S000000161 Pharmacy Benefits Manager.pdf

STATE OF ARKANSAS

DEPARTMENT OF TRANSFORMATION AND SHARED SERVICES

OFFICE OF STATE PROCUREMENT

501 Woodlane St., Ste. 220

Little Rock, Arkansas 72201-1023

REQUEST FOR PROPOSAL (MAP)

SOLICITATION DOCUMENT

SOLICITATION INFORMATION

Solicitation Number: S000000161 Solicitation

Issued: October 28, 2022

Description: Pharmacy Benefit Manager

Department: Department of Transformation and Shared Services – Employee Benefits Division

SUBMISSION DEADLINE AND DELIVERY OF RESPONSE DOCUMENTS

Proposal Opening Date: November 30, 2022 Proposal Opening Time: 2:00 PM, Central Time

Proposal submissions for this Request for Proposal must be submitted through ARBuy, the State’s eProcurement system. It can be accessed at https://arbuy.arkansas.gov. Proposals received after the submission deadline may be rejected as untimely. See Section 1.2 for information regarding Live Proposal Openings.

TSS OFFICE OF STATE PROCUREMENT CONTACT INFORMATION

TSS OSP Buyer: Tanya Freeman Buyer’s Direct Phone Number: 501-682-4140

Email Address: Tanya.freeman@arkansas.gov TSS OSP’s Main Number: 501-324-9316

TSS OSP

Website: https://www.transform.ar.gov/procurement/ https://arbuy.arkansas.gov/ mailto:Tanya.freeman@arkansas.gov https://www.transform.ar.gov/procurement/

SECTION 1 – GENERAL INFORMATION AND INSTRUCTIONS

• Do not provide responses to items in this section unless specifically and expressly required.

1.1 INTRODUCTION

This Request for Proposal (RFP) is issued by the TSS Office of State Procurement (TSS OSP) for the TSS Employee Benefits Division (“EBD” or “Division”) to obtain pricing and a contract for a Pharmacy Benefit Manager (PBM) to implement and administer self-funded pharmacy benefits provided by the State of Arkansas for the Arkansas State and Public School Employee Health Insurance Plan (hereinafter referred to as the “Plan”).

The Contract will be awarded to the Prospective Contractor determined to have submitted the proposal that is the most advantageous to the State. Direct all questions, comments, or concerns you may have regarding this solicitation to the TSS OSP, not the Division.

1.2 LIVE PROPOSAL OPENING

Use the information below to view the proposal opening online.

Zoom Meeting Link:

https://arkansas-gov.zoom.us/j/89588072581?pwd=bnFmYlhTQWlYdHUvWCtxdVdQcUY4QT09 Meeting ID: 895 8807 2581 Meeting Password: 676181 Dial-In Information: 877 853 5257 US Toll-free 888 475 4499 US Toll-free

1.3 TYPE OF CONTRACT

A. As a result of this RFP, TSS OSP intends to award a contract to a single Contractor for PBM services.

B. The anticipated starting date for any resulting contract is July 1, 2023, except that the actual contract start date may be adjusted unilaterally by the State for up to three (3) calendar months. By submitting a signed proposal in response to the RFP, the Prospective Contractor represents and warrants that it will honor its proposal as being held open as irrevocable for this period.

C. The initial term of a resulting contract will be from the contract award date until December 31, 2026.

Upon mutual agreement by the Contractor and Division, the contract may be renewed by TSS OSP for up to three (3) additional one-year terms or portions thereof, not to exceed a total aggregate contract term of seven (7) consecutive years.

1.4 SOLICITATION SCHEDULE

For informational purposes, TSS OSP is providing a Solicitation Schedule; however, dates listed and noted with an asterisk (*) are anticipated dates only and are subject to change at the discretion of the State. All times are listed in Central Time.

