department of health and social services

Division of Social Services

Statutory Authority: 31 Delaware Code, Section 512 (31 Del.C. §512)

ORDER

final

Title XIX Medicaid State Plan with respect to the Pharmaceutical Services Program

Nature Of The Proceedings

Delaware Health and Social Services (“Department”) / Division of Social Services initiated proceedings to amend the Title XIX Medicaid State Plan with respect to the Pharmaceutical Services Program: 1) to implement a prior authorization process with a preferred drug list (PDL); 2) to revise the prescription quantity and duration provisions; and, 3) to seek supplemental drug rebates from pharmaceutical manufacturers. The Department’s proceedings to amend its regulations were initiated pursuant to 29 Delaware Code Section 10114 and its authority as prescribed by 31 Delaware Code Section 512.

The Department published its notice of proposed regulation changes pursuant to 29 Delaware Code Section 10115 in the July 2005 Delaware Register of Regulations, requiring written materials and suggestions from the public concerning the proposed regulations to be produced by July 31, 2005 at which time the Department would receive information, factual evidence and public comment to the said proposed changes to the regulations.

Summary Of Proposed Changes

Purpose

This action implements a preferred drug list and prior authorization for pharmacy services. The agency submitted an amendment to the Title XIX Medicaid State Plan to the Centers for Medicare and Medicaid Services (CMS) to implement:

• a prior authorization process with a preferred drug list (PDL) for certain designated drugs in selected therapeutic classes covered under the prescription drug program;

• revisions to prescription quantity and duration provisions; and,

• supplemental drug rebates.

Statutory Basis

• Social Security Act, Title 19, Section§1927

• 42 United States Code s1396r-8

Amending the Following State Plan Page

Attachment 3.1-A, Page 5 Addendum, Limitations

Summary of Provisions

To ensure that the state delivers a medical assistance prescription drug program, which is both cost effective and prudently administered, the following describes the coverage changes for prescribed drugs and/or supplies, effective April 1, 2005 for Prior Authorization with Preferred Drug List and Supplemental Rebates:

1) Prior Authorization with a Preferred Drug List

a) A process is established which utilizes a preferred drug list (PDL) for selected therapeutic classes. Drugs included on the preferred drug list (PDL) are automatically prior authorized. Drugs in those classes that are not included on the PDL shall require prescribers to obtain prior authorization. The Pharmaceutical & Therapeutics (P&T) Committee, comprised of physicians, pharmacists and community members appointed by the Secretary, Delaware Health & Social Services, selects drugs for the PDL.

b) Providers are notified of the drugs selected for placement on the PDL by selected therapeutic classes prior to implementation of the prior authorization process and as additional drugs are subsequently added to the list. This information is posted on the DMAP website.

c) The prior authorization process provides for a turn-around response within 24 hours of receipt of a completed prior authorization request from a prescribing provider by telephone, mail or electronic communication. In emergency situations, providers may dispense at least a 72-hour supply of medication as mandated and pursuant to 42 United States Code s1396r-8.

d) The Drug Utilization Review (DUR) Board will make recommendations to the Department regarding drugs to be considered for prior authorization.

2) Prescription Quantity and Duration

a. Dosage limits: Medications are limited to a maximum dose recommended by the FDA, peer review journals that indicate that doses that exceed FDA guidelines are both safe and effective or doses that are specified in regional or national guidelines.

b. Quantity limits are placed on therapeutic categories that will allow for coordinated care and improve outcomes. Limits exist for:

1) Sedative hypnotics-15 doses per 30 days

2) Triptans, acute treatment of migraines, 9 doses per 45 days

3) Opioid analgesics-200 doses per 30 days

4) Skeletal muscle relaxants-120 tablets/capsules per 30 days

5) Benzodiazepines-120 tablets per 30 days

6) Tramadol-240 tablets per 30 days

7) Narcotic cough medications-480ml per 30 days

8) Adjunctive anticonvulsants-240 tablets/capsules per 30 days

9) Nebulizer solutions-3 acute exacerbations per 30 days

10) Clients utilizing greater than 15 unique medications per 30 days

11) Medications that are dosed once a day are limited to one dose per day unless that total dosage required is within the limits stated above and require more than one tablet/capsule to obtain the required therapeutic amount.

c. Duration of therapy

1) Nicotine cessation products are limited to the duration that has been approved by the FDA.

