HFS B45475 emergency-purchase-extension-approval-v.25.2 Pharmacy Benefits.pdf

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Attached to
Emergency Extension: Pharmacy Benefit Management System (PBMS)
Solicitation number
25-478HFS-MEDPR-B-45475
Issued by
Illinois

About this file

This is an Emergency Purchase Extension Approval form from the State of Illinois Chief Procurement Office for General Services, submitted by the Department of Healthcare and Family Services (HFS) for the extension of a Pharmacy Benefit Management System (PBMS) contract with Change Healthcare Pharmacy Solutions, Inc. The original emergency contract term runs from March 17, 2024, through December 14, 2024, with the requested extension period from December 13, 2024, through December 14, 2025. The scope of work includes processing and adjudicating pharmacy claims, maintaining compliance with federal and state regulations, facilitating prior authorizations, and managing a Preferred Drug List for approximately 3.9 million Illinois Medicaid customers.

The original emergency contract amount is $4,290,240.32, with the extension amount estimated at $5,886,113. The contract does not include Business Enterprise Program (BEP) participation as the vendor provides proprietary applications customized for Illinois as a software-as-a-service solution. The extension is necessitated by a significant cybersecurity breach in February 2024 that delayed contract negotiations and the competitive procurement process. The PBMS is crucial for managing approximately $2.4 billion in annual drug rebate revenues and ensuring continuous pharmacy services for Medicaid beneficiaries. HFS plans to issue a new Request for Proposal in FY25, Quarter 2, with estimated contract execution in FY25, Quarter 4.

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EMERGENCY PURCHASE EXTENSION APPROVAL

State of Illinois Chief Procurement Office for General Services Emergency Purchase Extension Approval v.25.2 Page 1 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service

Extension Justification BidBuy Reference #: 25-478HFS-MEDPR-B-45475

Amount of original contract: $ 4,290,240.32

Actual or Estimated: Estimated

Original BidBuy Reference #: 24-478HFS-MEDPR-B-42259

Original Emergency Term Start Date:Mar 17, 2024 Original Emergency Term End Date: Dec 14, 2024

Expected Extension Start Date: Dec 13, 2024 Expected Extension End Date: Dec 14, 2025

Amount of extension contract: $ 5,886,113 Actual or Estimated: Estimated

Is there BEP participation on this contract? If no, explain why

This vendor was emailed about a potential BEP goal. Vendor declined to participate in the BEP program as they are unable to provide a BEP for the proprietary applications that are utilized by the State of Illinois in a software-as-a-service application.

The applications were customized for the State of Illinois as part of the design/development process.

Has this emergency contract been extended before? Please detail in the space below:

BidBuy Reference # Amount Start Date End Date

24-478HFS-MEDPR-B-43512 $2,778,078.32 Jun 14, 2024 Dec 14, 2024

$0.00

$0.00

1. Provide detail about the events that led the agency to conduct an emergency procurement:

The current Pharmacy Benefit Management System (PBMS) is a proprietary system which was awarded through the Request for Proposal (RFP) process in 2014. The contract was initially awarded to Goold Health Systems, however, the Vendor's name changed to Change Healthcare Pharmacy Solutions, Inc. in 2018. The resulting contract from this award expired on 03/16/24.

According to 30 ILCS 500/20-60 (a) limits the duration of contracts to ten (10) years inclusive of renewals and extensions. As such, HFS established an emergency contract from 03/17/2024 through 06/14/2024 to allow time to continue the competitive procurement process.

