Medicaid Pharmacy Drug Coverage to Transition from Health Plans to Fee-for-service

Posted on October 04, 2019

The Medical Services Administration (MSA) released a proposed policy Sept. 30 to transition all pharmacy drug coverage from Medicaid health plans (MHPs) to Medicaid fee-for-service (FFS), effective Dec. 1, 2019. This change is proposed pursuant to the implementation of Enrolled Senate Bill 139, which makes appropriations for fiscal year 2020 (see related article). The MSA indicates that the change is being proposed as a means of reducing cost for the Medicaid program through a combination of increased pharmaceutical rebates and elimination of related MHP administrative capitation costs.

If the proposed policy is finalized, effective Dec. 1, 2019, the MSA will:

  • Transition to a single formulary, which would result in streamlined administration for Michigan’s healthcare providers and coverage consistency for Medicaid beneficiaries.
  • Require that all prescription drugs be billed at point-of-sale to the Michigan Department of Health & Human Services’ contracted pharmacy benefit managed (PBM). Medications would be subject to existing FFS pharmacy policies and coverage limitations, including prior authorization (PA) requirements.
  • Apply a copayment for each prescription dispensed to Medicaid beneficiaries age 21 years and older, including current MHP beneficiaries, as applicable.
  • Partner with MHPs and its PBM contractor (Magellan RX Management) by using recent MHP PAs and paid claims data to develop system edits. This would ensure continuation of the beneficiary’s medication coverage that was provided by their MHP and minimize and/or eliminate PA obstacles during the first three months of the coverage transition.

Comments are due to the MSA by Nov. 4. Hospitals are encouraged to contact Vickie Kunz at the MHA by Oct. 28 with any concerns identified.

Tags: Medicaid, MSA, Vickie Kunz, SB 139

Posted in: Member News

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