2) Palivizumab-6 months during the high viral period of the year.

d. Prescriptions are limited to a quantity not to exceed the greater of 100 dosing units or a 34-day supply except for drugs selected and received through the mail order process.

3) Supplemental Drug Rebates

a. CMS has authorized the state of Delaware to enter into The State of Delaware Department of Health and Social Services supplemental drug rebate agreement. This supplemental drug rebate agreement was submitted to CMS on April 7, 2005 and has been authorized by CMS.

b. The Division of Social Services (DSS) has contracted with an independent organization to negotiate supplemental rebate agreements with manufacturers.

By implementing these processes, the Department ensures that all eligible Medicaid beneficiaries have the same comprehensive pharmacy coverage available to them, while reducing the cost of pharmaceutical products to the state. Physicians and patients continue to have access to the same FDA-approved drugs as they have had in the past.

Summary of Comments Received with the Agency Response

Delaware Health & Social Services (DHSS) / Division of Medicaid & Medical Assistance (DMMA) received the following comments from the public on the current proposal to amend Title XIX of the Medicaid State Plan to implement Prior Authorization, Preferred Drug List and Supplemental Drug Rebates, effective April 1, 2005. The emergency and proposed regulations were published as 8 DE Regs. 6 & 73 in the July 1, 2005 issue of the Delaware Register of Regulations. DSS received comments on the policy from four (4) organizations. Their comments do not support the adoption of this amendment; they fall in nine discrete areas. Comment areas and agency responses are summarized below.

DSS has considered each comment and responds as follows:

1. Concept of Preferred Drug Lists or Formularies

• The Department remains committed to obtaining the best and most cost-effective services for Medicaid clients, including prescription drugs.

Prior Authorization, Preferred Drug List and Supplemental Drug Rebates are essential parts of the Department’s strategy to contain costs in its pharmaceutical services program as well as helping prescribers and pharmacists assure Medicaid clients are receiving the most effective medications.

Medicaid covers all FDA-approved drugs but requires clinical criteria be met before certain drugs are dispensed. The Department believes this initiative empowers prescribers to prescribe based on their expertise, specialty, and proven track record in prescribing to their Medicaid patients.

The Department has the fiscal responsibility to provide medically necessary drugs in the most cost-effective manner. The Department informs providers through various methods, including mailings, website postings, newsletters, and e-mail notification of changes that are discussed at the Drug Utilization Review (DUR) Board and Pharmaceutical & Therapeutics (P & T) Committee meetings or is proposed through rulemaking.

No change to the state plan amendment will be made because of this comment.

2. Prior Authorization

• Please be aware that these drug policies are dynamic and will be revised as necessary to remain consistent with changes in Department policy and evidence based medical standards.

• Drug prior authorization requests are individually reviewed and approvals granted on a case-by-case basis, as submitted information/documentation warrants.

• Pharmacy overrides are still available for emergency medically necessary situations.

• As for “an unwieldy prior authorization process” creating a need for increased use of emergency room care, etc., the Department maintains that access for Medicaid clients to effective and cost-effective medications is intended to prevent more expensive medical treatments and ultimately to save the state money.

• As recommended by the Kaiser Commission, the Department is already reviewing “due process” procedures for the prior authorization process. Additionally, the Department also communicates with providers by way of mailings, on-line newsletters, provider bulletins, site visits, and meetings.

No change to the state plan amendment will be made because of this comment.

3. Preferred Drug List with Prior Authorization

• The formula for inclusion on the preferred drug list looks first at effectiveness and then at other factors such as cost and patient compliance.

• The Pharmaceutical & Therapeutics Committee will identify certain drugs from each therapeutic drug class of medications as “preferred”. The Preferred Drug List posted on the DMAP website shows a “grandfathered” designation for preferred agents (no PA required) and non-preferred agents (PA is required).