Emergency Purchase Extension Approval v.25.2 Page 2 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service

Prior to the Emergency Purchase declaration, HFS was actively working towards procuring a Sole Economically Feasible Source contract with the vendor for one year (24-478HFS-MEDPR-B-41734). The State Purchasing Officer (SPO) approved the contract to be sent to the vendor on February 29, 2024, and the contract was sent to the vendor for review on March 1, 2024. However, on February 18, 2024, the vendor experienced a significant cybersecurity breach that severely impacted their operations, causing delays in their ability to review the contract in a timely manner. As a result, the vendor’s legal team was unable to respond to the contract within the requested time-frame. The vendor returned a partially redlined version of the contract on March 9, 2024, leaving insufficient time for HFS to thoroughly review and address potential contract issues. A comprehensive review would have required input from HFS' Office of General Counsel, Bureau of Fiscal Operations, and the Illinois Governor's Office. After discussions with the SPO, it was determined that an emergency purchase was necessary to ensure the continuation of these critical and potentially life-saving pharmacy services for Illinois’ most vulnerable populations.

2. What is the scope of work of the initial emergency contract? Please detail below:

HFS relies on the annual revenues of $2.4 billion (approximately $200 million per month) generated by the Drug Rebate program through collected rebates, which is crucial to funding many of the State's Medicaid programs. The Agency requires a vendor to provide claims reimbursement to receive payment for the appropriate state and federal rebate amounts. This process ensures that customers can access all necessary life-saving medications, maintenance medications, over-the-counter drugs, and vaccines. To meet these requirements, HFS needs a Pharmacy Benefit Management System (PBMS) to process and adjudicate pharmacy claims, complying with Federal Regulations, Illinois Statutes, associated Illinois Administrative Rules, and policies set by State and Federal Governments. Pharmacies also rely on this PBMS to submit pharmacy claims for payment. The PBMS facilitates prior authorizations, which are essential for the health and safety of approximately 3.9 million Illinois Medicaid customers. The PBMS enables the management of a Preferred Drug List (PDL), which would not be enforceable without a functional PBMS to monitor and edit claims. The current system interfaces with the provider enrollment system, eligibility systems, and the legacy MMIS system. Additionally, technical services are necessary during the contract to allow for programmatic changes/additions which may arise during the contract period and to ensure a smooth transition of data to a newly awarded Vendor.

The Vendor has provided extensive programming to include addition of unique edits and overrides to accommodate the specific business rules and policies for the State of Illinois. Some examples include the 4-Script Rejection edit, which allows clinical pharmacists to review for medical necessity, edits related to 340B discounted drugs, which are identified at the claims level instead of the provider level and are unique to the State of Illinois. Additionally, there are state-specific pricing logic that are built into the system. This PBMS has an excess of 100 features all of each meticulously programmed, the PBMS ensures that pharmacy operations align with the requirements of Federal Regulations, Illinois State Laws, associated Administrative Rules, and policies unique to Illinois Medicaid, all while prioritizing appropriate customer care. Meeting these requirements within the time frame cannot be addressed by any other product or vendor.

3. Does this extension change the scope of work? Yes No If yes, please detail below:

In response to the cybersecurity event which occurred in February, 2024. HFS is adding the following requirements to the contract, they are at no additional charge and are intended to provide a more secure environment for data sharing and to

Emergency Purchase Extension Approval v.25.2 Page 3 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service ensure restoration of services in an organized and timely manner.

1) The Vendors' application requires a secure connection through the use of a LAN-to-LAN Virtual Private Network (VPN), which is a secure communication method that ensures encrypted communication between the Vendor’s network and the end user's network. HFS is requesting the addition of a direct VPN connection between the Vendor’s network/application and the University of Illinois Chicago (UIC) network to streamline secure access for UIC pharmacists overseeing aspects of the contract, such as pre-authorizations. Prior to the cybersecurity event in February, 2024, HFS, UIC, and the Vendor had established a temporary solution to facilitate secure access to the Vendor’s application, but after the Vendor's application was re-established in a new environment with updated network settings (e.g., IP addresses), this solution became unworkable, preventing UIC from connecting. In response, HFS issued State of Illinois laptops to UIC staff to enable direct VPN access; however, this has proven inefficient as UIC personnel are unable to reach the University’s network through HFS-issued equipment, forcing them to use both University-issued and HFS-issued devices simultaneously. To eliminate these inefficiencies, HFS is requesting a dedicated VPN connection that directly links the Vendor’s network to UIC’s network, ensuring seamless and secure communication without the need for dual equipment use.

