Pharmacy – Page 3 – Mostly Medicaid

Posted on April 29, 2022 by MM_ADMIN

CMS Guidance to Drug Manufacturers Reporting Medicaid Best Price

[MM Curator Summary]: Changes to CMS drug regulations will now allow manufacturers to enter more value based arrangements with states.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

At the end of March 2022, the Centers for Medicare & Medicaid Services (CMS) released guidance to drug manufacturers and states on reporting Medicaid Best Price under value based purchasing (VBP) arrangements (Medicaid Best Price Guidance or Guidance). This Guidance follows CMS’ final rule issued on December 31, 2020 (Final Rule) responding to criticism that Medicaid Best Price requirements are hindering the use of VBP arrangements. The Final Rule and Guidance will go into effect on July 1, 2022, allowing manufacturers to report multiple best prices for VBP arrangements so long as the manufacturer offers the VBP arrangement to state Medicaid programs. This blog post will begin with a “101” on the Medicaid Best Price Policy, and then delve into an overview of the Final Rule, including the surrounding criticism from stakeholders; summarize the Medicaid Best Price Guidance; and discuss the potential impact of this change on states and manufacturers.

What is the Medicaid Best Price Policy?

Medicaid Best Price rules are part of the Medicaid Drug Rebate Program (MDRP). At its core, the Medicaid Best Price policy requires manufacturers to provide state Medicaid programs the best price it offers any other purchaser (with certain exceptions). Under the MDRP, manufacturers must enter into a National Drug Rebate Agreement (NDRA) for their drugs to be covered by Medicare and Medicaid. The NDRA requires manufacturers to report certain drug pricing information to CMS and to pay rebates on their products to Medicaid.

A key piece of information reported under the MDRP is the manufacturer’s “best price,” which is defined as the:

“[T]he lowest price available from the manufacturer during the rebate period to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure (including capitated payments) in the same quarter for which the AMP is computed.”

Key exceptions to this definition include discounts offered to Department of Veterans Affairs, the 340B drug discount program, Medicare Part D plans, including the Medicare Coverage Gap Discount Program, and Indian Health Services.

The best price is used to calculate the rebate amount owed to state Medicaid programs for brand name drugs. Specifically, for brand name drugs, the manufacturers must pay states a rebate equal to the greater of either:

23.1% of Average Manufacturer Price (AMP) (or 17.1% of AMP for certain pediatric and clotting drugs), or
the difference between AMP and “best price.”

The rebate calculation also includes an additional inflationary component to account for rising drug prices over time. States also have the option to negotiate supplemental rebates with manufacturers.

How has the Medicaid Best Price Policy Impacted VBP Arrangements?

Manufacturers and other stakeholders have argued that Medicaid best price requirements (pre-Final Rule) severely hindered the use of VBP arrangements in the commercial space. For example, if a manufacturer sought to offer a commercial plan an outcomes-based contract, where the manufacturer rebates a substantial cost of the drug to the payor in instances where the drug fails to produce a desired outcome, the manufacturer would have to offer that same substantial rebate to all states, regardless of whether the drug produces desired outcomes for Medicaid patients.

How does the Final Rule Change the Medicaid Best Price Policy’s Impact on VBP Arrangements?

Under the Final Rule, CMS allows the manufacturer to report multiple best prices for VBP arrangements, so long as the manufacturer makes the VBP arrangement available to state Medicaid programs. CMS broadly defines “VBP arrangement” as follows:

“Value-based purchasing (VBP) arrangement means an arrangement or agreement intended to align pricing and/or payments to an observed or expected therapeutic or clinical value in a select population and includes, but is not limited to:

(1) Evidence-based measures, which substantially link the cost of a covered outpatient drug to existing evidence of effectiveness and potential value for specific uses of that product; and/or

(2) Outcomes-based measures, which substantially link payment for the covered outpatient drug to that of the drug’s actual performance in patient or a population, or a reduction in other medical expenses.”

When a manufacturer enters into a VBP arrangement with a commercial payor, it must report (i) a non-VBP arrangement price, which is the best price offered absent a VBP arrangement; and (ii) the multiple prices tied to the various outcomes of the VBP arrangement. States then have the option to participate in that VBP arrangement. When states enter into the VBP arrangement, it would receive a best price rebate based on the patient’s outcome. If a state elects not to enter into a VBP arrangement, the best price used in the Medicaid rebate formula would mirror the lowest price available absent a VBP arrangement.

The final rule also revised the definition of “bundled sale” to clarify that VBPs may qualify as a bundled sale, which permits manufacturers to spread out discounts resulting from a VBP arrangement over multiple units in the bundled sale, so that manufacturers may ultimately report a net discount that is a weighted average of the discounts provided based on individual patient outcomes.

What concerns arise out of the potential impact of the new VBP Arrangement Policy?

States and patient advocacy stakeholders expressed concern with the changes enacted by the Final Rule, stating that this policy change would increase costs to state Medicaid programs. Specifically, they argue that:

State Medicaid programs do not have the staff or resources to collect the required data or otherwise administer VBP arrangements, especially during COVID.
Manufacturers will move all large payors, whose arrangements currently establish the best price, to VBP arrangements.