• Regarding the recommendation to publicize the availability of the PA process, please view the following notices on the DMAP website addressing prior authorization, preferred drug list, limitations on prescribed drugs and co-payments:

http://www.dmap.state.de.us/downloads/bulletins.html

1) “IMPORTANT NOTICE Only for Clients currently eligible for Delaware Medical Assistance Program Pharmacy Benefits; PLEASE READ!”;

2) Client Brochure: DMAP Pharmacy Changes;

3) DUR Notification: a form of this letter is mailed to all clients when a drug they are taking is placed on the Preferred Drug List;

4) PDL Notification: a form of this letter is mailed to all prescribing practitioners when a drug taken by one of their clients is placed on the Preferred Drug List.

No change to the state plan amendment will be made because of this comment.

4. Consumer Protections

• In response to the following recommendations: “adequate and written notice”; “written explanation of the reasoning…to deny approval for any drug”; “person’s right to appeal”:

The Department intends the Prior Authorization provisions to add information to the prescribing process, not to replace the clinical judgment of the prescriber. By more carefully assessing patterns of utilization and identifying opportunities to educate prescribers and participants, this will increase the cost-efficiency of the drug benefit and allow taxpayer funds to help the greatest number of eligible persons. The Prior Authorization initiative does not deny benefits or eligibility to any participant, rather it places the request in a pending status until required documentation is received from the prescriber and therefore does not trigger notice and appeal rights.

No change to the state plan amendment will be made because of this comment.

5. Pharmacy Co-pay

• The proposed amendment published in the July1, 2005 issue of the Delaware Register of Regulations relates only to Prior Authorization, Preferred Drug List and Supplemental Drug Rebates. This comment is beyond the scope of the proposed regulation. The maximum co-payment chargeable to a Medicaid client is set by federal law at 42 CFR §447.54. At present, the policy remains as is.

No change to the state plan amendment will be made because of this comment.

6. Retroactive Regulations

• The Department notes that it published in the April 1, 2005 issue of the Delaware Register of Regulations a “Notice of Intent” to submit a state plan amendment to the Centers for Medicare and Medicaid Services (CMS) to implement effective April 1, 2005: 1) a prior authorization process with a preferred drug list (PDL) for certain designated drugs in selected therapeutic classes covered under the prescription drug program; 2) revisions to prescription quantity and duration provisions; and, 3) supplemental drug rebates.

The “Notice of Intent” includes the following information: 1) Statement of Purpose of the Amendment; 2) Statutory Basis for the proposal; 3) A list of state plan pages to be amended; and, 4) A detailed summary of the provisions of the amendment that included the following headings: Prior Authorization with Preferred Drug List, Standards for Prescription Quantity and Duration and, the Benefit of Supplemental Drug Rebates.

You have obviously noted the “Notice of Intent” and the “Proposed Regulation” are almost identical in content. In the proposed regulation we simply clarified that medications are limited to a maximum dose recommended by the FDA; listed the therapeutic categories with limits; and, clarified the duration of therapy.

The Department acknowledges that the “Notice of Intent” should have been promulgated as a “Proposed Regulation”. However, the Department has since submitted the appropriate documents to the Registrar of Regulations pursuant to the Administrative Procedures Act and posted on the Delaware Regulations website. The Department has taken steps to ensure that this does not happen again. Notwithstanding the mistake, the Department has not received any information that any interested party did not have actual notice or the correct information regarding the process for adopting the state plan amendment, or was in any way prejudiced in availing itself of the opportunity for comment. The Department does not regard this mistake as a fatal defect in the notice and comment procedures.

No change to the state plan amendment will be made because of this comment.

7. Dosage Limits

• Dosage limits are currently listed in the regulations as guidelines. The Department will use FDA guidelines, peer review journals, or guidelines published by established expert groups. The Prior Authorization process allows for deviations from those guidelines where appropriate.

• All Medicaid services must be medically necessary; therefore, no conflict exists between the amendment provisions and the EPSDT mandate.

No change to the state plan amendment will be made because of this comment.

8. Quantity Limits

• Deviations from quantity limits are currently allowed through the prior authorization process.

No change to the state plan amendment will be made because of this comment.

9. Recommendations for Inclusion on the Preferred Drug List

• One commenter indicated that a list complied from input of neurologists statewide will be provided to the Pharmaceutical & Therapeutics Committee. This is the appropriate venue to present your recommendations. Establishing the Medicaid preferred drug list is a public process. Committee meetings are public and interested individuals may submit information for consideration.

