PBMS EPS~2.pdf

EMERGENCY PURCHASE STATEMENT

Emergency Statement Page 1 of 3 State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement Version v.23.1

Zip: 04332State: MECity: Augusta Address: 45 Commerce Drive, Suite 5

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62763State: ILCity: SpringfieldAddress: 201 South Grand Avenue

Division: Bureau of Professional and Ancillary ServicesAgency: Illinois Healthcare and Family Services (HFS)

Emergency Purchase Details Reference #: 24-478HFS-MEDPR-B-42259

Emergency Category (select the appropriate option from the drop-down menu below):

To prevent or minimize serious disruption in critical State services that affect health, safety, or collection of substantial State revenues

Reason for selection of this particular vendor:

The current PBMS is a proprietary system which was awarded to Change Healthcare Pharmacy Solutions, Inc. through the Request for Proposal process which will expire on 03/16/24. 30 ILCS 500/20-60 (a) limits the duration of contracts to ten (10) years inclusive of renewals and extensions. HFS intends to establish an emergency contract from 03/17/2024 through an anticipation end date of 06/15/2024.

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.

Due to circumstances outside of HFS' control, HFS is declaring an emergency to ensure the continuity of services. Change Healthcare Pharmacy Solutions, Inc. has agreed to a 90-day emergency contract to ensure that there is no lapse in service. Any break in service would be extremely detrimental to the Department of Healthcare and Family Services and their constituents who rely on these pharmacy benefit services. HFS sought and has approval for a sole source and as soon as that contract can be put into place, this emergency will be cancelled.

Description of supplies or services to be provided:

HFS relies on the annual revenue 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 absence of a PBMS /Vendor would result in a catastrophic failure of HFS' ability to process and adjudicate pharmacy claims. This

Emergency Statement Page 2 of 3 State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement Version v.23.1

Zip: 04332State: MECity: Augusta Address: 45 Commerce Drive, Suite 5

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62763State: ILCity: SpringfieldAddress: 201 South Grand Avenue

Division: Bureau of Professional and Ancillary ServicesAgency: Illinois Healthcare and Family Services (HFS) would have dire consequences for over 3.9 million Illinois Medicaid customers, as they would be unable to access essential medications, maintenance drugs, over-the-counter medicines, or vaccines, putting their health, life and safety at significant risk. Furthermore, pharmacies would be unable to submit pharmacy claims for payment. The impact on life and health, combined with the long-term ramifications of a failed PBMS, cannot be underestimated. The State of Illinois Medicaid program primarily serves the most vulnerable citizens of the state, and depriving them of access to healthcare could lead to severe illnesses, injuries, and even fatalities. The absence of a functional PBMS not only endangers the Pharmacy program and its beneficiaries but also directly impacts the funding of various other programs within HFS. The Drug Rebate program alone generates over $2.4 billion ($200 million monthly) in revenue, which plays a crucial role in funding the state's Medicaid programs. Additionally, there is a need for transition services to migrate historical data from the current system to the new one and to facilitate the closure of the existing contract. Support services with the current file formats will be essential to bridge the gap between the current contract and the contract with the newly procured vendor.

Emergency procurements shall be made with as much competition as is practicable under the circumstances, and agencies shall utilize best efforts to include contractors certified under the Business Enterprise Program in its emergency procurement process. 30 ILCS 500/20-30(a).

List the actions taken by the agency that constitute its best efforts to include contractors certified under the Business Enterprise Program in this emergency purchase:

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.

Is there an existing State contract available for the required supplies or services? Yes No

If Yes is checked above, explain why the existing contract does not meet the need:

The current PBMS is a proprietary system which was awarded to Change Healthcare Pharmacy Solutions, Inc. through the Request for Proposal process which will expire on 03/16/24. 30 ILCS 500/20-60 (a) limits the duration of contracts to ten (10) years inclusive of renewals and extensions. HFS intends to establish an emergency contract from 03/17/2024 through an anticipation end date of 06/15/2024.