Given financial and resource constraints, State Medicaid programs may be unable to take advantage of VBP arrangements, and associated discounted pricing. Even though the Final Rule requires that manufacturers offer states a non-VBP best price if they do not participate in a VBP arrangement, they may still end up paying higher prices, especially if the manufacturers only offer their drugs through VBP arrangements.

What additional clarifications did CMS provide in its Medicaid Best Price Guidance on VBP Arrangements?

The Medicaid Best Price Guidance provides states and manufacturers additional clarity on key operational issues of reporting and implementing VBP arrangements and their impact on Medicaid Best Price. As part of this, CMS acknowledged and tried to address some of the stakeholder concerns discussed above.

Of particular note, CMS provided guidance on the following issues:

Clarity on “Offering” VBP Arrangements to States: The Final Rule requires manufacturers offer VBP arrangements to all states. The Guidance clarifies that the manufacturer must include a description of the VBP arrangement, the guaranteed net unit prices (GNUPs) available under the VBP arrangement for each outcome, and the manufacturer contact information in the Medicaid Drug Product (MDP) System to meet the requirements for “offering” the VBP arrangement to States. States are then responsible for reaching out to the manufacturer to enter into a state specific agreement for the VBP arrangement.
States are responsible for invoicing the manufacturer for additional rebates under VBP Arrangements. The Guidance clarifies that the MDP system will continue to generate the standard Federal rebate, based on the formula discussed above. States will have to invoice the manufacturer for additional rebates.
Calculation of Non-VBP Best Price. The Guidance clarifies that manufacturers must provide a non-VBP arrangement best price if it is also reporting multiple best prices for a VBP arrangement. CMS recognizes that some manufacturers may not offer a product outside a VBP arrangement. In this case, the manufacturer may use “reasonable assumptions” to approximate the non-VBP best price by “estimating a lowest price available to the payer/provider if no additional discounts based upon outcomes are made under the VBP arrangement.”
State Flexibilities: The Guidance notes that state Medicaid programs operate under different constraints and do not have access to the same resources as commercial payors. Thus, it encourages manufacturers to permit states the flexibility to make minor adjustments to VBP arrangements to address the specific needs of the state Medicaid program and its beneficiaries. The Guidance provides the following examples:

Offer the state the option of entering into a CMS-authorized supplemental rebate agreement, especially where the state is unable to enter into the manufacturer’s VBP arrangement offered on the commercial market.
Permit states to use existing and readily-available claims data to track outcomes for outcomes-based VBP arrangements and work with states to identify the most efficient way to track outcomes for a particular arrangement.
Make the VBP arrangement available to all Medicaid patients regardless of their health status, and ensure the arrangement is not used to clinically test drugs or cause health disparities for any particular population.

What are the potential impacts of the Final Rule and Medicaid Best Price Guidance?

In issuing the Final Rule and Guidance, CMS eliminated a significant barrier for manufacturers seeking to enter into VBP arrangements with commercial payors, paving the way for a likely increase in the use of VBP arrangements. Although CMS indicates that it will not get involved in the approval or review of the specifics of any VBP arrangements, it will monitor the implementation of the policy and will make referrals to the Office of Inspector General in cases when they identify concerns with manufacturer price reporting under the MDRP. Manufacturers need to ensure that they maintain appropriate records, including records setting forth their non-VBP best price if no non-VBP best price exists, as CMS will certainly be closely monitoring manufacturers as they begin to implement this new policy.

Clipped from: https://www.natlawreview.com/article/medicaid-best-price-101-review-medicaid-best-price-policy-and-new-cms-guidance

Posted on April 29, 2022 by MM_ADMIN

California investigating Centene over alleged Medicaid fraud

[MM Curator Summary]: CA begins its efforts to access the $1.2B set aside by Centene to deal with PBM spread pricing allegations.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

California regulators are investigating Centene Corp. over allegations that the company overcharged the state’s Medicaid department for drugs, according to a state Department of Health Care Services spokesperson.

DHCS did not specify which branch of Centene it was investigating. Centene subsidiaries offer Medicaid managed-care plans in California and administer the state’s Medicaid prescription drug program.

Centene receives the majority of its revenue from Medicaid managed-care contracts, and California represents its largest market with 2.14 million enrollees. In 2021, the state paid Centene $6.8 billion to manage its Medicaid program, the DHCS spokesperson said.

Centene did not respond to an interview request about the investigation.

Centene reached agreements with nine state attorneys general and has reserved $1.25 billion to settle allegations that it overcharged state Medicaid departments for medications, the insurer wrote in its annual filing with the U.S. Securities and Exchange Commission.

It has so far publicly disclosed paying $246.4 million to Illinois, Arkansas, Mississippi, Ohio and Kansas as part of these deals. Georgia, South Carolina and Indiana are also reportedly investigating the insurer over its now-defunct Envolve pharmacy benefit manager. The attorney general in South Carolina declined to comment, while attorneys general in Indiana and Georgia did not respond to interview requests.

California accepted new bids to run its Medicaid managed-care program until April 11, and it will announce winners in August. Centene executives are likely doing everything they can to ensure regulators are satisfied with their response, said Ari Gottlieb, a principal at A2 Strategy Group.