• Please visit the following Pharmacy Corner website for further information, including meeting agendas, minutes and guidelines for providing public testimony:

http://www.dmap.state.de.us/information/pharmacy.html

No change to the state plan amendment will be made because of this comment.

Summary of Agency Initiated Change

Please note that DMMA has initiated one change to this regulation, under the section titled, “Preferred Drug Lists with Prior Authorization”. This change deletes the second sentence that reads, “Drugs included on the PDL are automatically prior authorized.” This sentence is unnecessary because preferred drugs do not require prior authorization (PA). Only non-preferred drugs require PA.

[Bracketed Bold Language] indicates text added at the time the final order is issued. [Bracketed stricken through] indicates text deleted at the time the final order is issued.

Findings of Fact

The Department finds that the proposed changes as set forth in the July 2005 Register of Regulations should be adopted.

THEREFORE, IT IS ORDERED, that the proposed regulation to establish the provisions related to prior authorization, preferred drug list and supplemental drug rebates is adopted and shall be final effective September 10, 2005.

Vincent P. Meconi, Secretary, DHSS, Aug. 16, 2005

DSS FINAL ORDER REGULATION #05-46

REVISIONS:

Attachment 3.1-A

Page 5 Addendum

LIMITATIONS

Prescribed Drugs:

The following drugs are not covered by Delaware Medicaid or are covered with limitations:

• DESI Drugs - products and known related drug products that lack substantial evidence of effectiveness. The State of Delaware does not cover DESI drugs for reimbursement purposes.

• Drugs Used for Cosmetic Purposes - products, such as Minoxidil Lotion and Retin A are not covered for adults, except for certain medical conditions.

• Fertility Drugs - are not covered when prescribed to stimulate fertility (example: Clomid).

• Anorectic Drugs - for the purpose of weight control are not covered. They may be reimbursed when prescribed to remedy hyperactivity in children and for certain sleep disorders.

Delaware Medicaid does not limit the quantity, days supply, or the number and/or frequency of refills for any prescription.

Participating manufacturers’ new drugs are covered (except excluded/restricted drugs specific in section 1927(d)(1)-(2) of the Social Security Act) for six months after FDA approval and upon notification by the manufacturer of a new drug.

Prosthetic Devices:

Prosthetic and orthotic devices, as well as other durable medical equipment and assistive technology services, are covered when documented as medically necessary.

Diagnostic Services:

Medicaid will pay for the rental of an apnea monitor to monitor the breathing of an infant for whom a diagnosis of apneic episodes (near-miss Sudden Infant Death Syndrome) has been made.

12.a. Prescribed Drugs:

Drug Coverage

1. Drug products are covered when prescribed or ordered by a physician, or other licensed practitioner within the scope of their practice and when obtained from a licensed pharmacy. Covered drugs, as defined in Section 1927(k)(2) of the Act, are those which are prescribed for a medically accepted indication, medically necessary, and produced by any pharmaceutical manufacturer, which has entered into and complies with a drug rebate agreement under Section 1927(a) of the Act.

2. Drugs excluded from coverage as provided by Section 1927(d)(2) of the Act, include:

a. Drugs designated less than effective by the FDA (DESI drugs) or which are identical, similar, or related to such drugs;

b. Drugs when used for cosmetic purposes or hair growth (products, such as Minoxidil Lotion and Retin A are not covered for adults, except for certain medical conditions);

c. Drugs when used to promote fertility;

d. Drugs that have an investigational or experimental or unproven efficacy or safety status;

e. Drugs when used for anorexia, weight loss, or weight gain. Drugs for the purpose of weight control may be reimbursed when prior authorized following established criteria as reviewed and approved by the DUR Board and deemed medically necessary.

3. Non-covered services also include: drugs used to correct sexual dysfunction and compound drugs (compound prescriptions must include at least one medication that on its own would be a covered entity).

4. Participating manufacturers' new drugs are covered (except excluded/restricted drugs specified in Section 1927[d][1]-[2] of the Social Security Act) for six months after FDA approval and upon notification by the manufacturer of a new drug.

Quantity and Duration

1. Dosage limits: Medications are limited to a maximum dose recommended by the FDA [and appropriate medical compendia described in section 1927(k) of the Social Security Act, peer review journals] that indicate that doses that exceed FDA guidelines are both safe and effective or doses that are specified in regional or national guidelines published by established expert groups such as the American Academy of Pediatrics, or guidelines recommended by the Delaware Medicaid Drug Utilization Review (DUR) Board and accepted by the DHSS Secretary.