TABLE A: TENTATIVE SOLICITATION SCHEDULE

ACTIVITY DATE

RFP Release to Prospective Contractors October 28, 2022 Bidders Conference November 1, 2022, 1:00 pm Deadline for Prospective Contractor Questions November 9, 2022, 4:00 pm Answers to Questions Posted to ARBuy* November 16, 2022 Proposal Due Date November 30, 2022, 2:00 pm Initial Proposal Evaluation* December 1, 2022 Interviews* December 12-13, 2022 https://arkansas-gov.zoom.us/j/89588072581?pwd=bnFmYlhTQWlYdHUvWCtxdVdQcUY4QT09

Final Proposal Evaluation* December 13, 2022 Discussions Kick Off Meeting* January 5, 2023 Finalize Discussions* January 19, 2023 Post Anticipation to Award* January 20, 2023 Award Contract* February 20, 2023

1.5 BIDDERS CONFERENCE

A. TSS OSP will host a bidders conference to provide additional information and clarification regarding the RFP.

1. The conference will take place on the date and time listed in Section 1.4 Table A.

2. The conference is important for Prospective Contractors to understand the tasks a Prospective Contractor shall complete when submitting a proposal (“Submission Requirements”).

3. Prospective Contractors may attend the conference via Zoom.

Zoom Meeting Link:

https://arkansas-gov.zoom.us/j/85448249447?pwd=MXBuOTNFaXJzRlMrb0RJd2x6M1ZCQT09 Meeting ID: 854 4824 9447 Meeting Password: 998675 Dial-In Information: 877 853 5257 US Toll-free 888 475 4499 US Toll-free

4. The bidders conference presentation will be posted to the Solicitation posting in ARBuy.

1.6 CLARIFICATION OF SOLICITATION

A. Submit any questions requesting clarification of information contained in this Solicitation via the

Solicitation posting in ARBuy by the date and time listed in Section 1.4 Table A.

1. For each question submitted, Prospective Contractor should reference the specific Solicitation item number to which the question refers.

2. Prospective Contractors’ written questions will be consolidated and responded to by the State as deemed appropriate. The State’s consolidated written response is anticipated to be posted to the Solicitation posting in ARBuy by the close of business on the date provided in Section 1.4, Table A. If Prospective Contractor questions are unclear or non-substantive in nature, the State may request clarification of a question(s) or decline to answer.

B. The Prospective Contractor should notify the TSS OSP buyer of any term, condition, etc., that precludes the Prospective Contractor from submitting a compliant, Responsive Proposal. Prospective Contractors should note that it is the responsibility of the Prospective Contractor to seek resolution of all such issues, including those relating to the terms and conditions of the contract, prior to the submission of a proposal.

C. Prospective Contractors may contact the TSS OSP buyer with non-substantive questions at any time prior to the proposal opening.

D. An oral statement by TSS OSP will not be part of any contract resulting from this Solicitation and may not reasonably be relied on by any Prospective Contractor as an aid to interpretation unless it is reduced to writing and expressly adopted by TSS OSP.

1.7 DEFINITION OF TERMS*

A. Unless otherwise defined herein, all terms defined in Arkansas Procurement Law have the same meaning herein.

https://arkansas-gov.zoom.us/j/85448249447?pwd=MXBuOTNFaXJzRlMrb0RJd2x6M1ZCQT09

B. “Business Day” means a day occurring Monday through Friday excluding State holidays as listed on the Arkansas Secretary of State’s website at https://www.sos.arkansas.gov/news/state-holiday-calendar/.

C. “Go-Live Date” refers to the date immediately following the Implementation Period whereby the Contractor shall begin providing all Pharmacy Benefit Management services required by this solicitation, anticipated to be July 1, 2023.

D. “House Generic” means a drug with the Multisource code field in Medi-Span of “O” when there is a Dispense as Written (DAW) code of 3,4,5,6.

E. “Implementation Period” refers to the period of time beginning on the starting date of the contract, anticipated to be February 20, 2023, during which the Contractor shall perform all the start-up and implementation activities required to achieve full implementation by the Go-Live Date.

F. “Limited Distribution Drugs” or “LDD” means therapies only made available to a small number of pharmacies as determined by the pharmaceutical manufacturer.