“It’s a highly material part of their business,” Gottlieb said. “My guess is that they’re throwing a bunch of extra resources, apologizing, really going all-in on fixing the problem.”

Existing problems in California

California’s investigation comes as state regulators withheld $3.8 million from subsidiary Magellan Health’s January contract after worker shortages left patients and providers waiting for prior authorization approvals, some of whom were on hold with the company’s call centers for eight hours at a time.

Both state regulators and Magellan Health blamed delays on contract changes, noting that a new vendor was taking over the administration of the state’s Medicaid prescription drug program for the first time. Magellan Health’s $302 million annual contract went live at the start of the year.

Rival insurers criticized the deal, saying the move would give Centene insight into their member demographics and give them a leg up when it came to bidding to run the largest Medicaid program in the nation. Centene’s pharmacy services reputation did not help: Patients and providers noted the irony of hiring a vendor that recently settled drug overcharging allegations from other state Medicaid departments.

“There’s a specter surrounding Centene and its legal troubles with regards to pharmacy benefits,” Antonio Ciaccia, president of drug pricing watchdog 3 Axis Advisors and head of 46brooklyn Research. “While their PBM has taken the disproportionate share of public lashings today, they’re not different from anybody else in this market.”

It’s hard to fault Centene when it recently acquired Magellan Health, and it hasn’t been fully integrated the businesses, Gottlieb said. California regulators approved the $2.2 billion merger two days before Magellan Health took over the state’s Medicaid prescription drug program. Moreover, delays in processing claims and prior authorization requests are common when public health programs change, and formulary updates made at the start of the year could have complicated the process, he said.

“Part of it is on the regulators, honestly, they should be doing their due diligence and readiness assessments to ensure their vendors can perform,” Gottlieb said.

DHCS said it measured the agency’s and Magellan Health’s internal capacities to administer the program prior to launch. Delays processing prior authorization requests, adjudicating provider claims and answering provider and patient calls “have stabilized and all backlogs have been cleared” since the start of the year, the spokesperson said.

Magellan Health has processed all prior authorization requests within 24 hours since February 11, and paid all pharmacy providers on time since the start of the year, a Magellan spokesperson wrote in an email. The company’s call centers levels are currently meeting their contractual requirements, the spokesperson wrote.

Long wait times disproportionately impacted–and continue to impact–the state’s safety net facilities, where up to 60% of their patients are insured through Medicaid, said Isabel Becerra, CEO of the Coalition of Orange County Community Health Centers, a not-for-profit consortium safety net clinics in southern California. While the backlog from the start of the year has been resolved, Becerra said providers are still spending more time than they had before the merger to secure care for their patients.

“It’s still not fixed,” Becerra said. “There’s still a lot of time that’s being taken with these patients.”

Delays cloud Sunshine Health Plan

California is not the only market where providers are complaining of long wait times with Centene. Lags in the company’s payment, claims adjudication and prior authorization systems have also plagued Florida, Centene’s second-largest Medicaid market with 1.78 million enrollees. The deadline to bid on continuing to run Florida’s Medicaid program is also approaching, Gottlieb noted.

In March, Florida regulators fined Centene $9.1 million and suspended enrollment in its Sunshine Health Plan after technology glitches related to its integration of insurer Wellcare led it to mistakenly deny medical claims for more than 121,100 lower-income adults and children.

In response, Sunshine Health agreed to provide a corrective action plan to the state. Since its October merger with Wellcare of Florida, 99.1% of its claims were paid within 30 days, a Sunshine Health spokesperson wrote in an email.

But hospitals and independent providers are still reporting delays, said Mary Mayhew, president and CEO of the Florida Hospital Association.

“A lot of the fallout will continue,” Mayhew said.

One provider still navigating the change in payers is Children’s Orthopaedic and Scoliosis Surgery Associates, which claims to be the state’s largest private children’s orthopedic provider. Sunshine Health Plan owes the independent practice $200,000 over improperly denied claims and prior authorizations, repricing and categorizing consults as new patient visits, administrator Carol Ittig said.

In late March, Ittig said she had a virtual meeting with Centene executives about the payment problems, telling them she would have to delay paying the practice’s physicians because of the insurer’s lag in accurately processing claims. Three days later, Ittig woke up to a $70,000 no-strings-attached loan from Sunshine Health.

“They told me to hold on to it as long as I think that there’s still issues,” she said. “I’m very grateful. But that shows that they know that there are issues, that they want to rectify it but they know that it’s gonna take them a minute to fix.”

Clipped from: https://preparedpatriot.net/2022/04/25/california-investigating-centene-over-alleged-medicaid-fraud/

Posted on April 29, 2022 by MM_ADMIN

UnitedHealth (UNH) Inflated Drug Costs, Louisiana AG Alleges in Suit

[MM Curator Summary]: UHC is now facing its own spread pricing allegations related to its subsidiary PBM OptumRx.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

UnitedHealth Group headquarters in Minnetonka, Minnesota.

Photographer: Mike Bradley/Bloomberg

John Tozzi

April 20, 2022, 11:09 AM CDTUpdated onApril 20, 2022, 2:04 PM CDT

UnitedHealth Group Inc. was accused by Louisiana’s attorney general of inflating prescription drug charges in the state’s Medicaid program by billions of dollars.

