Benefit Management by pgr44087


Benefit Management document sample

More Info
									             Request for Information
              RFI 1631 DHCAA-JS

   Pharmacy Benefit Management of Medicaid,
BadgerCare Plus, and SeniorCare Prescription Drugs

                     Issued by:
               The State of Wisconsin
     Department of Health and Family Services
 Division of Health Care Access and Accountability

                 March 18, 2008

           Responses are requested by:
                 April 28, 2008

For further information regarding this RFI, contact

          Carrie Gray at (608) 266-3901
1.0   Introduction

      1.1     Purpose of the Request for Information

              The Department of Health and Family Services (the Department or DHFS) is
              seeking input from vendors regarding innovative ideas for pharmacy savings for
              programs administered by the Department’s Division of Health Care Access and
              Accountability (DHCAA) (formerly the Division of Health Care Financing),
              including BadgerCare Plus, Medicaid, and SeniorCare.

              DHFS is seeking information from potential vendors to determine whether
              alternatives to current practices and vendor relationships could reduce the current
              net drug expenditures per member.

              This is not a request for bid. No purchases will be made on the basis of
              responses to this Request for Information (RFI).

              The results of this information gathering process may be used by the State to
              Create and issue a Request for Bid (RFB) or Request for Proposal (RFP) that may
              result in the issuance of a State contract(s).

      1.2     Business Drivers

              Recent analysis of general fund tax collections by the Legislative Fiscal Bureau
              (LFB) shows a weakening of the State’s revenue situation, driven in large part by
              the emerging national economic downturn. The LFB projects a $652 million
              general fund deficit at the close of the biennium. The State’s worsening fiscal
              situation demands additional efficiencies in State programs. Pharmacy benefit
              managers have demonstrated improved efficiencies that preserve quality of care.
              It is imperative that DHFS maximize efficiencies in the current administration of
              the Medicaid pharmacy benefit.

      1.3     Background

              In June 2006, the Department issued a Request for Proposal for Pharmacy Benefit
              Management Services for Fee-for-Service (FFS) programs, RFP #1563 DHCF-LS
              (the RFP). The Department received bids from seven vendors on the three
              proposed packages. The Department chose a winning bid for each package;
              however, DHFS ultimately decided not to proceed with the procurement due to
              the uncertainty of the SeniorCare program and delays associated with the
              implementation of the Department’s new Medicaid Management Information
              System (MMIS). Since that time, SeniorCare has been extended through
              December 31, 2009, and the MMIS is scheduled to be implemented in October

              In addition, DHCAA carved the pharmacy benefit out of managed care for
              virtually all Medicaid and BadgerCare Plus members in February 2008. Only

PH03011 RFI                                  -2-
              PACE and Partnership Medicaid managed care members continue to receive their
              pharmacy benefits through their managed care plan. The carve-out has added
              approximately 430,000 additional covered lives to the FFS pharmacy benefit. In
              total, that benefit now encompasses 946,000 covered lives.

     1.4      Proposed Business Model

              Please provide an overview of your preferred business model including detail
              necessary for the Department to reasonably assess the following:
              a) The degree of risk you are willing to assume;
              b) What, if any, performance guarantees are offered;
              c) Assurances of complete program and fiscal transparency; and
              d) How you charge for your services.

     1.5      Overview of Division of Health Care Access and Accountability Programs

              Wisconsin Medicaid is a federal/State partnership that provides a comprehensive
              package of medical services to low-income children and families, elderly and
              disabled state residents. The Department of Health and Family Services, Division
              of Health Care Access and Accountability (DHCAA), administers the program.
              As of February 2008, a total of 946,000 eligible individuals were enrolled,
              receiving pharmacy services through the FFS programs. Approximately 853,000
              of the total are enrolled in Medicaid or BadgerCare Plus and 93,000 are enrolled
              in SeniorCare. The following table shows Medicaid and SeniorCare prescription
              volume and expenditures (expenditures are dispensing fees plus ingredient costs
              at MAC or AWP minus 13 percent):

                                                      SFY07            SFY07
                          Program                  Prescriptions      Gross $$*

                Medicaid Fee-for-Service            3,900,000        $241,000,000

                  Medicaid Managed Care             3,400,000        $167,000,000

                         SeniorCare                 4,200,000        $199,000,000

                            Total                   11,500,000       $607,000,000

              DHCAA is responsible for implementing the pharmacy program for Medicaid,
              including establishing policies, setting operational guidelines and supervising the
              provision of Medicaid pharmacy providers. DHFS/DHCAA has a current
              contract with Electronic Data Systems (EDS) to provide fiscal agent services for
              Medicaid. EDS designs, operates and maintains the Medicaid claims processing
              system to meet Wisconsin and federal MMIS requirements.

PH03011 RFI                                  -3-
              Wisconsin Medicaid Pharmacy Benefits

              Wisconsin pays the lesser of: 1) The provider’s Usual and Customary, 2) the
              average wholesale price (AWP) minus 13 percent plus a dispensing fee, or 3) the
              Wisconsin maximum allowable cost (MAC) plus a dispensing fee. The current
              dispensing fee is $4.88.