G. “Prospective Contractor” means a responsible offeror who submits a proposal in response to this solicitation.

H. “Rebate” refers to compensation or remuneration of any kind received or recovered from a pharmaceutical manufacturer attributable to the purchase or utilization of covered drugs by eligible persons, including, but not limited to, incentive rebates categorized as purchase discounts; credits;

rebates, regardless of how categorized; market share incentives; promotional allowances;

commissions; educational grants; market share of utilization; drug pull-through programs;

implementation allowances; clinical detailing; rebate submission fees; and administrative or management fees. Rebates also include any fees the Contractor receives from a pharmaceutical manufacturer for administrative costs, formulary placement, and/or access.

I. The terms “Request for Proposal,” “RFP,” and “Solicitation” are used synonymously in this document.

J. “Requirement” means something required.

K. “Responsive Proposal” means a proposal submitted in response to this solicitation that conforms in all material respects to this RFP.

L. “Shall” and “ must” mean the imperative and are used to identify requirements.

M. “Specification” means any technical or purchase description or other description of the physical or functional characteristics, or of the nature, of a commodity or service. “Specification” may include a description of any requirement for inspecting, testing, or preparing a commodity or service for delivery.

N. “State” means the State of Arkansas. When the term “State” is used herein to reference any obligation of the State under a contract that results from this solicitation, that obligation is limited to the Department/Division using such a contract.

O. “Transparent” refers to an all-inclusive administrative fee and 100% pass through of pharmaceutical manufacturer revenue that is fully verifiable and auditable from Specialty and Non-Specialty drug utilization.

1.8 RESPONSE DOCUMENTS

A. All proposal responses must be submitted through ARBuy, the State’s eProcurement system. The system can be accessed at https://arbuy.arkansas.gov.

https://www.sos.arkansas.gov/news/state-holiday-calendar/ https://www.sos.arkansas.gov/news/state-holiday-calendar/ https://arbuy.arkansas.gov/

B. Technical Proposal Packet

1. Responses within the Information for Evaluation and Exceptions sections must not contain the Prospective Contractor’s name or any other identifiers, including without limitation names of staff members, projects, products, and addresses.

2. Prospective Contractors shall utilize the Technical Proposal Packet to submit their responses.

3. The following items are proposal Submission Requirements and must be submitted as part of a Prospective Contractor’s proposal response.

a. Signed Proposal Signature Page. Signature may be ink or digital. (See Technical Proposal Packet.)

b. Technical Proposal response to the Information for Evaluation section included in the Technical Proposal Packet. Proposal response must be in the English language.

c. Completed Pricing Response.

i. S000000161 Cost Workbook attached to ARBuy Solicitation posting

• Prospective Contractors shall submit pricing as specified in RFP Sections 1.10 and

1.11 and as instructed on the Instructions tab of the S000000161 Cost Workbook.

• Pricing must be based on EBD’s actual claims data (See RFP Section 1.9 Claims Data Request).

ii. Based on the claims data provided as part of this Solicitation, provide an Exhibit(s) with NDCs identifying the Plan's applicable claims that are excluded from the Contractor’s non-specialty and Specialty drug pricing guarantees (discount, dispensing fee, and/or rebate). This should be displayed as one row per claim and should indicate for each claim whether the claim is excluded from any or all of the guarantees (discount, dispensing fee, and/or rebates). Fill out and return template document S000000161 – Drug Product Exclusions.xlsx.

iii. Average Wholesale Price (AWP) discount based pricing list in Excel of all specialty pharmaceuticals, including biosimilars plus Limited Distribution Drugs that the Contractor has access to as well as those that the Contractor does not have access to, for the proposed specialty pharmacy program.

iv. Pricing must be proposed in U.S. dollars and cents.

d. Recommended Options Form. The Recommended Options form included in the Technical Proposal Packet allows Prospective Contractors to identify any recommended options or optional service ideas that may benefit the State that were not included in the Requirements and the proposed solution

e. Proposed Subcontractors Form. The utilization of any proposed subcontractor is subject to approval by the Division.

f. Exceptions Form.

g. Copy of Prospective Contractor’s Equal Opportunity Policy.

h. Name of the proposed lowest net cost Non-Specialty and Specialty Formulary, including the proposed preferred products and tier designations.

i. List of the proposed excluded non-specialty and specialty drugs and the therapeutic alternatives.

j. Formulary Disruption Report (See Section 2.15(M) and Attachment D – Formulary Disruption Reporting)

C. The following items, which must be submitted prior to a contract award to the Prospective Contractor, may also be included with the Prospective Contractor’s proposal:

1. EO 98-04: Contract and Grant Disclosure Form.

2. Voluntary Product Accessibility Template (VPAT), if applicable.

D. DO NOT include any other documents or ancillary information, such as a cover letter or promotional/marketing information.