UnitedHealth’s pharmacy benefits manager, Optum Rx, used secret prices and the complexity of the supply chain to cause the safety-net health program “to needlessly pay billions of dollars more per year for prescription drug benefits,” according to a lawsuit from Attorney General Jeff Landry. The action was filed April 13 in state court.

UnitedHealth said in a statement that its services are performed in accordance with state regulations and the Medicaid program’s requirements outlined in its contract. “We believe this lawsuit is without merit and will defend ourselves against these unsupported allegations,” the statement said.

Pharmacy benefits managers have come under growing scrutiny from employers and governments over how they calculate drug costs. The case is the latest attempt by state authorities to curb what they call fraudulent pricing practices by pharmacy benefits managers hired to run Medicaid drug plans. UnitedHealth rival Centene Corp. took a $1.1 billion charge last year to resolve similar claims from several states.

UnitedHealth is one of several companies Louisiana hired to administer Medicaid, the state-based insurance plan for low-income residents. Contracts require the companies to spend a minimum share of their premiums on medical care, a threshold known as the medical-loss ratio, or MLR.

UnitedHealth also owns pharmacy benefit manager Optum Rx, which contracts with its health insurance plans. The AG alleged that Optum had an incentive to pump up its drug costs to help parent UnitedHealth meet its required spending on health care.

“Since only United is required to abide by the MLR requirement, inflating the drug costs paid to Optum actually helps United meet its MLR but does not create an actual loss to their parent company,” the AG’s filing said. “Inflated payments to Optum are additional profits for United, yet are counted as costs for the purposes of meeting the MLR.”

The petition alleges that Optum overcharges the state for generic drugs; engages in spread pricing by charging the state more than it pays pharmacies to fill prescriptions; and claws back money from pharmacies without passing it back the state.

“Unregulated middlemen, cloaked in secrecy, drive up their own profits at the expense of Louisiana citizens,” Landry said in an emailed statement. He alleged that PBMs take advantage of “an unclear web of contracts” with drugmakers, health plans and pharmacies, “taking a share of profits from each entity.”

The action cites a breach of contract, violations of the Louisiana Unfair Trade Practices Act and other violations. In addition to damages, restitution, and penalties, the AG asked the court to force United to turn over documents that the state requested during its probe but was unable to obtain.

The case is State of Louisiana vs. OptumRx and United Healthcare of Louisiana Inc., C-717848, East Baton Rouge Parish.

(Updates with attorney general’s statement in ninth paragraph)

Clipped from: https://www.bloomberg.com/news/articles/2022-04-20/unitedhealth-inflated-drug-costs-louisiana-ag-alleges-in-suit

Posted on March 25, 2022 by MM_ADMIN

Questcor Whistleblower Awarded 20% of $233.7 Million False Claims Act

[MM Curator Summary]: Achtar will pay $233M for hiding other cheaper prices that Medicaid could have benefitted from.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

March 18, 2022. The United States Department of Justice settled a case against Irish-American pharmaceutical manufacturer Mallinckrodt ARD LLC (formerly Questcor Pharmaceuticals, Inc.) for failing to pay the proper Medicaid Drug Rebate Program amounts to the government for its drug H.P. Acthar. Under the terms of the settlement, the drug company will pay a total of $233,707,865 to both the federal government and Medicaid participating states, all of which is considered restitution. The whistleblower who reported this conduct in 2018 was a former Mallinckrodt director of internal controls, gross-to-net accounting, and government reporting. They will be awarded 20% of the government’s recovery, almost $47 million.

Knowingly decreasing an obligation to pay money to the government constitutes a violation of the False Claims Act. According to the allegations, the pharmaceutical manufacturer knowingly underpaid Medicaid rebates for its Acthar drug. Under the Medicaid Drug Rebate Program, pharmaceutical manufacturers enter into an agreement with the government and pay inflation-based rebates to federal and state governments. The rebates constitute the “difference between the drug’s current price and the price the drug would have had if its price had increased at the rate of inflation since 1990, or the date when the drug was first marketed, whichever date is later.” These quarterly rebates are intended to insulate Medicaid beneficiaries from inflation-based drug price increases.

The pharmaceutical manufacturer allegedly misrepresented the date on which Acthar was first marketed, paying rebates beginning in 2013, “as if Acthar was a new drug first marketed in 2013.” Choosing to pay rebates in 2013 allowed Mallinckrodt to “disregard all pre-2013 price increases for Medicaid rebate purposes” and “significantly lowered Medicaid rebate payments for Acthar.” Additionally, the manufacturer increased the price of the drug from $50 per vial in 2001, to $28,000 per vial in 2013, and up to $40,000 per vial currently, leading to allegations of an “unlawful and improper windfall” for underreporting the drug’s price increases.