2) HFS is also requesting the Vendor to submit a restoration plan within ten (10) business days after contract execution. This plan should include: A priority listing of critical services and systems that must be restored first. A detailed timeline for the restoration process, outlining how quickly each service will be restored. The restoration plan will help ensure that services are re-established in an organized and timely manner, reducing downtime and minimizing operational disruptions.

4. Provide justification for extending the original emergency contract:

HFS is requesting an extension of the current emergency contract to ensure the continuity of essential services while allowing additional time to complete the competitive procurement process. The requested extension will provide HFS with the necessary time to prepare and publish a competitive solicitation. Due to the significant cybersecurity attack previously mentioned, HFS has had to assume additional responsibilities typically managed by the vendor in order to maintain the Pharmacy Benefit Management System (PBMS) in operation. This has substantially delayed the development of the Request for Proposal (RFP).

While HFS is in the process of bringing on additional state staff to support these functions, the agency is not yet in a position to draft the RFP while also ensuring the ongoing operation of the PBMS.

To assist with this effort, HFS is collaborating with an external vendor under a Joint Purchase Master Contract (JPMC). This vendor is working to develop a Business Capability Model (BCM) that will map out the full scope of work required to support HFS’ pharmacy services. The vendor will also conduct an expanded market scan to identify which states are using a Pharmacy Benefit Management System (PBMS) versus a Pharmacy Benefit Manager/Administrator. The findings from this research will be invaluable in shaping and strengthening HFS’ upcoming RFP.

Emergency Purchase Extension Approval v.25.2 Page 4 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service

A transition period will be established to allow sufficient time for the implementation. During this period, the incumbent Vendor will be required to collaborate closely with the new Vendor to ensure a smooth and seamless transition of services. This collaboration must include the transfer of all necessary data, knowledge, and technical resources to facilitate uninterrupted operations and full compliance with the requirements. The incumbent Vendor will also provide support and guidance as needed to address any issues that arise during the transition process.

Without the requested extension, HFS will face severe challenges in maintaining its pharmacy services, which are critical to Illinois' most vulnerable populations. The continued availability of these services is vital to ensure access to potentially life-saving medications and care. HFS intends to cancel the emergency contract when a new contract is executed.

5. Does this emergency contract correct or eliminate the emergency condition?

Yes No Please detail:

6. Explain why the need cannot be met through a competitive procurement process.

HFS intends to procure these services through a competitive process and is working diligently toward the successful completion of the current emergency contract. However, due to recent changes in the Pharmacy Benefit environment and marketplace conditions, HFS has had to re-evaluate its needs. To support this effort, HFS is collaborating with an external vendor through a Joint Purchase Master Contract (JPMC). This vendor has provided invaluable Subject Matter Expertise (SME) in the Pharmacy Benefit area, expertise that the agency has lost in recent years.

Given these considerations, HFS requests an extension of the emergency contract from December 15, 2024, to December 14, 2025. This extension will provide the necessary time for the Department to post a new solicitation, complete the competitive procurement process, successfully award a new contract and transition from the current system to the newly awarded solution.

HFS intends to cancel the emergency contract once a competitive procurement has been successfully published, awarded, and executed.

7. Is a competitive procurement in process to replace this emergency contract?

Yes No Status: in development

HFS plans to issue a new Request for Proposal in FY25, Quarter 2, with an estimated contract execution in FY25, Quarter 4.

The agency is also exploring alternative options. To ensure a smooth implementation, HFS has accounted for a transition period. The emergency contract will be canceled once a new contract is established and fully implemented.

8. What is the effect of a denial of this extension request?

This procurement is critical for maintaining the operational integrity of the Illinois Medicaid program, particularly in ensuring the

Emergency Purchase Extension Approval v.25.2 Page 5 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service continuity of pharmacy benefits management (PBMS). Without approval, the state risks catastrophic failure in processing and adjudicating pharmacy claims for over 3.9 million Medicaid recipients. This disruption would severely impact access to essential medications, including life-sustaining drugs, over-the-counter medicines, and vaccines, jeopardizing the health, safety, and well-being of vulnerable citizens.