E. Redacted Copy of the Technical Proposal Packet and Completed Pricing Response

1. One (1) redacted (marked “REDACTED”) copy of the Prospective Contractor’s proposal response (See Section 6 of the Solicitation Terms and Conditions referenced in Section 1.13.)

1.9 CLAIMS DATA REQUEST

A. To obtain a copy of the claims data for the Pricing Response, the Prospective Contractor shall make a request via email to smceachern@segalco.com.

1. Prospective Contractors shall complete the requested non-disclosure agreement (NDA) and shall submit as directed prior to receiving claims data files (see Attachment A: Non-Disclosure Agreement).

2. Information and instructions for accessing the claims data files will be provided within twenty-four hours of receiving the signed NDA.

1.10 PRICING

A. Prospective Contractors shall provide Transparent retail pricing that requires the amount billed to the

Plan will be equal to the amount paid to the participating retail pharmacies with 100% pass through of all Rebates and pharmaceutical manufacturer revenue for the Plan that is fully verifiable and auditable.

B. Administrative fees must be entered as an all-inclusive per member per month fee and dispensing fees must be entered on a per-prescription paid basis unless noted below. Administrative Fees must cover all costs associated with compliance with the RFP. Dispensing fees must be based on prescriptions dispensed (not adjustments, errors, or redos).

1. The Administrative fee must reflect the entire cost of complying with the requirements of this RFP and the Contractor shall provide at minimum the following services:

a. Claims Adjudication and standard systems edits ( must include “refill-too-soon” edit)

b. Pricing Administration

c. Management of a Broad Retail Network Pharmacy

d. Management of an Arkansas Independent Retail Pharmacies Network

e. A Mail Order Pharmacy Program

f. One Hundred Percent (100%) Pass Through Sharing of Rebates

g. Standard and Custom System Overrides

h. Processing of Member Eligibility as Reported by EBD

i. Distribution of pharmacy directories and formulary lists mailto:smceachern@segalco.com

j. Customer Service, including dedicated Toll-free Telephone Line for Members, Pharmacists, and EBD

k. Provision of Web and Mobile App Member Services

l. Patient and Provider Education

m. Data Reporting (weekly, biweekly, monthly, quarterly and annual standard and ad-hoc reporting for non-specialty and specialty drugs)

n. Ad Hoc Reporting and Data File Requests

o. IT services, including Online/Real Time Availability to EBD and/or its designee(s)

p. Integration of PBM services with other vendors (e.g. Disease Management, Medical), if applicable

q. Retail Pharmacy Network Audit Recoveries

r. Compound Drug Management

s. Fraud, Waste and Abuse Program

t. Opioid Management Program

u. Support of EBD in Responding to Subrogation Claims

v. Processing paper Claims

w. ePrescribing Fees

x. Management of a Custom Influenza, Non-Influenza, and COVID-19 Vaccination Program

y. Facilitation of the following services provided by the Plan’s Clinical Consultant:

i. Specialty Pharmacy Network Program Management

ii. Formulary Management

iii. Systematic Prospective, Concurrent, and Retrospective Drug Utilization Review

iv. Clinical Programs and Utilization Management Edits such as Dose Optimization, Prior Authorization, Step Therapy, Quantity Limitations.

v. Appeals Processing (Standard 1st Level, 2nd Level and Urgent Appeals including standard and urgent Appeal Services for Utilization Management, formulary, and benefit reviews)

C. The Contractor shall measure and reconcile each distinct non-Rebate pricing guarantee (including discounts and dispensing fees) on a “Component” basis only and on a dollar-for-dollar basis with 100% of any shortfalls recouped by EBD.

