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Michigan Letter [RE: Comments on Project Number 1647 Pharmacy – Pharmacy Claim Reimbursement Changes and Coverage of Medication Therapy Management Services]

March 31, 2017

RE: Comments on Project Number 1647 Pharmacy – Pharmacy Claim Reimbursement Changes and Coverage of Medication Therapy Management Services

Dear Ms. Subhedar:

The State Patient Access Coalition (SPAC) appreciates the opportunity to provide comments on the proposed policy changes involving pharmacy claim reimbursement and coverage of medication therapy management services (MTM). Given the unique requirements of dispensing blood clotting factor, SPAC would respectfully request that Michigan consider using this rulemaking process to promulgate a unique Medicaid reimbursement for blood clotting factor that takes into account the extensive efforts required to provide blood clotting factor to 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.

We believe the MTM service definition in Project Number 1647 is too limiting. The definition states that “MTM services are face-to-face consultations provided by pharmacists to optimize drug therapy and improve therapeutic outcomes for beneficiaries.” Specialty pharmacies use a number of strategies to optimize drug therapy and improve therapeutic outcomes for individuals treated with blood clotting factor.   These strategies include telephonic consultations between the individual and a pharmacist to ensure optimum treatment outcomes are achieved. For this reason we would recommend changing the proposal to include telephonic consultations. North Carolina, among other states, allows for this.

Another change we would ask you to consider involves the proposed professional dispensing fee. Michigan has proposed a professional dispensing fee of $20.02 for drugs dispensed by specialty pharmacies. We are concerned that this amount does not meet the federal requirements for a professional dispensing fee when applied to the dispensing of clotting factor.

The federal rule requires the fee to cover a pharmacies costs associated with ensuring possession of the covered outpatient drug is transferred to the beneficiary. These costs include reasonable costs associated with a pharmacist's time in checking the computer for information about an individual's coverage, performing drug utilization review and preferred drug list review activities, measurement or mixing of the covered outpatient drug, filling the container, beneficiary counseling, physically providing the completed prescription to the Medicaid beneficiary, delivery, and special packaging1.

Dobson, DaVanzo & Associates2 (DDA) performed a cost survey with five specialty pharmacies to determine the cost of dispensing blood clotting factor3. The survey respondents were: Accredo/Express Scripts, 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 Michigan Medicaid with a copy of this survey during an in-person meeting with the Michigan Medicaid in November of 2015.

Based on the federal rule, 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 standards4. 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 Michigan professional dispensing fee of $20.02, we are struck by stark discrepancy in the amounts. We presume the Michigan proposal includes a blended rate based on dispensing all specialty pharmacy products, but we believe the state should consider that not all pharmacies provide the therapies that account for the presumed blended rate, 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. The federal government recognizes this fact by providing a unique furnishing fee for blood clotting factor provided to Medicare recipients. Therefore, in the interest of patient access and public health, we recommend the state Medicaid program follow the lead of the Medicare program and establish a unique dispensing fee for blood clotting factor.

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 42 CFR 447.502
2 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.
3 Evaluating Blood Clotting Fact or Dispensing Costs for Medicaid Beneficiaries, Final Report 13-167, Dobson DaVanzo & Associates.
4 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).