Pay attention for MI MCO Increase to Prescription Cost Basis reimbursement as of February 1

As a follow-up to our notice last week on the Michigan Medicaid managed care prescription program reforms to end PBM spread pricing abuses that IPC and AAPA worked on jointly to see enacted, the state mandated transparent, cost basis reimbursement to pharmacies is set to start Monday.

You should have received information on this change from Michigan Medicaid and in a notice from each Michigan MCO PBM of this change in both drug ingredient costs and COD professional fee for each Medicaid managed care prescription you will process starting Monday, February 1 in accordance with the Michigan Appropriations Act language.

The MMC prescription claims reimbursement language you will see on Monday is as follows:

Brand Drug Ingredient Cost – NADAC file price, or if NADAC is not available the lesser of:
AWP – 16.7%
WAC
Usual and Customary Retail Price

Generic Drug Ingredient Cost – NADAC file price, or if NADAC is not available the lesser of:
AWP – 16.7%
WAC
Usual and Customary Retail Price

Professional Dispensing Fee – the following four tired per claim fee system will be used for pharmacies entities that own seven or less pharmacy locations (i.e. non-chain stores):

Specialty drug (determined by MI Medicaid)                                            = $ 20.02
Non-Specialty preferred drug (MI Medicaid PDL)                                    = $ 10.80
Non-Specialty Available drug (not on PDL)                                              = $ 10.64
Non-Specialty non preferred drug (has MI Medicaid PDL alternative)     = $ 9

These contract terms are dictated by Michigan state law to preserve Medicaid patients access to their prescription benefit by providing only for at total cost of service payments to pharmacies that will also end MCO spread pricing to benefit of Michigan taxpayers.

Other benefit design controls that Michigan imposed on MCO’s that apply to these cost-based claims reimbursement system starting on February 1 are:

•    PROHIBITION against PBM claims claw back or PBM fee INCREASES.

•    Contract protections against restrictive pharmacy provisions (i.e. Prior authorizations)

•    A State-run Medicaid Managed Care single PDL mandate

All these changes were discussed in last week’s AAPA virtual town hall. You can review each section of the town hall using the links below.

Senate Majority Leader, Mike Shirkey (R) and State Senator, Curtis VanderWall (R)

Speaker of the Michigan House of Representatives, Jason Wentworth (R)

State Senator District 3, Sylvia Santana (D)

House Democratic Minority Leader, Donna Lasinski (D) and State Rep., Abdullah Hammoud (D)

Director of MDHHS, Elizabeth Hertel

If you do not see an improvement in your drug ingredient or fee payment for claims submitted on Monday from what you are currently receiving from a Michigan Medicaid managed care PBM for any particular specialty, or non-specialty, contact either the Michigan Medicaid pharmacy desk, the PBM, AAPA or your IPC member experience team professional.

Achieving this policy goal was a major achievement for AAPA, IPC and all involved pharmacy stakeholders in Michigan. We must remain vigilant to ensure this Medicaid Rx transparent, cost-basis reimbursement conversion is implemented properly in accordance with the law.

Questions or Concerns? Contact IPC’s Government Relations Team at: [email protected]