              Wisconsin provides prescription drug benefits in Medicaid, BadgerCare Plus and
              SeniorCare. Together, prescription drug expenditures for these three programs
              were about $607 million in SFY07. Drug rebates received for the FFS portion of
              these programs were approximately $149 million in SFY07.

              Current Wisconsin Medicaid FFS Pharmacy Management Policies

              The State has adopted a variety of strategies to control escalating drug
              expenditures that are unique to State programs as well as techniques commonly
              used by the private sector. Innovative, cost-effective, expenditure reduction
              proposals identified in this RFI may be considered either as potential complete
              replacements of existing program administration and policies or as components
              that complement existing programs. The strategies employed include:

              Maximum Allowable Cost (MAC) – DHFS establishes MAC prices as the
              allowable reimbursement rate for most generic drug products. Generic products
              comprise about 66 percent of all MA FFS prescriptions, and MAC prices have
              been established for about 85 percent of generic products. Typically, Wisconsin
              MAC prices are lower than those established by most states and the federal
              government. Wisconsin MAC prices are available at the Medicaid website:

              Brand Medically Necessary – When generic products are available and on the
              MAC list, the prescriber must indicate in writing that the brand drug is medically
              necessary. Less than 1 percent of prescriptions contain this override, indicating
              that Wisconsin is experiencing success minimizing the use of brand-name drugs
              when generics are available.

              Preferred Drug List (PDL) – In July 2004, DHFS began working with Provider
              Synergies LLC to implement a PDL. To date, 61 classes have been included in
              the PDL. Supplemental rebates received in CY07 amounted to $25 million.
              Wisconsin is one of six states participating in TOP$, a multi-state pool
              administered by Provider Synergies. The Medicaid PDL is available at the
              Medicaid website:

              STAT-PA – The Wisconsin STAT-PA system is a prior authorization (PA)
              system that allows Medicaid-certified pharmacy providers to request and receive

PH03011 RFI                                 -4-
              PA electronically, rather than on paper, for certain drugs. Providers are allowed
              to submit up to 25 PA requests per connection using a touchtone telephone and
              help desk queries. More information about the pharmacy STAT-PA system is
              available at the Medicaid website:

              Diagnosis Restrictions – Requires the pharmacist to submit a diagnosis for claims
              related to select drug classes. The claim is denied if the diagnosis is not approved
              as corresponding to the drug. This restriction applies to about 7 percent of
              reimbursed prescriptions. More information about current diagnosis restricted
              drugs is available at the Medicaid website:

              Prospective Drug Utilization Review (Prospective DUR) – Prospective DUR
              provides an alert to the pharmacist regarding a patient’s drug therapy at the point-
              of-sale (POS) before a prescription is filled. The report compares the new claim
              to patient’s recent claim history and alerts the pharmacist to potential therapeutic
              duplication, drug-disease contraindications, drug-drug interactions, incorrect drug
              dosage or clinical abuse/misuse at the point of sale.

              Retrospective Drug Utilization Review (Retrospective DUR) – Retrospective
              DUR identifies prescribing and utilization patterns that appear to fall outside best
              practice guidelines. Physicians are sent a letter describing potential drug therapy
              problems such as therapeutic duplication, drug-disease contraindications,
              incorrect drug dosage or duration, drug-induced illness or clinical abuse/misuse.

              Maximum Days Supply – Limits reimbursement to no more than a thirty-four
              (34) days supply with exceptions for some maintenance drugs, according to HFS
              107.10, Wisconsin Administrative Code.

              100 Days Supply – Allows a one hundred (100) days supply for certain
              maintenance drugs. The Department recently expanded the list of drugs to which
              this policy may apply. Savings are generated through reductions in the dispensing
              fee paid.

              Pharmaceutical Care (PC) – Wisconsin Medicaid provides pharmacists with an
              enhanced dispensing fee for PC services given to members. These services
              include enhanced education and counseling intended to increase patient
              compliance and prevent abuse or inappropriate use. The purpose of PC is to
              maximize the effectiveness of medications for the patient through intervention by
              the pharmacist. More information about PC is available at the Medicaid website:

PH03011 RFI                                  -5-
              Tablet Splitting/Dose Consolidation – Wisconsin Medicaid encourages tablet
              splitting and dose consolidation where those opportunities exist. Each
              intervention is currently voluntary and monitored by a soft edit. Compliance
              under the voluntary system is about 10 percent.

2.0   Responding to the RFI

              The Department requests that each vendor respond to the eight questions listed
              below. Savings estimates should be based on your analysis of the claims history
              provided. The claims history includes paid pharmacy claims for Medicaid,
              BadgerCare Plus and SeniorCare members for the last quarter of CY07 and
              medical history for the last two quarters of CY07. The data provided is from the
              period just prior to the implementation of the pharmacy consolidation. For all
              estimates, describe in detail the methods and assumptions use to derive estimated

              1. Identify savings possibilities via prospective and retrospective drug utilization
                 review (DUR) interventions.