2. Quantity limits are placed on therapeutic categories that will allow for coordinated care and improve outcomes. Limits exist for:

a. Sedative hypnotics-15 doses per 30 days

b. Triptans, acute treatment of migraines, 9 doses per 45 days

c. Opioid analgesics-200 doses per 30 days

d. Skeletal muscle relaxants-120 tablets/capsules per 30 days

e. Benzodiazepines-120 tablets per 30 days

f. Tramadol-240 tablets per 30 days

g. Narcotic cough medications-480ml per 30 days

h. Adjunctive anticonvulsants-240 tablets/capsules per 30 days

i. Nebulizer solutions-3 acute exacerbations per 30 days

j. Clients utilizing greater than 15 unique medications per 30 days

k. Medications that are dosed once a day are limited to one dose per day unless that total dosage required is within the limits stated above and require more than one tablet/capsule to obtain the required therapeutic amount.

3. Duration of therapy

a. Nicotine cessation products are limited to the duration that has been approved by the FDA.

b. Palivizumab-6 months during the high viral period of the year.

4. Prescriptions are limited to a quantity not to exceed the greater of 100 dosing units or a 34-day supply except for drugs selected and received through mail order.

Prior Authorization

1. Prior authorization requirements may be established for certain drug classes or particular drugs, or a medically accepted indication for uses and doses.

2. The DUR Board determines which prescription drugs may require prior authorization. The Board assesses data on drug use in accordance with predetermined standards. The standards shall be:

a. monitoring for therapeutic appropriateness

b .over-utilization and underutilization

c. appropriate use of generic products

d. therapeutic duplication

e. drug-disease contraindications

f. drug-drug interactions

g. incorrect drug dosage or duration of drug treatment

h. clinical efficacy

i. safety

j. medical necessity

k. potential for abuse, misuse and diversion

l. experimental use opportunity

m. cost effectiveness relative to similar therapies

The recommendations of the DUR Board constitute interpretive guidelines to be used in determining whether to grant or deny prior authorization of a prescription drug. The make up and membership authority for the DUR Board complies with 42U.S.C. S1396r-8.

3. A request for prior authorization for covered outpatient drugs is processed within 24 hours of receipt of a completed prior authorization request from a prescribing provider by telephone, mail or electronic communication. A 72-hour supply of medically necessary covered drugs is provided in an emergency situation as mandated and pursuant to 42 United States Code s1396r-8.

Preferred Drug Lists with Prior Authorization

A process is established which utilized a preferred drug list (PDL) for selected therapeutic classes. [Drugs included on the PDL are automatically prior authorized.] Drugs in those classes that are not included on the PDL shall require prior authorization. A Pharmaceutical & Therapeutic (P&T) Committee, comprised of pharmacists, physicians, and community members, appointed by the Secretary, Delaware Health & Social Services, selects drugs for the PDL.

Drug Rebate Agreements

CMS has authorized the state of Delaware to enter into The State of Delaware Department of Health and Social Services supplemental drug rebate agreement. This supplemental drug rebate agreement was submitted to CMS on April 7, 2005 and has been authorized by CMS.

• Pharmaceutical manufacturers are allowed to audit utilization rates;

• Compliance with the reporting requirements for state utilization information and restrictions to coverage;

• The unit rebate amount is confidential and cannot be disclosed for purposes other than rebate invoicing and verification; and,

• Rebate agreements between the state and a pharmaceutical manufacturer that are separate from the drug rebate agreements of Section 1927 are approved by the Centers for Medicare and Medicaid Services. The state reports rebates from separate agreements to the Secretary of Health and Human Services. The state will remit the federal portion of any cash state supplemental rebates collected.

Diagnostic Services:

Medicaid will pay for the rental of an apnea monitor to monitor the breathing of an infant for whom a diagnosis of apneic episodes (near-miss Sudden Infant Death Syndrome) has been made.

9 DE Reg. 420 (9/1/05)

department of health and social services

Division of Social Services

final

Title XIX Medicaid State Plan with respect to the Pharmaceutical Services Program

Government and Services