Louisiana’s Medicaid Pharmacy Benefits Management (PBM) System

1. Department of Health and Hospitals Louisiana’s Medicaid Pharmacy Benefits Management (PBM) System

2. Louisiana’s Medicaid PBM • Rx benefits for Medicaid Recipients (Began 1966 with implementation of Medicaid Program) • State owned and operated PBM • Not for Profit • All savings derived from PBM Accrue to Benefit of State

3. Louisiana’s PBM Components • Manufacturer Rebate Maximization – Federal & State • Provider Audits • Patient Profiling • On-Line Prescription Reporting • Provider & Patient Reporting • Lock-In for Misutilizers • Coordination of Benefits (Third Party Liability) • Program Oversight – CMS, AG, OIG & DHH • Provider Network Development • State Maximum Allowable Costs (MACS) • Provider Fees • Co-payments • Preferred Drug List • Prior Authorization • Monthly Prescription Limits • Provider Help Desk • Claims Management

4. Additionally, Louisiana’s PBM Offers: • Cognitive Services – Pharmaceutical Care Intervention/POS System Captured • Electronic Clinical Data Inquiry Application (e-CDI) • Outcomes Management • E-Prescribing Program • Clinical/Intervention Desk • Physician /Pharmacy Education Programs • Disease Management – Patient and Provider Educational Programs • DUR – Prospective, Education & Retrospective

5. Louisiana’s Medicaid PBM Controls 1990’s 1960’s PBM Cost Containment • Omnibus Budget Reconciliation Act OBRA 90 (1990) • Required Sate Level DUR • Required Patient Profiles • Required Patient Counseling • Implemented Manufacturers Drug Rebates and DUR (1991) • $0.10 Provider Fees (1992) • Office of Mental Health Discontinues Drugs for Patients; Drug Cost • Assumed by Pharmacy Program • Expanded Lock-In Program • Implemented Co-pay Controls • Pharmacy Benefits Management System • Medicaid Pharmacy Benefits Management Advisory Work Group Created to Maximize Program Efficiency and Effectiveness • Interdisciplinary Counsel Comprised of Health Care Executives Formed (1995) • Billings System Implemented Requiring Provider to Bill Medicare first • for Dual Eligibles (1996) • Rx benefits for Medicaid • Recipients (1966) • Comprehensive Audit Program • (1966) • Prior Authorization Cost Containment • Program (1966-1974) 1970’s • Peer and Utilization Review Committee (1976) • First MMIS (1977) 1980’s • Recipient Lock-In (1980) • State Maximum Allowable Cost (MAC) (1984) • Restricted Formulary Instituted (1988) • Restricted Formulary Repealed by Act 403 (1989) 2000’s • Provider Peer Based Profiling (2002) Preferred Drug List & Prior Authorization (2002) • Supplemental Rebates (2002) Prescription Limit (8/month) (2003) • Clinical Drug Inquiry Applications (2003) HIPAA Compliant (2003) • Coordination of Benefits 2003 Provider Audits (2004) • Disease Focus DUR-2004 Antipsychotic DUR Initiative -2005 • Part D Implementation (2006) Asthma HELP (2006) • E-Prescribing (2008) Medicaid Rx Cost

6. Pharmaceutical and Therapeutics Committee Overview • ACT 395 of the 2001 Regular Legislative Session– • Authorizes the Department of Health and Hospitals (DHH) to establish a drug list utilizing a prior approval process or any other process or combination of processes that prove to be cost effective in the Medical Assistance Program • Allows DHH to enter into contractual arrangements to perform the prior approval (PA) function

7. Pharmaceutical and Therapeutics Committee Overview • The Louisiana Medicaid Pharmaceutical and Therapeutics Committee (P & T): • Established in August 2001; • Consists of twenty-one (21) members, appointed by the Governor; • Reviews clinical and cost data on various Therapeutic Classes of drugs; and • meets Bi-Annually.

8. Pharmaceutical and Therapeutics Committee Overview • On June 10, 2002, the Department implemented a Preferred Drug List (PDL) with a Prior Authorization (PA) process and a Supplemental Drug Rebate Program through a phased-in approach • The University of Louisiana at Monroe (ULM) School of Pharmacy administers the PA function; • DHH contracts with Provider Synergies to negotiate State Supplemental Rebates; • Beginning Calendar Year 2011, the committee will meet in May and November • The Preferred Drug List is updated bi-annually (July & January) based on committee’s recommendations

9. Pharmaceutical and Therapeutics Committee Overview • Provider Synergies, LLC • Negotiate State Supplemental Rebates with Drug Manufacturers • Prepare therapeutic class reviews • Provide cost analysis information for the therapeutic classes • Develop clinically sound and cost-effective recommendations to develop and manage the PDL

10. Therapeutic Classes Reviewed 75 68 57

11. Preferred Drug List and Supplemental Rebates • Seventy – five (75) therapeutic classes are included in the PDL review process • Provider Synergies has projected $38,625,704 in program savings for SFY 2010 resulting from market shift and supplemental rebates. • The PDL compliance rate for SFY 2010 was approximately 91%. • The Pharmacy program contracts with Provider Synergies to negotiate state supplemental rebates with drug manufacturers and assist with maintenance of the PDL. 