Taxpayer funded healthcare programs are not intended to be a profit center for pharmaceutical manufacturers; they are supposed to support poor and vulnerable members of society and spend taxpayer funds wisely. “[This] settlement vindicates the interests of the American taxpayer by ensuring that no pharmaceutical manufacturer can illegally boost its profits at the expense of state Medicaid programs, and the people and families those programs serve. This company unlawfully siphoned money out of the Medicaid program which poor people depend on for their medical care,” said a United States Attorney connected to the case. Medicaid rebates are supposed to mitigate the cost of pharmaceuticals for Medicare beneficiaries, and those rebates are dependent upon pharmaceutical manufacturers transparently reporting drug prices and manufacture dates.

The whistleblower raised concerns for the warnings the pharmaceutical manufacturer received from the Centers for Medicare and Medicaid Services in 2016-2019, but their concerns were met with inaction, leading to the whistleblower’s resignation, and filing a qui tam lawsuit.

Clipped from: https://www.natlawreview.com/article/whistleblower-awarded-20-2337-million-false-claims-act-recovery-medicaid-drug-rebate

Posted on March 10, 2022 by MM_ADMIN

Mallinckrodt inks $260M settlement with US to resolve Medicaid underpayment and kickbacks allegations

MM Curator summary

[MM Curator Summary]: The drug company depressed rebates it should have paid to Medicaid and set up a foundation to cover member copays when it shouldn’t have.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

A month after a U.S. bankruptcy court signed off on Mallinckrodt’s reorganization plan, the company has agreed to a $260 million settlement to resolve claims by the Department of Justice surrounding its management of its controversial Acthar Gel drug.

The U.S. said that Mallinckrodt underpaid Medicaid rebates and used a foundation to pay illegal copay subsidies, violating an anti-kickback statute by inducing patients to use the treatment.

The settlement resolves separate cases brought by the government following whistleblower complaints in 2019 and 2020, both involving the popular drug used to curb seizures in children.

The settlement was hastened by the recent decision on Mallinckrodt’s financial condition, which was determined in bankruptcy court in Delaware.

“Mallinckrodt illegally reduced the amounts it paid to state Medicaid programs by improperly calculating the rebates it owed,” U.S. attorney Rachael Rollins said in a statement. “The company unlawfully siphoned money out of the Medicaid program which poor people depend on for their medical care.”

The company resolved (PDF) the Medicaid rebates claim for $234.7 million and took (PDF) care of the kickback claim for $26.3 million. Progressive payments will be spread over seven years.

“We disagree categorically with the government’s characterizations, but are pleased to have these matters behind the company and note that the settlements contain no admissions of wrongdoing,” a Mallinckrodt said in an emailed statement.

Late last month, the bankruptcy court signed off on a $65.75 million settlement between Mallinckrodt and investors who claimed that the company concealed its reliance for federal reimbursements for Acthar Gel.

In 2020, the drug drew scrutiny from Congress after its price skyrocketed over the last two decades—from $50 per vial to $40,000. Mallinckrodt picked Acthar Gel up in 2014 when it paid $5.8 billion to acquire the drug’s original developer, Questcor Pharmaceuticals.

The Medicaid rebate claims against Mallinckrodt spanned from 2013 to 2020, when the company allegedly underpaid rebates based on its claim that Acthar Gel was a new drug in 2013 when it actually entered the market decades earlier.

The kickback claims spanned from 2010 to 2014, when Questcor was alleged to have partnered with the Chronic Disease Fund to subsidize Medicare copayments to market the drug as “free” while increasing its price.

As part of the settlement, Mallinckrodt will enter a five-year corporate integrity agreement (CIA) that contains unique drug price transparency and monitoring provisions focused on Medicaid and patent assistance program activities.

Mallinckrodt entered bankruptcy because of its mounting liabilities over its alleged role in contributing to the opioid crisis. It agreed to a $1.6 billion settlement to resolve those claims.

Clipped from: https://www.fiercepharma.com/pharma/mallinckrodt-agrees-260-million-settlement-us-over-medicaid-underpayment-and-kickback

Posted on March 10, 2022 by MM_ADMIN

Officials: Lab pays $4.8 million for overcharging CT Medicaid patients

MM Curator summary

[MM Curator Summary]: The lab was charging CT Medicaid4x what it was charging other payers for urine drug tests, and that’s a no-no.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

A national laboratory paid nearly $4.8 million to resolve allegations it overcharged the Connecticut Medicaid program for certain lab services over the span of several years, according to officials on Monday.

Connecticut Attorney General William Tong and other officials announced the settlement with Redwood Toxicology Laboratory on Monday, alleging that the lab violated the state’s “Most Favored Nation” regulation.

The regulation indicates that clinical labs should not seek payment from Connecticut Medicaid for services at a price higher than the lowest price the lab charges for the same or similar services from other third parties.

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The lab, based in Santa Rosa, Calif., offers lab testing services like urine drug testing services for substance abuse patients in the Connecticut Medicaid program.

Specifically, officials said, the lab regularly accepted payments from Connecticut Medicaid for specific urine drug tests at a rate of $38 per test. However, the lab was charging other third parties from $2 to $10.50 for the same or similar tests, officials said.

The lab agreed to pay $4,797,578 to cover claims submitted to the Connecticut Medicaid program from Jan. 1, 2015, through Feb. 24, 2018.

Anyone who suspects health care fraud is encouraged to report it by calling 1-800-HHS-TIPS.