The immediate consequences are dire: Illinois Medicaid beneficiaries would be unable to obtain necessary medications, potentially leading to worsened health outcomes, severe illnesses, or even fatalities. Pharmacies would also be unable to submit claims for reimbursement, leading to a breakdown in the entire pharmacy system and further amplifying the crisis.

In addition to the direct health and safety risks, the absence of a functioning PBMS would have profound financial implications.

For example, the state's Drug Rebate program, which generates more than $2.4 billion annually (approximately $200 million per month), is a key revenue stream that supports various Medicaid programs. Without a functioning PBMS, these critical revenue flows would be jeopardized, potentially destabilizing the entire Medicaid program and undermining other essential services within the Department of Healthcare and Family Services (HFS).

Furthermore, transitioning to a new vendor requires careful planning and execution, including migrating historical data from the current system to the new platform. Continued support for existing file formats is essential to ensure a smooth transition and to avoid any interruption in services or payments during the gap between contracts.

The risks posed by a failed PBMS system are far-reaching, impacting not only health outcomes for millions of Illinois residents but also the financial viability of key Medicaid programs. Given the severity of these consequences, the approval of this procurement is urgent and necessary to safeguard the well-being of the state's most vulnerable populations.

Emergency Purchase Extension Approval v.25.2 Page 6 of 6

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Zip: 37217State: TNCity: NashvilleAddress: 1655 Murfreesboro Pike, Suite D

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62704State: ILCity: SpringfieldAddress: 201 South Grand Ave E

Requesting Agency: HFS - Health and Family Services Division: Bureau of Professional & Ancillary Service

BidBuy Reference #: 25-478HFS-MEDPR-B-45475

Signatures below cannot be delegated.

APO Signature I am requesting an extension of the requested emergency contract. I believe all statements herein are true and correct to the best of my knowledge.

APO Signature: Date: 11/18/2024

SPO Signature

SPO Signature: Date: 11/18/2024

CPO Signature Based on my review, I approve the Agency to proceed in accordance with the emergency contract extension detailed in this document.

Based upon my review, I approve the Agency to proceed with the following changes:

CPO Signature: Date: Nov 25, 2024

Page of

Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

State of Illinois Chief Procurement Office for General Services Emergency Purchase Extension Approval v. 25.2

EMERGENCY PURCHASE EXTENSION APPROVAL

State of Illinois Chief Procurement Office for General Services Emergency Purchase Extension Approval v.25.2 Page of Section 20-30(a) of the Procurement Code provides that a contract for an emergency may be extended beyond 90 calendar days with the approval of the chief procurement officer (CPO). Prior to execution of the extension, the CPO shall receive this completed form justifying the extension. The duration of the extension shall be limited to the scope of the emergency.

Extension Justification Actual or Estimated:

Has this emergency contract been extended before? Please detail in the space below:

BidBuy Reference # Amount Start Date End Date

1. Provide detail about the events that led the agency to conduct an emergency procurement:

2. What is the scope of work of the initial emergency contract? Please detail below:

3. Does this extension change the scope of work?

If yes, please detail below:

4. Provide justification for extending the original emergency contract:

5. Does this emergency contract correct or eliminate the emergency condition?

Please detail:

6. Explain why the need cannot be met through a competitive procurement process.

7. Is a competitive procurement in process to replace this emergency contract?

8. What is the effect of a denial of this extension request?

Signatures below cannot be delegated.

APO Signature I am requesting an extension of the requested emergency contract. I believe all statements herein are true and correct to the best of my knowledge.

