California Letter [RE: Exemption for Clotting Factor from Medicaid Pharmacy Rate Reduction]

November 22, 2011

Mr. Toby Douglas, Director
California Department of Health Care Services
1501 Capitol Avenue
PO Box 997413, MS 0000
Sacramento, CA 95899-7413

RE: Exemption for Clotting Factor from Medicaid Pharmacy Rate Reduction

Dear Mr. Douglas:

On behalf of the State Patient Access Coalition (SPAC), I write to express our patient access concerns with the potential 10 percent cut to blood clotting factor reimbursement in the Medi-Cal program, and to request that you exempt blood clotting factor from the 10 percent pharmacy services rate reduction. The SPAC represents the world’s leading manufacturers and the nation’s leading distributors of blood clotting factor. Blood clotting factor therapies are vital for individuals with bleeding disorders, including hemophilia and von Willebrand Disease.

California recently had a Medicaid State Plan Amendment approved by the Centers for Medicare and Medicaid Services (CMS) that allows the state to reduce payments to Medi-Cal providers by 10 percent across the board. We are very concerned about patient access to blood clotting factor specifically if the state implements a 10 percent reduction to blood clotting factor reimbursement. It is a basic principle of health economics that the actual reimbursement amount for a service directly impacts the number of providers willing to provide that service. Thus, our primary concern is that the reduction being proposed would result in individuals with bleeding disorders losing their specialty pharmacy provider in many cases, and limiting those individuals’ ability to access necessary treatment.

SPAC believes reimbursement should adequately reflect the positive impact that treatment with clotting factors provides to patients. SPAC supports Medicaid provider reimbursement that recognizes the acquisition, delivery and administration of unique and highly effective drugs and biologics such as clotting factors. These costs include, but are not limited to:

  • Specialty pharmacy distribution channels and special delivery requirements including temperature controlled shipments of blood factor product with proof of delivery.
  • Medically necessary nursing services. Many patients require nursing assistance to administer clotting factor therapies.
  • Medically necessary ancillary supplies such as tubing, IV start kits, dressings, needles, pumps and waste disposal services.
  • Emergency delivery and 24 hour support by nurses and pharmacists trained in bleeding disorders.
  • Case management services.
  • Inventory Management of products with variable assays to minimize waste.
  • Adverse drug reaction monitoring and reporting and notification of product recalls and withdrawals.
  • Pharmacist and nurse counseling and monitoring.
  • Warehouse storage and facilities costs for stocking product.

Under the 10 percent rate reduction, Medi-Cal reimbursement may not sufficiently cover these necessary clinical costs to treat blood factor recipients, thereby creating significant concerns regarding patient access to care.

As part of the State Plan Amendment approval process, we note that the state provided CMS with a paper entitled, “Analysis and Monitoring of Medi-Cal Pharmacy Access: Provider Availability & Service Utilization.” This paper was used to provide CMS with a baseline assessment of Medi-Cal pharmacy access in the fee-for-service (FFS) program and defines the approach for measuring and monitoring access to pharmacy services for the Medi-Cal FFS population. While we commend your department on the significant effort that went into developing this analysis we are concerned that the analysis and proposed monitoring process do not address Medi-Cal recipient access to blood clotting factor, nor the costs of providing the product and services as defined by the Medi-Cal Hemophilia Provider requirements.

The measurements addressed in the paper analyze pharmacy provider rates and utilization rates for what appears to be retail pharmacy. However, as you know, specialty pharmacies provide blood clotting factor to Medi-Cal recipients. Accordingly the access measurements for retail pharmacy services do not address the needs of Medi-Cal recipients that require access to blood clotting factor provided by specialty pharmacies that meet the standards of service recommendations contained in the National Hemophilia Foundation’s Medicaid and Scientific Advisory Council’s Recommendation 188. Given the small, yet geographically wide-spread, population of patients requiring blood factor, even if just a few clotting factor suppliers leave the market due to the rate reduction, there will be patients whose access to care is negatively impacted.

It is well documented that clotting factor therapies provide an increased quality of life for patients with bleeding disorders. Reimbursement proposals that hinder patient access can lead to delays in obtaining the proper medical care, ultimately resulting in higher healthcare costs from hospitalizations, joint damage necessitating surgical intervention, and long term debilitation virtually ensuring long term dependence on government programs. Thus, we respectfully ask that you consider exempting blood clotting factor from the 10 percent pharmacy services rate reduction in order to protect this small, yet high-risk population of patients. This will ensure Medi-Cal recipients continue to receive the best care possible in your program.

We appreciate your consideration of our concerns and would welcome the opportunity to discuss them with you further. Should you have any questions or require additional information please do not hesitate to contact me at: This email address is being protected from spambots. You need JavaScript enabled to view it. or (443)433-1110.