12. Pharmacy Program ExpendituresSFY 2008 - 2010 Source: Medical Vendor Report, Data Warehouse, LAPRIMS & MW-M-01 Rebate Total computations do not include interest and all figures were derived from State Fiscal Year parameters

13. Louisiana Medicaid Pharmacy BenefitsManagement Program SavingsState Fiscal Year 2010 Program M $283,640,228 Program J $ 6,422,925 Federal Rebates $290,063,153 Supplemental Rebates 42,740,235 Refund checks (37,154) Prospective DUR 50,197,386 Dispensing Fee ($5.77 (MAX) $4.39 (AVG) (10,879,384) 15,013,550 Co-payments 7,816,502 Pharmacy Provider Fees 8,042,084 Medicare Crossovers 11,979,819 Recoupment Audit 327,721 Rebate 1,218,451 TPL Savings 25,872,125 TOTAL $453,233,873

14. Medical Assistance Program & Pharmacy Statistics • Total Medical Assistance Program expenditures for FY 2009: $6,741,437,953 expenditures for FY 2010: $6,638,648,061 • Total Medical Assistance Program drug expenditures for FY 2009: $828,021,081 expenditures for FY 2010: $854,671,680 • Total number of prescription claims reimbursed through Medicaid in FY 2009: 10,180,045 Medicaid in FY 2010: 10,879,384 • Total dollars spent on prescription drugs Prescription Drugs in FY 2009 (net of rebate): $526,575,313 Prescription Drugs in FY 2010 (net of rebate): $521,905,446 Average prescription payment for FY 2009: $81.34 Average prescription payment for FY 2010: $78.56

15. Historical View SFY (2000 – Present) State Fiscal Year Unduplicated Unduplicated Rx (SFY) EligibleRecipientsRecipients 2000/01 825,678 781,073 646,694 2001/02 909,912 853,672 693,743 2002/03 952,453 894,129 729,057 2003/04 1,061,487 1,048,021 770,350 2004/05 964,106 914,587 790,168 2005/06 980,697 870,640 791,967 2006/07 1,153,903 1,121,205 737,380 2007/08 1,131,357 1,119,484 772,696 2008/09 1,075,596 889,549 800,831 2009/10 1,293,458 1,231,803 861,179 Source: Medicaid Annual Reports, Data Warehouse & MW-M-01, SFY 1995/96 through 2009/10

16. Average Cost Per Claim SFY 2008 - 2010

17. Generic Utilization Percentage SFY 2008 - 2010

18. Average Rx/Recipient SFY 2008 - 2010

19. Average Rx Paid/Recipient SFY 2008 - 2010

20. Select Chain Provider Claim Counts Paid Amount < $12 SFY 2008 - 2010

21. Total Prescription Costs: Pre- and Post-Lock-in

22. Retrospective DUR (LADUR) HYPERTENSION (HTN) MANAGEMENT • RECOMMENDED JNC 7 GUIDELINES • RECOMMENDED INITIATION OF HTN TREATMENT FOR STAGE 1 AND STAGE 2 HTN WHEN NO TRTMT NOTED • FOLLOWED UP WITH PHONE CALLS TO NON-RESPONDERS 34% STARTED AN ANTI-HYPERTENSIVE AGENT

23. Retrospective DUR (LADUR) DIABETES MANAGEMENT • RECOMMENDED A1C TESTING BE PERFORMED • 41% HAD LAB TEST PERFORMED • RECOMMENDED ACE INHIBITOR OR ARB TO DIABETICS WITH HYPERTENSION • FOLLOWED UP WITH PHONE CALLS TO NON-RESPONDERS (ULM) • 26% ADDED ACE INHIBITOR OR ARB • RECOMMENDED DISCONTINUING THIAZOLIDINEDIONE or METFORMIN to diabetics with HEART FAILURE • 31% DISCONTINUED DRUG

24. Retrospective DUR (LADUR) HEART FAILURE • RECOMMENDED ADDING BETA BLOCKER • 21% ADDED BETA BLOCKER • RECOMMENDED ADDING ACE INHIBITOR • 29% ADDED ACE INHIBITOR • RECOMMENDED DISCONTINUING NSAID in heart failure patients • 63% DISCONTINUED NSAID

25. LA Medicaid PBM Electronic Clinical Data Inquiry Application (e-CDI)

26. Electronic Clinical Data Inquiry Application (e-CDI) • Internet Web-Based • Available 24 hours/day • Updated on a daily basis • Print friendly version

27. Electronic Clinical Data Inquiry Application (e-CDI) • Each Medicaid recipient • All drugs dispensed • This month • Last month • Last four months • By all prescribers

28. Electronic Clinical Data Inquiry Application (e-CDI) • Availability of data • Any practice location • Office or Pharmacy • Emergency Room • Hospital or Clinic

29. Electronic Clinical Data Inquiry Application (e-CDI) • Benefits: • Evaluate drug usage • Similarly clinically effective drugs • MD/Recipient • Unsure of drugs

30. Electronic Clinical Data Inquiry Application (e-CDI) • Benefits: • Assist with: • Monthly prescription limit • D/C drugs • Less costly drugs • More clinically

31. Electronic Clinical Data Inquiry Application (e-CDI) • Benefits: • Better drug outcomes due to: • Drug mishaps • Duplication • Side effects • Overmedication

32. Electronic Clinical Data Inquiry Application (e-CDI) INFORMATION COMPONENTS: • SERVICES (Paid Claims) • CLINICAL DRUG INQUIRY • MD/EPSDT • PROCEDURES (OP) • SPECIALISTS • LAB & X-RAY • EMERG. RM. • INPATIENT • ANCILLARY

33. CLINICAL DATA INQUIRY APPLICATION

34. LA MEDICAID PBM CDI • How to Access CDI: • www.lamedicaid.com • Provider log-in • 7-digit Medicaid Number • Your online account • Activation of account • CDI link to view recipient information

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