SPO Signature CPO Signature 11.0.0.20130303.1.892433.887364

DropDownList1: If no, explain why
DropDownList1: HFS - Health and Family Services
DropDownList1: HFS - Health and Family Services
DropDownList1: HFS - Health and Family Services
DropDownList1: HFS - Health and Family Services
DropDownList1: HFS - Health and Family Services
DropDownList1: HFS - Health and Family Services
CurrentPage:
PageCount:
VendorZip: 37217
VendorState: TN
VendorCity: Nashville
VendorAddress: 1655 Murfreesboro Pike, Suite D
Vendor: Change Healthcare Pharmacy Solutions, Inc.
AgencyZip: 62704
AgencyState: IL
AgencyCity: Springfield
AgencyAddress: 201 South Grand Ave E
AgencyDivision: Bureau of Professional & Ancillary Services
ReferenceNumber: 25-478HFS-MEDPR-B-45475
AmountOfOriginal: 4290240.32000000
ActualOrEstimated2: Estimated
TextField15: 24-478HFS-MEDPR-B-42259
Start: 2024-03-17
End: 2024-12-14
ExpectedExtensionStartDate: 2024-12-13
ExpectedExtensionEnd: 2025-12-14
AmtExtensionExpenditure: 5886113.00000000
ActualOrEstimated3: Estimated
TextField5: This vendor was emailed about a potential BEP goal. Vendor declined to participate in the BEP program as they are unable to provide a BEP for the proprietary applications that are utilized by the State of Illinois in a software-as-a-service application.

The applications were customized for the State of Illinois as part of the design/development process.

TextField7: 24-478HFS-MEDPR-B-43512
NumericField4: 2778078.32000000
DateField3: 2024-06-14
DateField4: 2024-12-14
TextField8:
NumericField2: 0
DateField5:
DateField6:
TextField9:
NumericField3: 0
DateField7:
DateField8:
TextField6: The current Pharmacy Benefit Management System (PBMS) is a proprietary system which was awarded through the Request for Proposal (RFP) process in 2014. The contract was initially awarded to Goold Health Systems, however, the Vendor's name changed to Change Healthcare Pharmacy Solutions, Inc. in 2018. The resulting contract from this award expired on 03/16/24. According to 30 ILCS 500/20-60 (a) limits the duration of contracts to ten (10) years inclusive of renewals and extensions. As such, HFS established an emergency contract from 03/17/2024 through 06/14/2024 to allow time to continue the competitive procurement process.

Prior to the Emergency Purchase declaration, HFS was actively working towards procuring a Sole Economically Feasible Source contract with the vendor for one year (24-478HFS-MEDPR-B-41734). The State Purchasing Officer (SPO) approved the contract to be sent to the vendor on February 29, 2024, and the contract was sent to the vendor for review on March 1, 2024. However, on February 18, 2024, the vendor experienced a significant cybersecurity breach that severely impacted their operations, causing delays in their ability to review the contract in a timely manner. As a result, the vendor’s legal team was unable to respond to the contract within the requested time-frame. The vendor returned a partially redlined version of the contract on March 9, 2024, leaving insufficient time for HFS to thoroughly review and address potential contract issues. A comprehensive review would have required input from HFS' Office of General Counsel, Bureau of Fiscal Operations, and the Illinois Governor's Office. After discussions with the SPO, it was determined that an emergency purchase was necessary to ensure the continuation of these critical and potentially life-saving pharmacy services for Illinois’ most vulnerable populations.

TextField13: HFS relies on the annual revenues of $2.4 billion (approximately $200 million per month) generated by the Drug Rebate program through collected rebates, which is crucial to funding many of the State's Medicaid programs. The Agency requires a vendor to provide claims reimbursement to receive payment for the appropriate state and federal rebate amounts. This process ensures that customers can access all necessary life-saving medications, maintenance medications, over-the-counter drugs, and vaccines. To meet these requirements, HFS needs a Pharmacy Benefit Management System (PBMS) to process and adjudicate pharmacy claims, complying with Federal Regulations, Illinois Statutes, associated Illinois Administrative Rules, and policies set by State and Federal Governments. Pharmacies also rely on this PBMS to submit pharmacy claims for payment. The PBMS facilitates prior authorizations, which are essential for the health and safety of approximately 3.9 million Illinois Medicaid customers. The PBMS enables the management of a Preferred Drug List (PDL), which would not be enforceable without a functional PBMS to monitor and edit claims. The current system interfaces with the provider enrollment system, eligibility systems, and the legacy MMIS system. Additionally, technical services are necessary during the contract to allow for programmatic changes/additions which may arise during the contract period and to ensure a smooth transition of data to a newly awarded Vendor.

