Empire Justice Testimony on Medicaid Managed Care "Carve-in" of Pharmacy Benefits

NYS Assembly Committee on Health

Public Hearings on the Medicaid Managed Care Prescription Drug Carve-In Implementation

INTRODUCTION

We appreciate the opportunity to submit this testimony describing how Medicaid managed care beneficiaries have been affected by the change to their prescription drug benefit. 

Empire Justice is a statewide, multi-issue, multi-strategy public interest law firm focused on changing the “systems” within which poor and low income families live. With a focus on poverty law, Empire Justice undertakes research and training, acts as an informational clearinghouse, and provides litigation backup to local legal services programs and community based organizations.  As an advocacy organization, we engage in legislative and administrative advocacy on behalf of those impacted by poverty and discrimination.  As a non-profit law firm, we provide legal assistance to those in need and undertake impact litigation in order to protect and defend the rights of disenfranchised New Yorkers.

Empire Justice serves on the Steering Committee of Medicaid Matters New York and the Medicare Part D Consumer Coalition, and the Policy Committee of Health Care for All New Yorkers

We are also members of the statewide Managed Care Consumer Assistance Program (MCCAP) and the Community Health Advocates (CHA) networks.  Our health team provides technical assistance and support to HIICAP and local CHA community-based organizations across New York State.  Legal staff housed in our Albany, Rochester and Long Island offices also directly assist consumers who face obstacles to accessing necessary medical care.  Many of the people we work with have difficulty navigating the health care system, and those difficulties have only intensified since Medicaid’s prescription drug benefit was carved into the managed care benefit. 

We would like to start by acknowledging the work of the NYSDOH policy and pharmacy department for accomplishing what must have been a Herculean task. 

The New York State Department of Health (NYSDOH) had just six months to implement the statutory Medicaid managed care pharmacy benefit carve-in.  At the same time, NYSDOH had to put other significant changes to the Medicaid prescription drug benefit into place.  At the same time, NYSDOH was gearing up for major changes to the EPIC pharmacy benefit. 

NYSDOH MEETINGS WITH STAKEHOLDERS – A BEST PRACTICE

In June of 2011, the NYSDOH pharmacy policy unit began holding “MRT pharmacy stakeholder” bi-weekly phone meetings.  The meetings were designed to keep stakeholders informed about the status of upcoming MRT (Medicaid Redesign Team) pharmacy changes, including MMC pharmacy carve-in, and provide a mechanism for stakeholders to provide input to NYSDOH.  NYSDOH developed a Questions and Answers (Q&A) document for pharmacy stakeholders, which they updated after each meeting and e-mailed to the stakeholder call-in list. 

Invitations to the stakeholder meetings were sent to other state agencies, health plans, drug companies, medical providers, pharmacists, and consumer advocates.  The calls are open meetings in the sense that anyone can join, and in fact DOH asked stakeholders to forward the meeting information along to anyone they might have missed.    Participants are simply required to fill out a “notice of appearance” for each meeting attended. 

The pharmacy stakeholder meetings have clearly been time-consuming for DOH staff, but they have been invaluable in terms of preparing consumer advocates for the coming changes, providing ongoing updates, clarifying implementation details and inviting feedback from stakeholders.  The meetings provided a meaningful forum to raise our concerns and hear those of other stakeholders.  We would urge other departments to adopt this best practice during implementation of major changes to the Medicaid program.

While the MRT pharmacy stakeholder calls have been an inclusive process, unfortunately, consumer advocates were not been at the table at earlier points in the process when important decisions were made.  For example, contracts were negotiated with the plans without consumer input.  On at least one occasion, a policy that was favorable to consumers (transition rights for new enrollees), was dropped from the contract, presumably at the request of the plans after implementation was initiated. 

CONSUMERS CONFUSED BY NOTICE OF THE CHANGE

In late August 2011, NYSDOH sent mass notices to all MMC and Family Health Plus recipients explaining that pharmacy benefits would be provided by managed care plans as of October 1, 2011. 

Many beneficiaries clearly did not understand the information in the notices. [1]

Unfortunately, even for people who were able to comprehend the notices, the notices omitted a piece of critical information – namely, that beneficiaries could appeal a plan’s decision not to cover a medically necessary drug.     

