Tennessee Letter [RE: Comments on Proposed State Plan Amendment 17-0002]

April 28, 2017


Dr. Wendy Long,
Director, Bureau of TennCare,
310 Great Circle Road
Nashville, Tennessee 37243.

RE: Comments on Proposed State Plan Amendment 17-0002

Dear Dr. Long:
The State Patient Access Coalition (SPAC) would like to share with you our thoughts on the proposed change to Tennessee Medicaid’s reimbursement for blood clotting factors. We are worried that the changes effective April 1, could result in access issues for Tennessee Medicaid recipients.

SPAC represents the world’s leading manufacturers and the nation’s leading distributors of blood clotting factor. Blood clotting factors (BCF) are lifesaving therapies for individuals with bleeding disorders, such as hemophilia and von Willebrand Disease. SPAC was created to address issues of patient access to blood clotting factor and to engage with policymakers about the unique process to manufacture and dispense these vital therapies. SPAC works in collaboration with policymakers to ensure Medicaid recipients receive quality care that is evidence-based and cost-effective.

The notice of the proposed change states that change is being made to pharmacy reimbursement methodologies in order to comply with the Centers for Medicare & Medicaid Covered Outpatient Drugs Rule (CMS 2345 FC). As you may know, the rule only impacts drugs listed on the National Actual Drug Acquistion Cost (NADAC). Blood clotting factors are not listed on the NADAC. Therefore, we are surprised you decided to change reimbursement for clotting factor by more than twenty-percent when not required to do so by the federal government’s final rule. TennCare’s mission is to improve lives through high-
quality cost-effective care. SPAC agrees with this, and suggests that appropriate reimbursement results in quality specialty pharmacy services that improve care while reducing adverse events and cost.

We would like to draw your attention to the difference in the proposed dispensing fee and the cost it takes to dispense clotting factor properly. Dobson, DaVanzo & Associates1 (DDA) performed a cost survey with five specialty pharmacies to determine the cost of dispensing blood clotting factor2. The survey respondents were: Accredo, BioRX, CVS Health, National Cornerstone Healthcare Services, and Walgreens. This study was commissioned by the State Patient Access Coalition under the auspices of PPTA. It is estimated by DDA that these specialty pharmacies provide at least 85% of all clotting factor to Medicaid recipients. DDA used Medicare and Medicaid cost accounting principles in reviewing pharmacy costs that met the federal definition of a dispensing fee. SPAC provided Tennessee Medicaid with a copy of this in December of 2015.

Based on the federal definition of dispensing fee, DDA surveyed the participants’ direct and indirect costs associated with dispensing clotting factor. These costs reflect the complex and multi-faceted nature of providing clotting factor according to MASAC standards3. The chart below highlights the primary finding of DDA’s cost survey.

Dispenses to Medicaid Patients Weighted Average Median
Total Direct Costs per Dispense $385.82 $359.53
Total Indirect Costs per Dispense $612.37 $1,409.82
Total Costs per Dispense** $998.19 $1,723.34
When comparing the results of the DDA survey with the proposed Tennessee professional dispensing fee of $153.54, we are struck by stark discrepancy in the amounts. We believe the state should consider that the DDA survey showed the costs associated with just the delivery of clotting factor exceeded $200, and that dispensing clotting factor is extremely unique. Therefore, in the interest of patient access and public health, we recommend the state Medicaid program consider a dispensing fee for blood clotting factor that more accurately reflects the costs associated with providing clotting factor to Medicaid recipients.

We thank you for your consideration of our concerns. I am happy to answer any questions or comments you may have on the matter. I may be reached at 443-433-0900 or This email address is being protected from spambots. You need JavaScript enabled to view it..

1 Dobson DaVanzo & Associates is a well respected health economics and policy consulting firm based in Washington, DC, whose work has influenced the design of demonstrations and many public policy decisions, and appears in numerous instances in legislation and regulation.
2 Evaluating Blood Clotting Fact or Dispensing Costs for Medicaid Beneficiaries, Final Report 13-167, Dobson DaVanzo & Associates.
3 National Hemophilia Foundation. MASAC Recommendations Regarding Standards of Service for Pharmacy Providers of Clotting Factor Concentrates for Home Use to Patients with Bleeding Disorders. (MASAC Document #188).