The Covered Outpatient Drug Rule (CODR)…Two Years Later
By George Oestreich

Some of you will remember the many discussions that occurred after the promulgation of the Covered Outpatient Drug Rule (CODR). It was a by-product of the Accountable Care Act (ACA) which continues to be heavily discussed in the states. Most of the discussion are now around other aspects of the Act and involve private healthcare insurance coverage, Medicaid Expansion or Medicaid work requirements. However, those of us that are in states where clotting factor is primary covered by fee-for-service (FFS) Medicaid either through the state providing all pharmacy benefits or clotting factor covered separately (there are currently five of these states with two more on the way). They are referred to as pharmacy “carve outs” (not to be confused with 340B Medicaid carve out issues). If the clotting factor benefit is administered through a Medicaid managed care or as a medical benefit, you are less likely to hear much about this issue and will need to monitor more closely for changes.

While clotting factor agents are technically exempt from the CODR, the Centers for Medicare and Medicaid Services (CMS) has told the states they want to know how the states are dealing with the issue. Thus, the clotting factor reimbursement policy should be included in the state plan amendment (SPA) that all states are required to file regarding their conformance to the CODR. Therein lies the problem for some of us: many states are not familiar with issues surrounding clotting factor (and/or the treatment of hemophilia), and if 340B policy issues get introduced into the discussion, things get even more confused. This is especially true of Hemlibra. Many of you have seen this happening and have rescued the issue from being lumped into the quagmire of the overall pharmacy policy.

Also embedded in the discussion is the Professional Dispensing Fee (PDF), which mandates that dispensing fees must be cost-based and must not include any cost that is not part of the actual handling and delivery of the medication to the consumer. This PDF is usually insufficient to support your cost of providing services. This is the area that the Alliance policy and payer teams talked with CMS about early in 2016. CMS ultimately provided guidance that allows for the other services provided by HTCs to be grouped as disease management (DM) services, which are separately reimbursed. You have and will hear more about this issue soon as we work to secure a DM services study that can be presented to the states as separate deliverable and payable services supporting your Center of Excellence.

We have recently been reviewing all of the state SPAs to see how they decided to cover clotting factor reimbursement. Those policies are all over the map. We will provide our members a list of clotting factor Medicaid fee-for-service reimbursement amounts by state so you can quickly see where your state is. More importantly, as you develop your relationship with your state Medicaid agency, you can discuss these rates and either ask they be supported or ask they be changed to meet the needs of your HTC.

If you are located in one of the over forty states that are predominantly Medicaid managed care (MCO), you are seeing the issues from a different perspective. You may not always know if the managed care company is providing service to Medicaid recipients or only to private sector patients. The Medicaid managed care companies are often listed on the state’s website as are the benefits which they cover (hemophilia as a disease may be carved out). You should ensure you know how clotting factor is covered in your state from a payer perspective (state FFS or MCO) as well as how it is billed (pharmacy or medical).

If clotting factor is being covered by the MCO, you can still impact your reimbursement, access to patients and services you may provide by directly working with MCOs or working with the state to influence their contracts. Your Hemophilia Alliance team can help you access the MCO plans in your state. If you know your state is actively bidding or preparing to bid a MCO contracts, you should use the relationship you have formed. Volunteer or work with them to help set the reimbursement parameters or participate in mandated public hearings. Encourage the MCO to either set the rate at the FFS level (if it acceptable) or at a specific acceptable MCO level. Also encourage the state and MCO to include required disease management services and billable codes for the psychosocial and clinical support services you provide.

As the saying goes, “it’s a marathon, not a sprint.” Maintain and enhance your relationship with your state Medicaid agency and the MCOs. Stay informed about changes in funding, services, access and coverage. Let the Hemophilia Alliance team know of issues you learn about, even if they are only rumors. The team can ferret these out. We are here to serve you and to help you be successful and well-funded. Working together makes each of us stronger.

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