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The Medicaid Pharmacy Benefit

Medicaid’s pharmacy benefit was moved into the Medicaid managed care benefit package in October of 2011.  Before that date, people enrolled in a Medicaid managed care plan obtained all of their health care through the plan, but used their regular Medicaid card to access any drug available on the state formulary on a "fee for service" basis without needing to utilize a restricted pharmacy network or comply with managed care plan rules. 

DUAL ELIGIBLES -- Note that Medicaid generally does NOT cover prescription drugs for dual eligibles - that is, individuals who have both Medicaid AND Medicare.  These individuals are expected to get their prescription drugs covered through Medicare Part D. 

HOW WILL MANAGED CARE CHANGE THE PHARMACY BENEFIT FOR CONSUMERS?  The Medicaid pharmacy benefit includes all FDA approved prescription drugs, as well as some over-the-counter drugs and medical supplies.   Under Medicaid managed care:

  • Plan formularies will be comparable to but not the same as the Medicaid formulary.  Managed care plans are required to have drug formularies that are “comparable” to the Medicaid fee for service formulary.  Plan formularies do not have to include all drugs covered listed on the fee for service formulary, but they must include generic or therapeutic equivalents of all Medicaid covered drugs.
  • The Pharmacy Benefit will vary by plan. Each plan will have its own formulary and drug coverage policies like prior authorization and step therapy.  Pharmacy networks can also differ from plan to plan.
  • Prescriber Prevails applies in certain drug classes.   Prescriber prevails applys to medically necessary precription drugs in the following classes:  atypical antipsychotics, anti-depressants, anti-retrovirals, anti-rejection, seizure, epilepsy, endocrine, hemotologic and immunologic therapeutics.  Prescribers will need to demonstrate reasonable profession judgment and supply plans witht requested information and/or clinical documentation.  
  • Pharmacy Benefit Information Website -- http://pbic.nysdoh.suny.edu --  This website provides very helpful information on a plan by plan basis regarding pharmacy networks and drug formularies.  The Department of Health plans to build capacity for interactive searches allowing for comparison of coverage across plans in the near future. 
  • Standardized Prior Autorization (PA) Form -- The Department of Health worked with managed care plans, provider organizations and other state agencies to develop a standard prior authorization form for the pharmacy benefit in Medicaid managed care.  The form will be posted on the Pharmacy Information Website in July of 2013. 
  • Mail Order Drugs -- Medicaid managed care members can obtain mail order/specialty drugs at any retail network pharmacy, as long as that retail network pharmacy agrees to a price that is comparable to the mail order/specialty pharmacy price.

CAN CONSUMERS SWITCH PLANS IN ORDER TO GAIN ACCESS TO DRUGS?

Changing plans is often an effective strategy for consumers eligible for both Medicaid and Medicare (dual eligibles) who receive their pharmacy service through Medicare Part D, because dual eligibles are allowed to switch plans at any time. Medicaid consumers will have this option only in the limited circumstances during the first year of enrollment in managed care. 

  • Medicaid managed care enrollees can only leave and join another plan within the first 90 days of joining a health plan.  After the 90 days has expired, enrollees are “locked in” to the plan for the rest of the year.
  • Consumers can switch plans during the “lock in” period only for good cause.  The pharmacy benefit changes are not considered good cause.
  • After the first 12 months of enrollment, Medicaid managed care enrollees can switch plans at any time. 

STEPS CONSUMERS CAN TAKE WHEN A MANAGED CARE PLAM DENIES ACCESS TO A NECESSARY DRUG

As a first step, consumers should try to work with their providers to satisfy plan requirements for prior authorization or step therapy or any other utilization control requirements.  If the plan still denies access, consumers can pursue review processes specific to managed care while at the same time pursuing a fair hearing.

  • All plans are required to maintain an internal and external review process for complaints and appeals of service denials.  Some plans may develop special procedures for drug denials.  Information on these procedures should be provided in member handbooks.
  • Beginning April 1, 2018, Medicaid managed care enrollees whose plan denies prior approval of a prescription drug, or discontinues a drug that had been approved,  will receive an Initial Adverse Determination notice from the plan -  See Model Denial IAD Notice  and  IAD Notice to Reduce, Suspend or Stop Services

The enrollee must first request an internal Plan Appeal and wait for the Plan's decision.  An adverse decision is called  a 'FInal Adverse Determination"  or FAD.  See model Denial FAD Notice and FAD Notice to Reduce, Suspend or Stop Services.  The enroll has the right to request a fair hearing to appeal an FAD.   The enrollee may only request a fair hearing BEFORE receiving the FAD if the plan fails to send the FAD in the required time limit, which is 30 calendar days in standard appeals, and 72 hours in expedited appeals.  The plan may extend the time to decide both standard and expedited appeals by up to 14 days if more information is needed and it is in the enrollee's interest.

AID CONTINUING -- If an enrollee requests a Plan Appeal and then a fair hearing because access to a drug has been reduced or terminated, the enrollee has the right to aid continuing (continued access to the drug in question) while waiting for the Plan Appeal and then the  fair hearing. The enrollee must request the Plan Appeal and then the Fair Hearing before the effective date of the IAD and FAD notices, which is a very short time - only 10 days including mailing time.  See more about the changes in Managed Care appeals here.   Even though that article is focused on Managed Long Term Care, the new appeals requirements also apply to Mainstream Medicaid managed care. 

  • Enrollees who are in the first 90 days of enrollment, or past the first 12 months of enrollment also have the option of switching plans to improve access to their medications.

Consumers who experience problems with access to prescription drugs should always file a complaint with the State Department of Health’s Managed Care Hotline, number listed below. 

ACCESSING MEDICAID'S PHARMACY BENEFIT IN FEE FOR SERVICE MEDICAID

For those Medicaid recipients who are not yet in a Medicaid Managed Care program, and who do not have Medicare Part D, the Medicaid Pharmacy program  covers most of their prescription drugs and select non-prescription drugs and medical supplies for Family Health Plus enrollees.  Certain drugs/drug categories require the prescribers to obtain prior authorization.  These include brand name drugs that have a generic alternative under New York's mandatory generic drug program or prescribed drugs that are not on New York's preferred drug list.  The full Medicaid formulary can be searched on the eMedNY website.

Even in fee for service Medicaid, prescribers must obtain prior authorization before prescribing non-preferred drugs unless otherwise indicated. Prior authorization is required for original prescriptions, not refills. A prior authorization is effective for the original dispensing and up to five refills of that prescription within the next six months. Click here for more information on NY's prior authorization process.

The New York State Board of Pharmacy publishes an annual list of the 150 most frequently prescribed drugs, in the most common quantities. The State Department of Health collects retail price information on these drugs from pharmacies that participate in the Medicaid program. Click here to search for a specific drug from the most frequently prescribed drug list and this site can also provide you with the locations of pharmacies that provide this drug as well as their costs. 
Click here to view New York State Medicaid’s Pharmacy Provider Manual. 

WHO YOU CAN CALL FOR HELP

Community Health Advocates Hotline:   1-888-614-5400

NY State Department of Health's Managed Care Hotline:  1-800-206-8125  (Mon. - Fri. 8:30 am - 4:30 pm)

NY State Department of Insurance: 1-800-400-8882

NY State Attorney General's Health Care Bureau: 1-800-771-7755


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