Clipped from: https://www.ncadvertiser.com/news/article/Officials-Lab-pays-4-8-million-for-overcharging-16983837.php

Posted on March 3, 2022 by MM_ADMIN

Medicare/Medicaid may not cover cost of new Alzheimer’s drug

MM Curator summary

[MM Curator Summary]: As the initial Aduhelm coverage story concludes, it looks like coverage will be limited to those in clinical trials for Medicare and Medicaid.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

CHARLOTTE, N.C. — The Centers for Medicare and Medicaid Services (CMS) is proposing to restrict payment for a group of drugs to treat Alzheimer’s disease. That means patients may have to pay the full cost if they want to take the drug.

What You Need To Know

The Centers for Medicare and Medicaid Services is proposing to only cover the cost of approved monoclonal antibodies that targets amyloid for the treatment of Alzheimer’s disease in clinical trials
Currently, aduhelm (aducanumab) is the only FDA-approved drug in this group
The out-of-pocket cost for the drug is $28,000 per year
In a statement, CMS said while they see potential promise in this drug, they also see potential harm

Brian Van Buren understands the toll the disease can take because he deals with a lot of day-to-day frustrations firsthand. He has early-onset Alzheimer’s, which currently affects his short-term memory. He can recite most of the Gettysburg Address from memory, but can’t remember what he did two days ago.

“Last Sunday was my birthday, I remember that,” Buren said. “My friends took me out for dinner. I remember what I ate, but then Monday, Tuesday I don’t remember.”

Currently, there is only one FDA-approved Alzheimer’s drug that treats the disease, and not just the symptoms. It’s called Aduhelm.

In a statement, CMS said while they see potential promise in this drug, they also see potential harm and want more information before potentially making the drug more widely available.

Some doctors, however, are worried about the effectiveness and side effects such as headaches, dizziness, vision changes and brain bleeds. That’s why the Centers for Medicare and Medicaid Services is proposing only to cover this class of drugs if the patient is taking it in clinical trials.

“That is unfortunate because that is going to eliminate a lot of people,” Buren said. “They can’t afford that kind of money, in terms of medication.”

If Buren wanted to take the drug, he would have to pay $28,000 out of pocket per year. He doesn’t usually qualify for clinical trials because of his pre-existing conditions.

“Very few minorities are involved in clinical studies,” Buren said. “Mostly because they have situations like mine where things eliminate them.”

Alzheimer’s runs in his family. Three of his relatives have died from the illness, and he believes it will also take his life. But he is holding out hope that he has access to a treatment one day that could change the progression of his illness.

The Alzheimer’s Association says this proposal restricts care and creates barriers. To see their statement, click here.

Clipped from: https://spectrumlocalnews.com/nc/charlotte/health/2022/02/28/medicare-medicaid-may-not-cover-cost-of-new-alzheimer-s-drug

Posted on March 3, 2022 by MM_ADMIN

Eli Lilly’s Medicaid rebate payments under fire as whistleblower lawsuit heads to trial

MM Curator summary

[MM Curator Summary]: Lilly is accused of failing to increase Medicaid rebates while its prices were increasing.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

Eli Lilly is headed to trial over claims it skimped on Medicaid rebate payments.

U.S. District Judge Harry Leinenweber has shot down Lilly’s motion to end a 2014 whistleblower lawsuit, concluding that the Indianapolis-based pharma previously misled the Centers for Medicare & Medicaid Services (CMS) about the prices it charged distributors for its drugs.

Lilly, for its part, argues government pricing rules were unclear until CMS issued specific guidance in 2016.

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The case, originally filed in the U.S. District Court for Northern Illinois, will now be heard before a jury. The jurors will need to decide whether Lilly acted deliberately and caused a loss to the federal government and certain state’s Medicaid agencies.

“Lilly is evaluating its options based upon the court’s ruling,” an Eli Lilly spokesperson said over email.

The lawsuit stems from Lilly’s role in the Medicaid Drug Rebate Program from 2005 to 2016. For drugmakers to sell their meds to Medicaid patients, they must pay a rebate back to the state and federal governments to lower the cost of the program, the suit says.

The rebates are calculated using a so-called average manufacturer’s price (AMP), which is defined as the “average unit price paid to the manufacturer for the drug in the [United] States by wholesalers for drugs distributed to the retail pharmacy class of trade,” Leinenweber explained in a new order filed Monday in the Eastern Illinois U.S. District Court.

Drugmakers must adjust the AMP if “cumulative discounts or other arrangements” later change their realized prices, according to the court filing. But, in the lawsuit, whistleblower Ronald Streck alleged the company shortchanged the government because it didn’t increase its rebates as its prices grew over time.

“Lilly’s AMP calculations and related certifications were factually and legally false,” the judge wrote.

Lilly started including the price increase value as part of its AMP submissions in 2017.

The company isn’t alone in coming under fire for allegedly shortchanging Medicaid. Pfizer, AstraZeneca and Mylan are among the companies that have inked settlements to resolve allegations they underpaid the federal program.