The Vendor has provided extensive programming to include addition of unique edits and overrides to accommodate the specific business rules and policies for the State of Illinois. Some examples include the 4-Script Rejection edit, which allows clinical pharmacists to review for medical necessity, edits related to 340B discounted drugs, which are identified at the claims level instead of the provider level and are unique to the State of Illinois. Additionally, there are state-specific pricing logic that are built into the system. This PBMS has an excess of 100 features all of each meticulously programmed, the PBMS ensures that pharmacy operations align with the requirements of Federal Regulations, Illinois State Laws, associated Administrative Rules, and policies unique to Illinois Medicaid, all while prioritizing appropriate customer care. Meeting these requirements within the time frame cannot be addressed by any other product or vendor.

CheckBox7: 0
CheckBox8: 1
TextField1: In response to the cybersecurity event which occurred in February, 2024. HFS is adding the following requirements to the contract, they are at no additional charge and are intended to provide a more secure environment for data sharing and to ensure restoration of services in an organized and timely manner.

1) The Vendors' application requires a secure connection through the use of a LAN-to-LAN Virtual Private Network (VPN), which is a secure communication method that ensures encrypted communication between the Vendor’s network and the end user's network. HFS is requesting the addition of a direct VPN connection between the Vendor’s network/application and the University of Illinois Chicago (UIC) network to streamline secure access for UIC pharmacists overseeing aspects of the contract, such as pre-authorizations. Prior to the cybersecurity event in February, 2024, HFS, UIC, and the Vendor had established a temporary solution to facilitate secure access to the Vendor’s application, but after the Vendor's application was re-established in a new environment with updated network settings (e.g., IP addresses), this solution became unworkable, preventing UIC from connecting. In response, HFS issued State of Illinois laptops to UIC staff to enable direct VPN access; however, this has proven inefficient as UIC personnel are unable to reach the University’s network through HFS-issued equipment, forcing them to use both University-issued and HFS-issued devices simultaneously. To eliminate these inefficiencies, HFS is requesting a dedicated VPN connection that directly links the Vendor’s network to UIC’s network, ensuring seamless and secure communication without the need for dual equipment use.

2) HFS is also requesting the Vendor to submit a restoration plan within ten (10) business days after contract execution. This plan should include: A priority listing of critical services and systems that must be restored first. A detailed timeline for the restoration process, outlining how quickly each service will be restored. The restoration plan will help ensure that services are re-established in an organized and timely manner, reducing downtime and minimizing operational disruptions.

TextField2: HFS is requesting an extension of the current emergency contract to ensure the continuity of essential services while allowing additional time to complete the competitive procurement process. The requested extension will provide HFS with the necessary time to prepare and publish a competitive solicitation. Due to the significant cybersecurity attack previously mentioned, HFS has had to assume additional responsibilities typically managed by the vendor in order to maintain the Pharmacy Benefit Management System (PBMS) in operation. This has substantially delayed the development of the Request for Proposal (RFP). While HFS is in the process of bringing on additional state staff to support these functions, the agency is not yet in a position to draft the RFP while also ensuring the ongoing operation of the PBMS.

To assist with this effort, HFS is collaborating with an external vendor under a Joint Purchase Master Contract (JPMC). This vendor is working to develop a Business Capability Model (BCM) that will map out the full scope of work required to support HFS’ pharmacy services. The vendor will also conduct an expanded market scan to identify which states are using a Pharmacy Benefit Management System (PBMS) versus a Pharmacy Benefit Manager/Administrator. The findings from this research will be invaluable in shaping and strengthening HFS’ upcoming RFP.

