case management services in order to assure that they can get all of the drugs that they require, including acute-need drugs like antibiotics and psychotropics (these types of medicines are not dispensed by the Medicaid program in 180 day supplies). A participant from New York asked whether the Connecticut ADAP had experienced a reduction in the number of ADAP clients transferring to Medicaid since the State ADAP added protease inhibitors. Ms. Ross responded that the program has not yet noticed a drop in the number of clients rolling over to Medicaid. A caller from Georgia asked for additional clarification on the Connecticut ADAP s combined ADAP/Medicaid application. Ms. Ross reiterated that the ADAP application also serves as an initial Medicaid application and that if an applicant appears potentially eligible for the State Medicaid program, the Medicaid office will ask the applicant for additional information. Mr. Cross commented that the New York State ADAP encourages ADAP applicants to apply to the State Medicaid program at the time they apply for ADAP services. He also stated that Medicaid eligibility is significantly different from ADAP eligibility in New York and, furthermore, that it is handled at the county level. Ms. Lippert stated that the interface between ADAP and Medicaid in Minnesota is very similar to the situation described in New York. A caller from Illinois requested clarification on the use of federal dollars to meet Medicaid spenddown requirements. Mr. Graydon responded that, in general, federal dollars may not be used to draw down other federal dollars (e.g., Ryan White funds may not be used to assist individuals in meeting spenddown). Some States, however, use State funds to assist clients in meeting spenddown requirements.

7 A participant from Alaska requested additional information on how Medicaid beneficiaries can maintain access to Medicaid services if their health improves and they return to work. Mr. Graydon stated that if a beneficiary is receiving Supplemental Security Income (SSI) benefits and, therefore, Medicaid benefits, there are SSI provisions which allow the beneficiary to return to work, have an increased income level and still maintain temporary access to Medicaid benefits. The specific provisions are known as the 1619-B provisions. In addition, the recently-enacted Kennedy-Kassebaum bill basically upgraded Medicaid to real insurance status. The provisions of this bill may also assist Medicaid recipients who are returning to work in continuing insurance coverage once they no longer qualify for Medicaid benefits. A caller from New Hampshire reported that approximately 50 percent of the individuals that the State ADAP had enrolled to receive the protease inhibitor Invirase (saquinavir) have stopped requesting this drug from the program. It also appears that these clients have not begun accessing other protease inhibitors on the formulary nor have they rolled on to the State Medicaid program. The caller asked whether other State ADAPs were experiencing similar protease inhibitor utilization trends. Ms. Skinner reported that the Texas ADAP has only been covering protease inhibitors since October 1996 and had originally provided prescriptions for these drugs to approximately 1,200 clients. Of these 1,200, approximately 1,000 are still clients of the program and about 800 of that number have continued to access the therapies through ADAP. Mr. Cross explained that New York ADAP has not closely followed the numbers of clients who are continuing to access the therapies. However, he suggested that some clients who had been accessing these therapies through the State ADAP may have moved onto Medicaid, moved back and forth between the two programs or have partial insurance coverage. Mr. Cross also reported that the State ADAP has continued to experience large increases in the number of clients accessing protease inhibitors through the program. Ms. Harper stated that while Washington State ADAP does not track individual protease inhibitor utilization, the number of clients accessing these therapies through the program has doubled over the last six months. She cautioned, however, that the State ADAP only can assess what it is paying for and that approximately 50 percent of the ADAP s clients have some form of private insurance through which they may also access medications. Therefore, there may be more ADAP clients utilizing protease inhibitors than the program has reported. Mr. Graydon was asked to respond to a question received earlier regarding a protease inhibitor waiver. Mr. Graydon responded that HCFA has not yet granted any such waiver but that the agency is expecting to receive a concept paper from one State about this issue very soon. The concept paper will be reviewed by HCFA s Office of Research and Demonstration and will likely propose the establishment of some marker (e.g., CD4 count or viral load) to allow an individual to become eligible for limited Medicaid benefits before actually being disabled. The limited Medicaid benefits could include access to protease inhibitors, several other HIV-related drugs and perhaps case management services. Mr. Graydon reiterated the fact that, although several other States have expressed interest in applying for such a waiver should it be approved this would be a demonstration project to be carried out in just a few States. A demonstration project will allow the States an opportunity to show that there may be cost savings associated with early and consistent access to HIV medications.