1. “Components” include but are not limited to broad retail brand with 1-31 days’ supply, broad retail generic with 1-31 days’ supply, broad retail 90 brand with 32-93 days’ supply, broad retail 90 generic with 32-93 days’ supply, Arkansas Independents & Associations retail brand with 1-31 days’ supply, Arkansas Independents & Associations retail 90 brand with 32-93 day supply, Arkansas Independents & Associations retail generic with 1-31 days’ supply, Arkansas Independents & Associations retail 90 generic with 32-93 day supply, mail order brand, mail order generic, LDDs and specialty drugs at participating retail pharmacies, LDDs and specialty drugs at Arkansas Independents & Associations, and LDDs and specialty drugs at the Contractor’s Specialty Pharmacy.

D. The Contractor shall not utilize surpluses in one Component (including Rebates) to offset deficits in another Component.

E. The Contractor shall not utilize rebate surpluses to offset deficits in any other non-Rebate guarantee.

The Contractor shall not utilize rebate surpluses to offset deficits in Rebate guarantees for any other contractual year.

F. The Contractor shall measure and reconcile broad retail 30 and Arkansas Independents & Associations retail 30 network guarantees for prescriptions with 1-31 days' supply and broad retail 90 and Arkansas Independents & Associations retail 90 network guarantees for prescriptions with 32-93 days' supply on a separate Component basis given that they have separate guaranteed rates.

1. The Contractor shall not use a surplus for either of these guarantees to offset a shortfall for one of the other retail Component or any other Component guarantees. This must apply to each guarantee, including the separate 1-31 days' supply guarantees and the guarantees for 32-93 days' supply under the broad retail network and Arkansas Independents & Associations retail network guarantees.

G. The Contractor shall pay, dollar-for-dollar, all shortfalls between the actual result and the guarantee, to EBD within ninety (90) days of the end of each contractual year.

H. The Contractor shall not increase mail order or specialty drug dispensing fees throughout the contract term.

I. Retail 30 pricing (discounts, dispensing fees, and rebates) must apply to all claims that adjudicate at the retail 30 network with 1 - 31 days' supply. Note that rebates only apply to rebate-eligible Brand claims.

J. Retail 90 pricing (discounts, dispensing fees, and rebates) must apply to all claims that adjudicate at the retail 90 network with greater than 31 days' supply. Note that rebates only apply to rebate-eligible Brand claims.

K. Mail order pricing (discounts, dispensing fees, and rebates) must apply to all claims that adjudicate at mail regardless of days' supply and without an aggregate average days’ supply requirement. Note that rebates only apply to rebate-eligible Brand claims.

L. Specialty pricing (discounts, dispensing fees, and rebates) must apply to all claims that adjudicate at the Contractor’s specialty pharmacy regardless of days' supply. Note that rebates only apply to rebate-eligible Brand claims.

M. Applicable specialty pricing (discounts, dispensing fees, and rebates) must apply to all specialty claims that adjudicate at participating retail pharmacies under the respective specialty pharmacy program regardless of days' supply. Note that rebates only apply to rebate-eligible Brand claims.

N. All Rebates must be guaranteed on a minimum (i.e., not fixed or flat) basis, and the Contractor shall pass through 100% of the Rebates, including non-specialty and specialty, from all pharmaceutical manufacturer revenue that that the Contractor has received to EBD.

O. Within ninety (90) days after the end of each quarter, the Contractor shall pay EBD the minimum Rebate guarantees and provide detailed reports listing the number of brand drugs per delivery channel, Rebate amount per brand drug at each delivery channel, and the resulting minimum guaranteed Rebate payment per delivery channel owed to EBD as well as the Rebates received by the Contractor for EBD 's utilization without a request being made by EBD.

P. The Contractor shall pay lag Rebates to EBD throughout the term of the contract until 100% of all earned Rebates are paid even after all the minimum Rebate guarantees have been paid.

Q. The Contractor shall pay all Rebate revenue earned by EBD to EBD regardless of its termination status as a client. The Contractor shall continue to pay lag Rebates on claims incurred prior to the termination date must continue to be paid to EBD after termination until 100% of earned Rebates are paid.

R. All pricing must be effective and guaranteed for the term of the resulting contract and must not include adjustments for claims volume changes or claims volume shifts amongst the various provider channels (e.g., mail utilization rates decline or 90-day retail utilization increases).