When we brought the issue to NYSDOH’s attention, staff indicated that the plans would be notifying beneficiaries about their appeal rights.  DOH also trained Medicaid helpline staff to inform consumers about their appeal rights.   While these actions are helpful, they are not an acceptable substitute for additional WRITTEN notice from DOH to each MMC beneficiary clearly informing them of their appeal rights. 

In addition, local district staff and administrative law judges should be trained on beneficiary appeal rights.  Two recent fair hearing decisions involved individuals who had requested hearings after they got the mass notice regarding changes to the pharmacy benefit and testified that they needed off-formulary drugs (FH # 5909268J,  FH # 5899469L).  The decisions that issued concluded that the Commissioner lacked jurisdiction over the change in pharmacy coverage from FFS Medicaid to MMC.  The decisions did not reach the merits of whether an exception should have been made to the plan’s formularies or whether the plans had provided the required notice to the beneficiaries about their right to appeal their plan’s decision to deny coverage of medically necessary drugs.  These failures present a serious due process issue that must be addressed.

CONSUMERS NEED BETTER ACCESS TO PLAN INFORMATION: FORMULARIES, LIMITS ON DRUGS, AND EXEMPTION FORMS

Although the MRT initiative requires that plan formularies be comparable to the Medicaid formulary, it does not require them to be identical.  Thus, the specific drugs on the formularies, and the “utilization controls” or limits plans impose on the drugs, can vary from plan to plan.  Enrollees and advocates are forced to research different rules and formularies for each denial. 

The fact that formularies vary also makes choosing plans very difficult for Medicaid beneficiaries.  No software like the Medicare Part D plan finder is available to assist with plan comparisons.  Without a tool that can compare formularies, advocates are hard pressed to advise consumers whose enrollment choices depend on access to specific drugs.  Unfortunately, although enrollment brokers and local districts have some plan specific information, they are not able to advise callers as to what drugs are included on the which plans’ formularies or tell them anything about the limitations different plans impose on access to specific drugs.  Although NYSDOH has encouraged plans to post their formularies and explain their limitation policies, it is not easy to find this information on line or access knowledgeable plan representatives by phone. 

Standard requirements for providing access to this kind of critical information would be invaluable from a consumer and provider perspective.  In addition, it would be extremely helpful if plans were required to use standardized forms for requesting exemptions to plan formularies and appeals to denials.  Medicare Part D plans are now required to use standard exemption/appeal forms.  We recommend that NYSDOH move in the direction of standardization, beginning with developing a standard exemption that all plans would be required to accept.

TOO MANY CHANGES TOO FAST RISK DISRUPTING ACCESS

In simple terms, there have been too many changes happening too quickly.  Confusion leads to mistakes, which often result in denials of access.  At the same time as the Medicaid Managed Care pharmacy carve-in is being implemented, there have also been changes to the mandatory enrollment in Medicaid managed care, the fee-for-service pharmacy benefit and an overhaul of the EPIC pharmacy benefit.  To add to the mix, the Medicare Part D open enrollment period changed this year, which had a significant effect on dual eligibles. 

For example, in addition to the mass notice regarding the pharmacy carve-in, NYSDOH sent another mass notice in August informing dual eligibles about the end of the Medicaid wrap-around coverage for Medicare Part D drugs.  This notice also caused panic and concern.  The vast majority of individuals were unaffected by this change (since only about 1% of all duals were actually using the wrap), but many beneficiaries who received the notice feared that they would not be able to obtain the drugs they needed.  Beneficiaries, and some pharmacists and providers, incorrectly believed that Medicaid would no longer wrap around Part B drugs or cover Part D excluded drugs, such as benzodiazepines or barbiturates. 

NYSDOH issued clarification to providers and pharmacists explicitly stating that Medicaid would continue to wrap around Part B drugs as well as Part D excluded drugs.  But there were literally hundreds, if not thousands, of phone calls to local HIICAP offices in response to the mass notice.  Our office received calls and e-mails about several dual eligibles who were told by their pharmacist that they had to pay the 20% co-pay for the Part B drugs.  We helped address many problems, but always fear that the clients who reach us are only a fraction of those who may experience disruptions in access to critical drugs.