              2. Identify savings associated with a preferred drug list and supplemental rebate

              3. Identify savings associated with the implementation of a complete PA system.

              4. Identify savings associated with provider interventions, e.g., re-education,
                 counter detailing.

              5. Identify savings associated with recipient interventions, e.g., lock-in program.

              6. Identify savings associated with alternate dispensing modalities, e.g., specialty
                 pharmacy, mail order.

              7. Identify savings associated with any other intervention not described above.

              8. Please provide an overview of your preferred business model including detail
                 necessary for the Department to reasonably assess the following:
                 a. The degree of risk you are willing to assume;
                 b. What, if any, performance guarantees are offered;
                 c. Assurances of complete program and fiscal transparency; and
                 d. How you charge for your services.

3.0   Pharmacy Data

              Medicaid, BadgerCare Plus, and SeniorCare prescription drug utilization and
              expenditure data are available via Access database. Requests for the data file

PH03011 RFI                                  -6-
              should be submitted to Carrie Gray at When requesting
              this information, please provide complete contact and delivery information
              including requestor name and business name, street address, city, state and zip
              code. CDs with the database and data dictionary will be sent over-night to

              Vendors should note these data represent gross expenditures for covered drugs;
              dispensing fees and allowed ingredient costs. Federal and supplemental drug
              rebates reduce these expenditures by an average of approximately 39 percent.

4.0   Submitting a Response

              Please submit your responses by April 28, 2008. All vendors must include a
              completed Vendor Data Sheet (Attachment A). Indication of an interest in
              providing a cost estimate or submitting a cost estimate will in no way obligate
              either the interested entity or the Department of Health and Family Services. This
              request is not a solicitation for proposals, bids or services, nor does it represent
              any other formal procurement device.

              Responses may be submitted via U.S. post or common carrier to the following

              James J. Vavra, Director
              Bureau of Benefits Management
              Division of Health Care Access and Accountability
              Department of Health and Family Services
              1 W. Wilson Street – Room 350
              P.O. Box 309
              Madison, WI 53701-0309

              If responders have proprietary concerns, a Designation of Confidential and
              Proprietary Information form (DOA-3027) is attached (Attachment B). The form
              may be completed and submitted with your response.

              A responder conference will be held on Monday, April 14, 2008 via phone
              conference. The responder conference will be a forum for interested vendors to
              have their questions about the RFI answered by State staff. Interested parties with
              questions may submit their questions in writing, via email only by April 7, 2008
              to James Vavra at Only questions submitted in writing,
              via email will be accepted. Questions received on time will be addressed at the
              Responder Conference.

              Vendor presentations may be held by the Division. You will be contacted if the
              Division decides to proceed with formal presentations. Please indicate on
              Attachment A whom the Division should contact regarding a presentation.
              Submit this form with your response to the RFI.

PH03011 RFI                                  -7-
                                                         Attachment A

                                           Wisconsin Pharmacy Benefit Management RFI
                                                       Vendor Data Sheet

Attachment A must be completed and submitted with each response to this request for
information document. This is intended to provide the State with information on the vendor's
name and address, and the specific persons who are responsible for preparation of the vendor's
response. Each vendor must also designate a specific contact person who will be responsible for
responding to the State if any clarification of the vendor’s response should become necessary.



       Prepared By:

      Please provide Vendor contact information for receipt of additional information
      regarding this RFI (if different from above).
            Person: Same as above                   Title:


                  Phone                                      Email
                Number:                                    address:
Department of Health and Family Services

PH03011 RFI                                                 -8-
                                          Attachment B

                                   STATE OF WISCONSIN

                          DOA-3027 N(R01/98)

The attached material submitted in response to Request for Information (RFI) #1631 DHCAA-JS
includes proprietary and confidential information which qualifies as a trade secret, as provided in
s. 19.36(5), Wis. Stats., or is otherwise material that can be kept confidential under the
Wisconsin Open Records Law. As such, we ask that certain pages, as indicated below, of this
bid/proposal response be treated as confidential material and not be released without our written

Prices always become public information when bids/proposals are opened, and therefore
cannot be kept confidential.

Other information cannot be kept confidential unless it is a trade secret. Trade secret is defined
in s. 134.90(1)(c), Wis. Stats., as follows: "Trade secret" means information, including a
formula, pattern, compilation, program, device, method, technique or process to which all of the
following apply:

1.   The information derives independent economic value, actual or potential, from not being
     generally known to, and not being readily ascertainable by proper means by, other persons
     who can obtain economic value from its disclosure or use.

2.   The information is the subject of efforts to maintain its secrecy that are reasonable under
     the circumstances.
We request that the following pages not be released
Section                                   Page #         Topic


PH03011 RFI                                   -9-
Failure to include this form in the bid/proposal response may mean that all information provided
as part of the bid/proposal response will be open to examination and copying. The State
considers other markings of confidential in the bid/proposal document to be insufficient. The
undersigned agrees to hold the State harmless for any damages arising out of the release of any
materials unless they are specifically identified above.

Company Name

Authorized Representative

Authorized Representative
                                                      Type or Print


This document can be made available in accessible formats to qualified individuals with

PH03011 RFI                                 -10-

To top