A transition period will be established to allow sufficient time for the implementation. During this period, the incumbent Vendor will be required to collaborate closely with the new Vendor to ensure a smooth and seamless transition of services. This collaboration must include the transfer of all necessary data, knowledge, and technical resources to facilitate uninterrupted operations and full compliance with the requirements. The incumbent Vendor will also provide support and guidance as needed to address any issues that arise during the transition process.

Without the requested extension, HFS will face severe challenges in maintaining its pharmacy services, which are critical to Illinois' most vulnerable populations. The continued availability of these services is vital to ensure access to potentially life-saving medications and care. HFS intends to cancel the emergency contract when a new contract is executed.

WhoAuthorizedWork:
CheckBox3: 1
CheckBox4: 0
TextField10:
TextField12: HFS intends to procure these services through a competitive process and is working diligently toward the successful completion of the current emergency contract. However, due to recent changes in the Pharmacy Benefit environment and marketplace conditions, HFS has had to re-evaluate its needs. To support this effort, HFS is collaborating with an external vendor through a Joint Purchase Master Contract (JPMC). This vendor has provided invaluable Subject Matter Expertise (SME) in the Pharmacy Benefit area, expertise that the agency has lost in recent years.

Given these considerations, HFS requests an extension of the emergency contract from December 15, 2024, to December 14, 2025. This extension will provide the necessary time for the Department to post a new solicitation, complete the competitive procurement process, successfully award a new contract and transition from the current system to the newly awarded solution. HFS intends to cancel the emergency contract once a competitive procurement has been successfully published, awarded, and executed.

CheckBox6: 1
CheckBox5: 0
DropDownList2: in development
TextField11: HFS plans to issue a new Request for Proposal in FY25, Quarter 2, with an estimated contract execution in FY25, Quarter 4. The agency is also exploring alternative options. To ensure a smooth implementation, HFS has accounted for a transition period. The emergency contract will be canceled once a new contract is established and fully implemented.
TextField14: This procurement is critical for maintaining the operational integrity of the Illinois Medicaid program, particularly in ensuring the continuity of pharmacy benefits management (PBMS). Without approval, the state risks catastrophic failure in processing and adjudicating pharmacy claims for over 3.9 million Medicaid recipients. This disruption would severely impact access to essential medications, including life-sustaining drugs, over-the-counter medicines, and vaccines, jeopardizing the health, safety, and well-being of vulnerable citizens.

The immediate consequences are dire: Illinois Medicaid beneficiaries would be unable to obtain necessary medications, potentially leading to worsened health outcomes, severe illnesses, or even fatalities. Pharmacies would also be unable to submit claims for reimbursement, leading to a breakdown in the entire pharmacy system and further amplifying the crisis.

In addition to the direct health and safety risks, the absence of a functioning PBMS would have profound financial implications. For example, the state's Drug Rebate program, which generates more than $2.4 billion annually (approximately $200 million per month), is a key revenue stream that supports various Medicaid programs. Without a functioning PBMS, these critical revenue flows would be jeopardized, potentially destabilizing the entire Medicaid program and undermining other essential services within the Department of Healthcare and Family Services (HFS).

Furthermore, transitioning to a new vendor requires careful planning and execution, including migrating historical data from the current system to the new platform. Continued support for existing file formats is essential to ensure a smooth transition and to avoid any interruption in services or payments during the gap between contracts.

The risks posed by a failed PBMS system are far-reaching, impacting not only health outcomes for millions of Illinois residents but also the financial viability of key Medicaid programs. Given the severity of these consequences, the approval of this procurement is urgent and necessary to safeguard the well-being of the state's most vulnerable populations.

TextField3: 25-478HFS-MEDPR-B-45475
AuthorizedSignature:
TitleField: 11/18/2024
SignatureField2:
DateField2: 11/18/2024
CheckBox1: 1
CheckBox2: 0
TextField4:
SignatureField1:
DateField1: 2024-11-25

File details come from the government source that posted it. Updated .