Welcome to the Community Pharmacy Advocacy Coalition (CPAG) weekly communication.
The CPAG is a coalition of community pharmacists who are concerned about the impact of Pharmacy Benefit Manager (PBM) continued erosion of pharmacy practices, as well as recent devastating cuts to pharmacy reimbursement form the state Medi-Cal program.
As a member of the coalition, you will receive two email updates per week. On Mondays an update will be sent to all coalition members with information on what is happening related to PBM activities. On Thursday, you will receive an update on all the efforts to eliminate the Medi-Cal clawback and NADAC formula. We separated the communications in this way because we know that some coalition members care more about one issue or the other, and therefore you will not have to search for the relevant updates within one email.
PBM Regulatory Oversight
CPhA achieved success with AB 315 (Wood) last year, which places PBMs operating in California under the regulation of the Department Managed Health Care (DMHC). Upon enactment of the bill on January 1
st, the Department was charged with developing the necessary regulation to implement the law. The DMHC began to move forward with that process with a stated timeline beginning July 1
st. Last Wednesday was the deadline for external organizations to submit applications to the Department for convening stakeholders to weigh in on the regulatory process. CPhA submitted its application with PBM expert and Board member, Doug Hillblom, PharmD, as well as CPhA staff.
The legislation contains several important dates that the DMHC must adhere to, including:
- Determining the reporting criteria for transparency that PBMs must provide by February 2020.
- Beginning January 1, 2020, PBMs must register with DMHC and begin adhering to the contracting requirements (excluding Knox-Keene plans) as set forth in the bill.
- Beginning January 1, 2020, an anti-mail order provision in Sonoma and Riverside counties will begin that prevents PBMs from restricting quantities dispensed at community pharmacies. This pilot will conclude December 2022, at which time a change to make this provision statewide will be sought.
As soon as the DMHC taskforce begins their work in July, additional updates and requests for information from pharmacies will be provided in the newsletter. If you would like to follow the progress from DMHC, please visit this
link.
Provider PBM Complaint Hotline
Pursuant to AB 315 as well as another legislative bill last year (AB 2674), the Department of Managed Health Care (DMHC) is now required to review “patterns of provider complaints for unfair billing patterns”. You may have recently received a message from one of your health plans regarding this matter. If you have complaints about billing patterns from your PBM or a health plan, pharmacies need to submit a complaint through this process. The DMHC will
only act on “patterns” of complaints, so multiple providers need to submit complaints to establish a record of problems in order for DMHC to act. This is standard procedure for claims filed by providers and consumers alike and not specific to pharmacists and PBMs.
The link to submit a provider complaint to the Department is
here. Towards the bottom of the page you will see “Submit a Provider Complaint”. If you click on that link it will take you to an online portal where providers can register and submit complaints to DMHC online. If you need assistance, you can contact the DMHC Provider Complaint phone line at 1-877-525-1295. DMHC encourages you to read the information on this page about eligible and ineligible claims and the requirement to first go through the Provider Dispute Resolution (PDR) process.
PBM Research Activities
This past week, CPhA staff spent significant time discussing successful restrictions on PBM DIR-type fees with other states as well as NCPA. The discussions were fruitful in learning about the various legislative measures that have occurred within states with regards to eliminating non-Medicare DIR fees as well as many other retroactive claims adjustment measures that have passed in those states. NCPA staff generously sent specific legislative language to CPhA and we will be reviewing the various examples to determine the ideal model that could be attempted in California. Further, staff are meeting with key legislators to brief them on these findings and solicit their support to introduce legislation in the upcoming legislative cycle to tackle PBM retroactive fees.
Senate Bill 642 (Stone) – Statewide PBM
Approximately one month ago, CPhA CEO Jon Roth was invited to testify in front of the Senate Budget Committee on Health to discuss Governor Newsom’s executive order regarding Medi-Cal pharmacy. Governor Newsom is proposing eliminating all Managed Care pharmacy programs and reverting pharmacy back to Fee-for-Service by 2020. Additionally, the Governor has proposed consolidating all State pharmacy purchasing into a centralized purchasing pool. To view the executive order, click
here. In that hearing, Senator Jeff Stone, PharmD (R-Riverside) proposed the idea of California developing its own PBM, which he has now introduced legislation to do.
In the bill,
SB 642, Senator Stone outlines the consolidated purchasing and adjudication functions of this state-run PBM. This bill would only apply to Medi-Cal and other state entities such as CalPERS, the University of California, and others. It would not apply to any commercial health plan contract. CPhA supports the concept of a California state-run PBM as long as the State remains in 100% ownership and management over the PBM. CPhA would oppose the State simply contracting with an existing PBM (Caremark, ExpressScripts, Optum) to carry out these activities. Pharmacy’s experience with current State agencies that contract with third-party commercial PBMs is unfavorable, and CPhA would oppose an expansion of that model to all State contracting entities.
Senator Stone has informed CPhA that SB 642 will be a two-year bill, meaning that it has been introduced, but will not be forwarded out of Committee until such time as the Governor’s Administration can align this bill with its overall pharmacy executive orders. That is expected to occur early next year. CPhA will keep the coalition members updated should these plans change.