Pharmacists have also been struggling with the changes in managed care and how they relate to payment for prescriptions.  For example, pharmacists expressed concern on the MRT pharmacy stakeholder calls that many Medicaid recipients, particularly those new to managed care, do not know which plan they are enrolled in.  Without this information, pharmacists are unable to bill for the prescriptions.  Although NYSDOH informed the pharmacists who were on the call of a protocol they could use to obtain the enrollment information, we worry that information about the protocol may not trickle down to all pharmacists quickly enough to avoid disruptions in access.

Pharmacists have also been confused about how the carve-in affects rules regarding co-pays.  We learned on the MRT pharmacy stakeholder calls that pharmacies thought the carve-in meant the pharmacy could now refuse to fill a prescription if the recipient did not have the co-pay.   DOH repeatedly clarified that this was inappropriate but we have heard of specific problems with refusals based on a lack of co-pay and worry that not all pharmacists have accurate information. 

VIGOROUS PLAN OVERSIGHT IS NEEDED

We learned this lesson from Medicare Part D – you need vigorous oversight to weed out any improper plan behavior as quickly as possible, to help struggling plans improve their performance, and to share and encourage best practices and reward plans who provide exemplary customer service.  Also to make sure all the plans are kept abreast of Medicaid policies and procedures and changes.    With MMC pharmacy carve-in and the rapid expansion of MMC in general, it is absolutely critical that DOH continue to closely monitor the plans on an ongoing basis.    We also recommend that DOH adopt a more formal client and advocate complaint mechanism, like the complaint tracking module (CTM) system used by CMS for Part D complaints.  CTM complaints help keep CMS informed about systemic plan problems and provide a fast track informal resolution process as an alternative to the formal appeals process. 

CONCLUSION

We’d like to close with a few stories of individuals we have helped with prescription drug access problems tied directly to the pharmacy carve-in.

One gentleman, an SSI recipient, wound up walking away from the pharmacy counter because the pharmacist said his Medicaid wasn’t active.  We contacted the Medicaid supervisor and learned that he had been newly enrolled into a managed care plan and did have coverage; however the supervisor couldn’t tell us the plan ID number.  We had to contact the plan directly to get the information the pharmacist needed to bill the plan.  We sent him back to the pharmacy armed with written instructions for the pharmacist and he was able to get his medication. This individual was homeless and could not read or write English.  There is no way he could have straightened this out on his own.

Another case involved a transplant patient who was facing loss of Medicaid coverage because of an eligibility problem.  Although we helped her straighten out her eligibility problem, the changes the district made to her case to keep her coverage active coincided with the pharmacy carve-in in October.  Our client ended up caught between fee for service and managed care coverage with neither providing payment for her prescriptions.  It took almost two weeks before the pharmacy coverage was straightened out.   In the meantime, our client had to use her credit card to obtain a short term supply of her transplant medications, which cost $2000 per month.  Not all clients have access to a line of credit in these times of crisis.

Another transplant patient called our office in tears after she found out at the pharmacy counter that she had no health insurance coverage.  She had just transitioned from fee for service Medicaid into Family Health Plus, but had never received an enrollment packet for the managed care plan she chose and that plan had not yet activated her coverage.  Fortunately, advocacy with the local Medicaid office resulted in her getting the transplant medications covered.  We immediately contacted the local social services commissioner due to the urgency of the situation, and his Medicaid staff resolved the issue later the same day.   This client had tried going to DSS on her own without success.

Thank you for the opportunity to present testimony about implementation of the Medicaid managed care prescription drug carve-in.  Should you have any questions, please do not hesitate to contact us.


End Note:
 [1] Per recent fair hearing decisions #5920845Y (Appellant, an SSI recipient, thought he was losing his Medicaid coverage altogether); 5915575N (Appellant did not understand how to access a transition supply);  5920845Y (Appellant, an LEP (Limited English Proficiency) speaker thought the Medicaid program might be discontinuing pharmacy benefits.