S. All pricing must be effective and guaranteed for the term of the resulting contract and must not be modified or amended if Plan's membership decreases by less than 30%.

T. The proposed pricing must not be part of a coalition pricing arrangement.

U. The Contractor shall not exclude products subject to patent actions from the financial discount, dispensing fee, and Rebate guarantees.

1.11 PRICING GUARANTEES

A. The Contractor shall use Medi-Span as the drug type designation/classification and pricing source unless otherwise approved by EBD.

B. The Contractor shall use Medi-Span MONY Multi-Source Indicators to indicate generic drugs with a “Y” and brand-name drugs with either an “O,” “M,” or “N.”

C. The Contractor shall calculate guarantees using the date sensitive AWP based on the 11-digit NDC of the actual product and actual package size that is dispensed.

D. The Contractor shall agree that the generic guarantee is an all-inclusive generic guarantee including single-source generics.

E. The Contractor shall include drugs with an “Insufficient Supply” in the proposed guarantees.

F. The Contractor shall include select, sole source, or authorized generics from at least one FDA-approved generic manufacturer with exclusivity, limited supply, limited availability, or limited competition in the generic pricing guarantees and excluded from the brand pricing guarantees.

G. The Contractor shall not include single-source generics or generic drugs in the brand drug Component for the annual discount guarantee reconciliation.

H. The Contractor shall include House Generics or brand claims with a DAW code in the generic guarantee financial reconciliation calculations and generic dispensing ration (GDR) guarantee calculations.

I. The Contractor shall calculate the House Generics or DAW 5 claims AWP that will be used in the generic guarantee financial reconciliation calculations and GDR guarantee calculations.

J. The Contractor shall include House Generics or brand claims with DAW 5 as brands in the minimum Rebate guarantee calculations.

K. The Contractor shall pass through 100% of all rebates derived from House Generics or DAW 5 claims to EBD.

1. EBD will not pay more for any House Generics or DAW 5 claims compared to the respective generic equivalent before the application of Rebates.

L. The Contractor shall adjudicate House Generics or brand claims with DAW 5 at the generic member copay regardless of whether the doctor checks off a DAW on the prescription.

M. The Contractor shall include brands with a DAW code (DAW 1 or DAW 2) requiring the substitution of a brand product over a generic product in the brand discount guarantees, dispensing fees, and minimum Rebate guarantees.

N. The Contractor shall include formulary excluded brand products that were adjudicated as a result of an exception process such as for medical necessity in the discount, dispensing fee, minimum Rebate guarantees, and any Rebates associated with such drugs will be passed through at 100% to EBD.

O. The Contractor shall not use penalty amounts paid by the member as a result of the DAW 1 or 2 penalty program in discount guarantee reconciliations.

P. The Contractor shall include all multi-source brand claims in the minimum Rebate guarantee calculations.

Q. The Contractor shall base Member Cost Share at the point-of-sale (for retail and mail) the lowest of the Plan copay/coinsurance, usual and customary charges, negotiated discounted ingredient cost plus dispensing fee or retail cash price.

R. The Contractor shall ensure that members always pay the lowest price—member cost share, discounted ingredient cost plus dispensing fee, Maximum Allowable Cost (MAC), Usual & Customary—and that members never pay a full copayment in instances where the Plan copay is greater than the discounted cost plus dispensing fee plus any sales taxes.

S. The Contractor shall calculate all guarantees before the application of member cost share.

T. The Contractor shall provide proposed dispensing fee guarantees on a maximum guaranteed basis.

U. The Contractor must include Specialty LDDs that are dispensed at the PBM’s Specialty Pharmacy in the PBM’s Specialty Pharmacy Overall Effective Discount guarantees and Dispensing Fee guarantees.

V. The Contractor must include Specialty LDDs that are dispensed at participating pharmacies or non- PBM-affiliated Specialty pharmacies in the participating Specialty Pharmacy Overall Effective Discount guarantees and Dispensing Fee guarantees.

W. The Contractor must include non-Specialty LDDs that the PBM has access to and are dispensed at a participating retail pharmacy in the respective retail network Overall Effective Discount guarantees and Dispensing Fee guarantees.