Clipped from: https://www.fiercepharma.com/pharma/eli-lillys-medicaid-rebate-payments-under-fire-2014-whistleblower-lawsuit-rolls

Posted on February 11, 2022 by MM_ADMIN

CA- ‘Somebody is gonna die’: Omicron hobbles California’s new Medicaid prescription system

MM Curator summary

[MM Curator Summary]: Magellan is struggling to keep up with requests for prior authorization and call center calls during the pandemic.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

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Problems with California’s new Medicaid prescription drug program are preventing thousands of patients from getting their medications, including some life-saving ones. State officials say they’re working on fixes.

A month into its debut, California’s new Medicaid prescription drug program is riddled with problems, leaving thousands of patients without medications — often after languishing on hold for up to eight hours on call center phone lines.

On Jan. 1, the state handed control of its Medicaid drug program, known as Medi-Cal Rx, to Magellan Health, which is administering prescription drug coverage for California’s 14 million Medicaid patients, most of whom previously got their medications from about two dozen managed-care plans.

But Magellan has tripped up implementation. It didn’t anticipate that calls to its help center would take so long, and a large number of its call center workers have been sickened during the Omicron surge — with 100 of 220 absent during the first two weeks of January, state officials said. Magellan also didn’t get some data it needed from managed-care plans.

This has left Californians from Redding to Oceanside without their medications for days, sometimes weeks.

“We’ve had many, many patients who are sort of in this limbo,” said Dr. James Schultz, chief medical officer of Neighborhood Healthcare, which operates 17 clinics in Riverside and San Diego counties.

“Somebody is gonna die if they haven’t already,” added Schultz, who said some of his clinics’ patients have experienced delays getting life-saving medications such as antibiotics or those used to prevent seizures and blood clots. “That’s why we’re fighting so hard.”

Officials from the California Department of Health Care Services, which administers Medi-Cal, California’s Medicaid program for low-income people, called the problems “unacceptable.” The department and Magellan Health are scrambling to find missing patient data, fix improper claim denials, add call center staffers, and provide pharmacists with codes to override prescription denials.

Handing over Medi-Cal’s drug program to a single pharmacy benefit manager is one of Gov. Gavin Newsom’s big health care initiatives. His administration estimates it will save the state $414 million in the 2022-23 budget year alone, in part by getting bigger discounts on drugs than the managed-care insurance plans did.

But the massive transfer has been rocky for many providers, pharmacists, and patients, especially patients who use medications their doctors consider medically necessary but require prior authorizations from Medi-Cal Rx and are generally not on the state’s approved drug list. Magellan has received more than 95,000 prior authorization requests since it took over, state officials said.

In the months leading up to the switch, patients and doctors were told all their medications would be grandfathered into the new system for 180 days, but that hasn’t always been the case.

Marilyn Bloomer of Oceanside had gone nearly a week without a specialty histamine prescription that she takes to regulate an overactive allergic response in her body, a condition known as mast cell activation syndrome, because her pharmacist and Magellan said it was no longer covered. When she finally reached someone at the Magellan call center last week — six hours after she placed the call — a supervisor gave her a code the pharmacist could use to override the denial.

But the pharmacy wouldn’t accept it.

On Monday, Bloomer’s health plan secured an emergency five-day supply for her, but she doesn’t know what will happen when it runs out. Without the medication, called ketotifen, Bloomer gets bright red, patchy hives all over her face.

“I’m getting the runaround, and I’m getting confused,” said Bloomer, 57, who said her face had been beginning to swell. “It’s beyond frustrating.”

State officials said Magellan representatives had answered more than 81,000 calls at the 24-hour, 7-day-a-week call center as of Feb. 1 and paid 11 million prescription claims totaling approximately $1.3 billion as of Feb. 4.

“As we sit here, clearly five weeks into operations, Magellan, our contractor, has really struggled with some service operations,” Jacey Cooper, the state’s Medicaid director, told lawmakers at an Assembly budget subcommittee hearing Monday.

She said that the Department of Health Care Services is holding daily meetings with Magellan to discuss its management of the program and that the state has provided staffers to help answer calls at the Medi-Cal Rx call center. The immediate goal, Cooper added, is to ensure medications that require prior authorization are approved within 24 hours. In the meantime, she said, the state has given pharmacies the go-ahead to fill emergency prescriptions for up to two weeks. It also has removed prior authorization requirements for some medications.

Magellan referred media questions to the Department of Health Care Services.

After the hearing, Assembly member Joaquin Arambula (D-Fresno), who chairs the Assembly budget subcommittee that oversees Medi-Cal, said he is satisfied with the administration’s plan. “I believe there’s a real path forward to implementing the system successfully,” he told KHN.

Sharon Ng, pharmacy director at the Venice Family Clinic, isn’t as optimistic. Even though state officials say they have given pharmacies authorization to use override codes and fill temporary emergency prescriptions, prescriptions continue to be denied.

“It’s just chaos,” Ng said. “We just kept getting rejections. It’s been so frustrating because the rejection doesn’t tell you what’s wrong. And then if you finally go through their lines, they don’t help you either. They’re just guessing.”

What Magellan needs, she added, is a dedicated hotline for pharmacists — like the managed-care plans had — so they don’t have to compete with Medi-Cal patients.

Patients and legal advocates say they are confounded by the chaos because both the state and Magellan had plenty of time to prepare for the rollout, since the program was delayed by nearly a year after the health care company Centene announced plans to acquire Magellan.

