CMS Pharmacy Update Part 1. Current Medicaid Issues

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1 CMS Pharmacy Update Part 1 Eastern Medicaid Pharmacy Administrators Association (EMPAA) Conference November 9-12, 2008 The Greenbrier, White Sulfur Springs, West Virginia Joseph L. Fine, R.Ph, MPA Technical Director, Pharmacy Division Center for Medicaid and State Operations Centers for Medicare & Medicaid Services 1 Current Medicaid Issues Part 1 Deficit Reduction Act (DRA) Medicare Improvements for Patients and Providers Act (MIPPA) 2 1

2 Deficit Reduction Act (DRA) Physician-Administered Drugs Authorized Generics 3 Rebates for Physician Administered Drugs For single source drugs and specified multiple source top 20 drugs, States must collect NDCs from providers in order to secure rebates for physician-administered drugs. Became effective January 1, States must use NDCs for physicianadministered drugs in order to receive Federal match. 4 2

3 Physician Administered Drugs Claim Form Discussion Physician administered drug information can be captured on: HIPPA-approved 837P and 837I CMS 1500 paper claim form UB04 institutional claim form for outpatient administered drugs 5 Physician Administered Drugs Paper Claim Format The CMS 1500 form and UB-04 were revised in Aug The CMS 1500 addressed the NDC issue (see attachments for discussion). On October 10, 2007 the National Uniform Billing Committee designated the revenue description field (FL43) to report the required rebate information for the UB

4 7 Instructions for CMS-1500 NDC Application Line Item #24 for Shaded Area Qualifier: N4 Enter qualifier and NDC info The qualifier must precede the NDC with no spaces. Qualifier for Units F2 International Unit ML Milliliter GR Gram UN Unit The qualifier must precede the units with no spaces. 8 4

5 9 10 5

6 340B and Physician-Administered Drugs Affects outpatient drug coverage duplicate discount issue 340B entities are listed on HRSA Medicaid Exclusion File GPO purchases are not to be mixed with 340B purchases B and Physician-Administered Drugs (Cont) States have several options: Not require NDCs and use the Exclusion File Require NDCs using the Exclusion File on backend Use a modifier on HCPCS, such as UD to identify 340B drugs (NY, UT) 12 6

7 340B and Physician-Administered Drugs (Cont) Provider Issues (predominately hospitals) NDC reporting difficult due to billing systems Clinics that bill Medicaid at cost for drugs purchased under 340B must bill at their 340B acquisition cost Fees are inadequate to meet cost to dispense B and Physician-Administered Drugs (Cont) Provider Options Segregate 340B purchases and not bill Medicaid 340B drugs Bill 340B drugs and identify NDCs as required by the State Not bill drugs at all 14 7

8 Medicare Crossover and Physician- Administered Drugs Partial crossover payments are eligible for full rebate 1997 Budget Act allows States not to pay coinsurance and deductible if Medicare allowable pays at least the Medicaid allowed amount Some States still pay crossover partial payments States are required to bill for rebates if Medicaid pays any portion of the claim 15 Medicare Crossover and Physician- Administered Drugs (Cont) Claims Submission Electronic 837P and 837I loop 2400 allows for NDC and quantity Medicare carriers and fiscal intermediaries were not capturing the NDCs on the CMS 1500 and UB 04 Effective April 1, 2008 carriers are now able to capture NDCs on CMS 1500 (CR 5835) Effective October 1, 2008 fiscal intermediaries will be able to capture NDCs on UB 04 (CR 5950) 16 8

9 Physician-Administered Drugs Extension Requests A State that requires additional time to comply with the physicianadministered drug requirements may apply to CMS for an extension. To date, 38 States have applied for an extension. All States that applied received an extension. 17 Primary Reasons for Extension Requests MMIS conversion System development not complete Providers billing systems not ready to submit NDC information 18 9

10 CMS Rationale for Granting Extensions First notice to States of physicianadministered drug requirement was the State Medicaid Director s letter dated July 11, months was determined to be sufficient time to complete State system modifications where possible. There was no immediate amount of time that an extension for system requirements could be completed where the State was undergoing an MMIS conversion. 19 CMS Rationale for Granting Extensions (cont d) Where States were unable to make the necessary system requirements in a reasonable time, it was suggested that the States continue with their crosswalks, postpayment information gathering and, if necessary, require paper submission. No FFP would be available for drug claims for physician-administered drugs without an NDC

11 CMS Rationale for Granting Extensions (cont d) Physician providers were less problematic. Major issue of concern was hospital providers. Their billing systems were not prepared to capture NDCs. Clinic site Pharmacy site Billing site Hospital associations made concerted efforts to thwart the implementation. Hospital needed extra time to comply with the requirement, thus a 6-month extension was given to all request that raised hospital issues. 21 Authorized Generics Any drug sold, licensed or marketed under an NDA approved by the FDA and marketed under a different labeler code, product code, trade name, trademark or packaging than the brand drug. Sales of authorized generics attributed to AMP. Becomes best price

12 Medicare Improvements for Patients and Providers Act (MIPAA) Presidential veto overridden July Restored impending reduction in payments to providers. Section 171 allowed for prompt payment under Part D for PDPs to pay providers within 14 days of the electronic submission of a clean claim. Section 132 allowed for incentives to providers for electronic prescribing. (Electronic prescribing to be discussed in Part 2.) 23 MIPPA (con t) Medicaid Implications Section Barbiturates (limited indications) and all Benzodiazepines will no longer be an excluded category under Medicare Part D in Section 182 Medically excepted indications compendia were expanded for Part D not Medicaid. Section 203 The implementation of the Federal upper limits (FULs) and the public posting of average manufacture prices (AMPs) was delayed until October 1, (Temporary injunction litigation is still in force.) 24 12

13 Closing To Be Continued in Part 2: Special pharmacy issues Medicare Part D 25 THANK YOU! 26 13