X. The Contractor’s proposal may be rejected if LDDs that the PBM does not have access to and are dispensed at a participating retail pharmacy are not included in the respective retail network Overall Effective Discount guarantees and Dispensing Fee guarantees.

Y. The Contractor must include Specialty LDDs that the PBM has access to and does not have access to in the Specialty minimum rebate guarantees.

Z. The Contractor shall not classify drugs as “New to Market” for more than six months from approval by the Federal Drug Administration. The Contractor shall include a specialty drug, limited distribution drug, and biosimilar in the respective discount and dispensing fee guarantees once it is no longer classified as “New to Market.”

1.12 ACCEPTANCE OF REQUIREMENTS

A. Unless a Prospective Contractor expressly and conspicuously identifies any exception or exceptions to any of the Requirements in the Requirements Section(s) of this RFP by listing them on the Exceptions Form (see S000000161 Technical Proposal Packet), Prospective Contractor understands and agrees its submission of a proposal to represent that its proposal meets all such Requirements.

B. A Prospective Contractor’s proposal may be rejected if a Prospective Contractor takes exception to any Requirements in the Requirements Section(s) of this RFP. However, taking exceptions to these requirements may not automatically cause the Prospective Contract’s proposal to be rejected.

1.13 ADDITIONAL TERMS AND CONDITIONS

A. This RFP incorporates all of the Solicitation Terms and Conditions located on the TSS OSP website found at transform.ar.gov.

1. Any special terms and conditions included in this solicitation shall override the Solicitation Terms and Conditions.

B. Unless a Prospective Contractor expressly and conspicuously identifies any exception or exceptions to any of the terms in the Services Contract (SRV-1) Fillable Form (found here) by listing them on the Exceptions Form (see S000000161 Technical Proposal Packet), Prospective Contractor agrees and shall adhere to all terms if selected as the successful Contractor.

1. Items identified as non-negotiable may only be modified if the legal requirement is satisfied and approved by the State.

C. A Prospective Contractor’s proposal may be rejected if a Prospective Contractor takes exception to any terms or conditions in the documents listed in Sections 1.13.A and 1.13.B. However, taking exceptions to terms and conditions may not automatically cause the Prospective Contract’s proposal to be rejected.

https://www.transform.ar.gov/wp-content/uploads/2021/12/MASTER-Solicitation-Terms-and-Conditions-11-29-21.pdf https://www.transform.ar.gov/wp-content/uploads/2021/08/Services-Contract-SRV-1-Fillable-Form-V.2.pdf

SECTION 2 – REQUIREMENTS

• Do not provide responses to items in this section unless specifically and expressly required.

2.1 PURPOSE

The Office of State Procurement, on behalf of the Department of Transformation and Shared Services-Employee Benefits Division (EBD) is seeking proposals and pricing for the following services to be provided by a Pharmacy Benefit Manager (PBM):

• Electronic drug claims processing

• Rebate Contracting and Administration

• Comprehensive Pharmacy Network and Provider Relations

• Pharmacy auditing program

• Mail order program

• Specialty pharmacy program

• Accumulator coordination with medical carriers

• Online and interactive formulary information for Plan participants

• Historic and ongoing Medicare Retiree Drug Subsidy (RDS) services

• Benefit Administration (programming)

• Formulary Management and Utilization Management– partner with EBD’s clinical consultant for formulary updates and utilization management criteria

• Copay Assistance and Maximizer program facilitation

2.2 CURRENT ENVIRONMENT

EBD currently covers approximately 135,000 employees, retirees, and dependents under ARBenefits, its self-funded health insurance plan, that collectively represents two (2) distinct groups—the Public School Employees (PSE) group and the Arkansas State Employees (ASE) group. The current plan design includes:

• A four-tier formulary for generic, preferred brand, non-preferred brand, and specialty ($15/$40/$80/$100) for the traditional Point of Service (POS) plan for State and public-school employees

• Two Health Savings Account (HSA) qualified High Deductible Preferred Provider Organization (PPO) plans for State and public-school employees

• Prior Authorization (PA) of some medications

• Quantity Limits (QL)

• Daily Dose Edits that are intended to prevent waste and unnecessary costs

• Daily Dose Edits to eliminate inappropriate utilization of medications intended for once daily use

• Reference Pricing (RP)

• Step-Therapy (ST), a method of encouraging the use of lower cost, but therapeutically effective alternatives to new and potentially more expensive drugs

• No incentive for mail order or for multiple month supply for maintenance medications

EBD currently has a broad retail network in place through its current PBM relationship with MedImpact and is seeking a similar broad retail network for its upcoming contract. EBD also currently has MedImpact’s Choice 90 retail program that allows a member to obtain a 32-93 days' supply maintenance prescription at retail pharmacies and pay the applicable copay.