Expected Start Date: Mar 17, 2024 Estimated End Date*: Jun 15, 2024

Amount of this expenditure is: $1,512,162.00 Actual or Estimated*: Estimated *

*Estimated end date and cost will be reported later.

Select the type of funding to be used: Federal Funds State Appropriated Funds State Grant Funds Other

Emergency Statement Page 3 of 3 State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement Version v.23.1

Zip: 04332State: MECity: Augusta Address: 45 Commerce Drive, Suite 5

Vendor: Change Healthcare Pharmacy Solutions, Inc.

Zip: 62763State: ILCity: SpringfieldAddress: 201 South Grand Avenue

Division: Bureau of Professional and Ancillary ServicesAgency: Illinois Healthcare and Family Services (HFS)

Signature This emergency purchase was made with as much competition as is practicable under the circumstances. Best efforts were utilized to include contractors certified under the Business Enterprise Program in the process.

I am authorized to make this emergency purchase, and I know and understand the contents of this statement and all statements herein are true and correct to the best of my knowledge.

Agency Signature: Title: Agency Procurement Officer

Printed Name: Devin McQuillan Date: Mar 19, 2024

State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement V.23.1 Emergency Statement Page of

EMERGENCY PURCHASE STATEMENT

Emergency Statement Page of State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement Version v.23.1 Emergency Purchase Details Emergency Category (select the appropriate option from the drop-down menu below):

Reason for selection of this particular vendor:

Description of supplies or services to be provided:

Emergency procurements shall be made with as much competition as is practicable under the circumstances, and agencies shall utilize best efforts to include contractors certified under the Business Enterprise Program in its emergency procurement process. 30 ILCS 500/20-30(a).

List the actions taken by the agency that constitute its best efforts to include contractors certified under the Business Enterprise Program in this emergency purchase:

Is there an existing State contract available for the required supplies or services?

If Yes is checked above, explain why the existing contract does not meet the need:

Actual or Estimated*:

*Estimated end date and cost will be reported later.

Select the type of funding to be used:

Signature This emergency purchase was made with as much competition as is practicable under the circumstances. Best efforts were utilized to include contractors certified under the Business Enterprise Program in the process.

I am authorized to make this emergency purchase, and I know and understand the contents of this statement and all statements herein are true and correct to the best of my knowledge.

11.0.0.20130303.1.892433.887364

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.

Due to circumstances outside of HFS' control, HFS is declaring an emergency to ensure the continuity of services. Change Healthcare Pharmacy Solutions, Inc. has agreed to a 90-day emergency contract to ensure that there is no lapse in service. Any break in service would be extremely detrimental to the Department of Healthcare and Family Services and their constituents who rely on these pharmacy benefit services. HFS sought and has approval for a sole source and as soon as that contract can be put into place, this emergency will be cancelled.

ExplanationSuppliesServices: HFS relies on the annual revenue 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 absence of a PBMS /Vendor would result in a catastrophic failure of HFS' ability to process and adjudicate pharmacy claims. This would have dire consequences for over 3.9 million Illinois Medicaid customers, as they would be unable to access essential medications, maintenance drugs, over-the-counter medicines, or vaccines, putting their health, life and safety at significant risk. Furthermore, pharmacies would be unable to submit pharmacy claims for payment. The impact on life and health, combined with the long-term ramifications of a failed PBMS, cannot be underestimated. The State of Illinois Medicaid program primarily serves the most vulnerable citizens of the state, and depriving them of access to healthcare could lead to severe illnesses, injuries, and even fatalities. The absence of a functional PBMS not only endangers the Pharmacy program and its beneficiaries but also directly impacts the funding of various other programs within HFS. The Drug Rebate program alone generates over $2.4 billion ($200 million monthly) in revenue, which plays a crucial role in funding the state's Medicaid programs. Additionally, there is a need for transition services to migrate historical data from the current system to the new one and to facilitate the closure of the existing contract. Support services with the current file formats will be essential to bridge the gap between the current contract and the contract with the newly procured vendor.

TextField1: 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.