8 A caller from Rhode Island asked whether other State ADAPs, in addition to Connecticut, had a system in place to back-bill Medicaid. Ms. Lippert responded that, while the Minnesota ADAP does reject claims that should be paid by Medicaid, the program does not back-bill Medicaid for claims already paid. Ms. Skinner stated that the Texas ADAP has an active link to the State Medicaid program which allows ADAP to check on client Medicaid eligibility immediately before dispensing medications. In addition, the State ADAP can check whether an individual client has filled his/her monthly allotment of Medicaid prescriptions and, if not, the claim is denied and billed to Medicaid instead of to ADAP. A participant from Illinois commented that the Illinois State ADAP and Medicaid programs are housed in separate agencies and that this fact makes coordination between the two programs difficult. The State ADAP must manually check client eligibility and billing records a process which requires a significant amount of staff time. In addition, the State ADAP does not back-bill Medicaid but asks its providers to do so. Ms. Harper stated that the Washington State ADAP faces similar challenges to Illinois program: they must request that their providers back-bill Medicaid and then reimburse the State ADAP. Ms. Skinner remarked that the Texas ADAP receives a tape of eligible Medicaid beneficiaries every two weeks which it runs against a list of eligible ADAP clients in order to check eligibility. She suggested that this process may be readily duplicated by other State ADAP programs. Finally, Mr. Graydon stated that HRSA and HCFA have been exploring other ways of increasing cooperation between State ADAPs and Medicaid programs. One possibility under consideration is to amend the Medicaid statute with language that would require cooperation between Medicaid and State ADAPs. A caller from Utah remarked that the State ADAP appears to be providing protease inhibitors to more individuals than the State Medicaid program. The caller suggested that this situation may be due to Medicaid s more restrictive eligibility requirements and asked whether there are any plans underway to modify Medicaid eligibility guidelines. Mr. Graydon stated that, other than the proposed demonstration waiver related to protease inhibitors, there are no other plans under consideration to extend or expand basic Medicaid eligibility. However, there are some expansions being considered regarding the SSI back to work provisions i.e., making the provisions more liberal. Mr. Graydon also reiterated that HCFA expenditures on protease inhibitors have been less than anticipated a fact which may be due to the improved health status of individuals taking these drugs, remaining healthier and, therefore, not qualifying for Medicaid benefits because they do not meet the disability eligibility requirement. This may result in individuals continuing to rely on ADAP services/funds instead of on Medicaid services. A caller from New Hampshire suggested that it would be very helpful if NASTAD and HRSA could compile a list of pharmacy manufacturer contacts to facilitate State ADAP contact with the manufacturers on a number of issues. Ms. Eichler responded that this was an excellent idea and the HRSA would work cooperatively with NASTAD to compile this list. Mr. Cross also suggested that the names of manufacturer regional governmental affairs representatives should be included on the list that HRSA and NASTAD are preparing. Mr. Graydon told participants that they could access a list of pharmaceutical contacts who deal with Medicaid rebate issues through the HCFA homepage on the internet (www.hcfa.gov). A participant from Texas asked why the State ADAP has been able to obtain the Public Health Service (PHS)/602 purchase price on covered drugs from the program s purchasing agent but not from the Office

9 of Drug Pricing (ODP). Ms. Wieland of DHS stated that ODP is prohibited from publishing the PHS/602 prices of drugs due to an arrangement governing the transfer of information between HCFA and the manufacturers. However, the pricing information can be obtained through wholesalers/purchasing agents. Additionally, State ADAPs may submit the drug prices they are paying to ODP which will then verify whether the submitted prices are in fact consistent with PHS/602 pricing levels. A participant from Louisiana asked whether any of the panelists could provide an update on Merck s Crixivan distribution system. Mr. Doyle from NASTAD stated his understanding that Merck plans to move to a more open but still limited distribution system for the drug sometime this Spring and then to a normal distribution system by late Summer or early Fall. Ms. Lippert commented that Merck is planning to move beyond Stadtlanders as the sole distributor for Crixivan during the Spring and that any provider willing to track the drug distribution according to Merck s guidelines would be accepted as a distributor. Mr. Cross stated that, according to Merck, an expanding foreign market continues to divert a certain amount of drug away from the U.S., thereby not leaving enough drug to maintain an inventory at pharmacy sites.

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