Medi-Cal Rx finally launched Jan. 1 after state officials ruled in December that Magellan could independently administer the Medi-Cal drug benefit without any conflict of interest with its new owner.

“Magellan should have come into this understanding fully what the volume and the needs were going to be,” said Jack Dailey, an attorney with the Legal Aid Society of San Diego, which is representing some Medi-Cal enrollees unable to get their medication. “I did not think this is where we would be a month into this process.”

Shah’ada, a mother in Redding, has spent the past two weeks desperately trying to get her 16-year-old son’s birth control medication approved. He is transgender and hadn’t had a period in five years until last week, she said. Without the birth control, he bled for 11 days.

“Things in our household have started dissolving,” said Shah’ada, who asked that her last name not be published to protect her son’s privacy. “He’s been depressed, unable to go to school for several days, really high anxiety. It’s just very emotional and frustrating.”

When Shah’ada tried to fill the prescription, the pharmacist told her that it was denied because of her son’s gender.

She dialed the prescription call center every chance she got. Her managed-care plan suggested there was a glitch in the system but didn’t know how to help since it no longer controls prescription drugs for its members. Her son’s doctor tried to submit more paperwork to no avail, and she submitted a grievance to Medi-Cal Rx.

Over the weekend, she finally got approval for her son’s birth control, but she’s worried about refilling the prescription in three months.

Schultz, the San Diego County physician, said his staff is also directed to the call center to ask questions when patients are denied medications. But the appeal form they are asked to fill out is incomplete, he said, lacking a section for the previous medications a patient has tried, for instance, information Medi-Cal Rx requires for approval.

“We’ve got people out with COVID. We really don’t have time to sit on hold for eight hours. We have dozens of patients in the same boat,” Schultz said. “Theoretically, all of our staff could be tied up on hold with Magellan. We can’t do it.”

Clipped from: https://lookout.co/santacruz/health-wellness/story/2022-02-09/omicron-hobbles-california-new-medicaid-prescription-system

Posted on January 14, 2022 by MM_ADMIN

Sixth state settles with Medicaid contractor

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[ MM Curator Summary]: Centene will pay NH $21M for spread pricing allegations.

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.

New Hampshire became the sixth state to announce a settlement with a Medicaid managed-care company that Ohio first accused of ripping off taxpayers.

In a statement last week, New Hampshire Attorney General John M. Formella said that St. Louis-based Centene had agreed to pay the state $21.1 million to settle state claims that Centene overbilled the state’s Medicaid department by $2.4 million for prescription drugs between the beginning of 2016 and the end of 2021.

The funds will come from $1.3 billion Centene set aside for such disputes last year. Mississippi, Kansas, Arkansas and Illinois already have announced settlements totaling $154 million with the company.

As it has in agreements with other states, Centene admitted to no wrongdoing in its settlement with New Hampshire.

Ohio Attorney General Dave Yost in March sued the managed-care giant, accusing it of overbilling that state’s Medicaid program by tens of millions. Centene swiftly settled in June, agreeing to pay Ohio more than $88 million and setting aside funds to pay 21 other states, which haven’t filed lawsuits in the matter.

Centene is the largest Medicaid managed-care company in the United States. In that capacity, it creates networks of patients and providers such as doctors and hospitals on behalf of the state. It also hired or used its own subsidiaries known as pharmacy benefit managers to facilitate drug transactions.

Disputes over the company’s conduct go back to 2018, when The Columbus Dispatch reported that pharmacy benefit managers owned by Centene and CVS appeared to be claiming they did duplicate work in 2017 for $20 million. Both companies denied that they were double-dipping at taxpayer expense.

New Hampshire began its probe after learning of the action in Ohio.

“The Department of Health and Human Services (“DHHS”) and the Department of Justice (“DOJ”) began a review of Centene’s provision of pharmacy benefit services after similar investigations in other states became public,” Formella’s statement said. “The review focused on concerns regarding Centene’s practices related to the reporting of pharmacy benefit services costs in the Medicaid program, including the pricing of prescription drugs.”

The investigation “concluded that Centene’s inaccurate reporting of pharmacy benefit services costs, and the State’s use of that data received from Centene, resulted in at least a $2.4 million negative financial impact to the State during the settlement period,” the statement said. “In lieu of further review, investigation, and potential litigation, Centene and the State of New Hampshire have agreed to settle this matter in exchange for payment in the amount referenced above and the implementation and continuation of business practices that provide full transparency related to pharmacy benefit claims.”

Ohio authorities caused controversy in August when — just two months after the settlement was announced — the Ohio Department of Medicaid said that it would give Centene a multi-billion-dollar managed-care contract as part of the largest public procurement in Ohio history. Allegations of past misconduct were not counted against the company in a competitive procurement process.

Centene has said that the moves aren’t related to the settlements, but in the wake of the Ohio suit the company has said it’s getting out of the pharmacy-middleman business altogether and Michael Neidorff, its CEO who made $59 million in 2020, announced his retirement.

This story was republished from the Ohio Capital Journal under a Creative Commons license.

Clipped from: https://go.tiffinohio.net/2022/01/sixth-state-settles-with-medicaid-contractor/