Medi-Cal Rx Update
Medi-Cal Rx Background
On January 7, 2019, Governor Newsom issued Executive Order (N-01-19) directing the Department of Health Care Services (DHCS) to transition all pharmacy services from Medi-Cal managed care (MCO) to Fee for Service (FFS). This pharmacy transition, or Medi-Cal Rx, went into effect on January 1, 2022. It’s important to note that the pharmacy transition did NOT end the 340B program, however in moving all pharmacy services into FFS, 340B-covered entities are no longer able to access 340B savings for Medi-Cal patients in the same way. This has resulted in a significant loss in funding that has impacted both patients and health centers.
In this article, we provide an update regarding efforts to implement the pharmacy transition, Medi-Cal Rx. However, if you’re interested in learning more about our advocacy efforts regarding the Supplemental Payment Pool (SPP) please see the Advocates newsletter.
Medi-Cal Rx Phased Plan Approach
Most recently, DHCS announced its plan to reinstate claim edits starting in July and prior authorization (PA) requirements starting on September 16. This will be done in three phases, where under Phase I Wave III DHCS plans to reinstate PAs for 11 drug classes for patients over 21 who are starting new prescriptions on or after September 16. To learn more about DHCS phased transition plan please see the training that CPCA recently hosted in partnership with Magellan & the California Medical Association (CMA).
Given conversations with stakeholders, including CPCA, DHCS will NOT be moving forward with the reinstatement of Reject Code 80, which requires diagnosis codes. This is a big win since CHCs had concerns regarding how this would be implemented. No future reinstatement date has been provided. Additionally, as a member of the Medi-Cal Rx Advisory Workgroup, CPCA was invited to submit a comment letter listing our recommendations to improve DHCS’ phased implementation plan. CPCA worked with CHC leaders to develop the final comment letter, which you can find linked HERE.
Medi-Cal Rx Implementation & Related Concerns from CHCs
CPCA has created a questionnaire (found HERE) to help health centers report any operational concerns they are having with implementing the pharmacy transition, including issues with receiving responses from Magellan. We are also requesting members to respond to a short survey to provide more information regarding the reimbursement issues they’re having to ensure we have all the information needed to find a resolution with the state.
CPCA has scheduled monthly meetings with both DHCS and Magellan leadership to help find resolutions to CHC concerns. To allow sufficient time for the conversations and help us be as efficient as possible at these meetings, we are only discussing one or two issues per call and inviting the CHCs who reported those issues to join the conversation and share their concerns directly with DHCS / Magellan. Thus far we’ve focused on finding a mechanism to share claims data with MCOs and the state if a CHC carves in pharmacy services into their PPS rate and discussing reimbursement concerns. Please see more details below.
CPCA is working to resolve two main issues
with DHCS and Magellan, which are:
Reimbursement Issues:
Reimbursement Concerns: CPCA has anecdotally heard that some of our members are receiving overpayments/underpayments. We are working with our attorneys to inform CHCs of their legal obligations and to gather legal input regarding next steps.
Proposed Solution 1: We would like DHCS to place a cap to limit overpayments using the 340B ceiling price.
Proposed Solution 2: We’ve heard that many of the overpayments are less than $2.00. Would DHCS be open to creating a material breach amount of + / - $2.00? Meaning that CHCs wouldn’t need to report overpayments OR underpayments of $2.00 or less.
Status: CPCA met with DHCS and Magellan in late August. DHCS committed to doing some research to see how things functioned prior to the transition and whether there’s a way to inform the CHC of the rate used by the state to reimburse claims. This would allow CHCs to more easily identify any issues with reimbursement levels.
Update from DHCS: Next Steps for CHCs who carve in Pharmacy Services into PPS Rate & Sharing Claims Data if your CHC carves in Pharmacy Services into your PPS Rate:
Background: DHCS is working with Magellan to see how CHCs can use Medi-Cal Rx to share claims data with the state and health plans.
During the call CHCs explained the negative impacts that could arise if data is not shared appropriately between providers. This could lead to patient harm depending on drugs being taken and if monitoring is not provided between the different prescriptions being taken.
Proposed Solution 1: CHCs would like to process $0 billing claim through Medi-Cal Rx portal.
DHCS Recommendation: Reach out to your health plans to determine if there’s a mechanism to get data transmitted in alternative ways, in the interim, while a broader solution is explored. CHCs explained that not all health plans are open to these discussions. Additionally, this is a heavy lift for CHCs who work with more than one plan. A lot of staff time can go into organizing and sending this data.
Status: CPCA met with DHCS / Magellan in late August. DHCS will work with Magellan to review the recommended solutions and let us know in September if the solutions can be instituted. If not, they will let us know why and work with CHCs to find a solution.
Efforts with Stakeholder Partners
CPCA continues to be in communication with the Local Health Plans, California Hospital Association, California Medical Association (CMA) and Public Hospitals to learn what issues their members are encountering. The hope is to identify issues that overlap between the organizations and to then find a collaborative manner to approach the state and advocate together for solutions.
Additionally, CPCA partnered with CMA to host a training with Magellan for our members. The training was held on August 18, 2022 and most of the time was used to respond to member questions. You can find the recording HERE, slides HERE and Q/A HERE.