EBD uses its Custom Formulary with exclusions and has customized the formulary based on discussions with EBD’s Clinical Consultants. Currently, the University of Arkansas for Medical Sciences (UAMS) Evidence—Based Prescription Drug Program (EBRx) establishes and maintains the custom formulary.

EBD also has a Custom Specialty Network that allows members to fill their specialty prescriptions at participating retail pharmacies.

In addition to managing the Custom Formulary, the Clinical Consultant administers a copay assistance program that includes copay maximization. The Clinical Consultant reviews each specialty drug prior authorization request and, if approved, routes the prescription through a specialty pharmacy network and makes member-specific cost share adjustments in the pharmacy benefit manager’s system.

2.3 OBJECTIVE AND GOALS

EBD is seeking a PBM that will provide the most advantageous formulary. In order to evaluate the most advantageous proposal, EBD seeks Prospective Contractors to submit a proposed formulary based on the Contractor’s lowest net cost formulary (post rebates, fees and member cost share). Such formulary should be designed based on the ability of EBD to make edits or adjustments to this formulary as EBD sees fit based on the EBD’s discussions with the Contractor and EBD’s Clinical Consultants. EBD is seeking a PBM with a similar lowest net-cost focused formulary with drug exclusions that allows prior authorization for medical necessity and does not cover high-cost and low value drugs.

EBD’s goal is to eliminate the potential for formulary disruption if a PBM transition were to occur. The PBM is required to quote all pricing guarantees (discounts, dispensing fees, and rebates) based on the utilization within the claims data and the Preferred Drug List as shown in the link below.

Contractor must Grandfather all ongoing prescriptions for the six (6) month period from July 1, 2023 through December 31, 2023. Grandfathering shall entail continuing to dispense, adjudicate, and assign cost sharing to the patient’s medication based on how the medication processed under the existing PBM.

The Grandfathering shall take precedence regardless of the medications position on Contractor’s proposed formulary. Beginning January 1, 2024 through the remainder of the Contract Term, the Grandfathering period will be over. As of January 1, 2024, previously grandfathered members can be transitioned onto the Contractor’s proposed formulary options. The discounts, dispensing fees, and rebates proposed in this Solicitation must be reflective of this Grandfathering period.

Currently, the Plan is using Reference Based Pricing for select products. Reference Based Pricing is not a requirement under this RFP. Prospective Contractors are encouraged to review the following:

A. The Plan’s Summary Plan Document (https://www.transform.ar.gov/wp-content/uploads/2022/04/ARBenefits-2022-Plan-Document-Executed.pdf), B. The current Preferred Drug List (https://www.transform.ar.gov/wp-content/uploads/2022/01/January- Preferred-Drug-List.pdf), C. The current list of exclusions (Attachment B: List of Exclusions) in order to propose the lowest net-cost formulary using the Plan’s similar lowest net-cost philosophy.

2.4 PROSPECTIVE CONTRACTOR MINIMUM QUALIFICATIONS

A. The Prospective Contractor shall possess and maintain all licenses, certifications, or registrations required by State and federal laws, rules, and regulations for the services to be provided under any resulting contract.

B. The Prospective Contractor shall be authorized by CMS to provide services as required in this RFP.

https://www.transform.ar.gov/wp-content/uploads/2022/04/ARBenefits-2022-Plan-Document-Executed.pdf https://www.transform.ar.gov/wp-content/uploads/2022/04/ARBenefits-2022-Plan-Document-Executed.pdf https://www.transform.ar.gov/wp-content/uploads/2022/01/January-Preferred-Drug-List.pdf https://www.transform.ar.gov/wp-content/uploads/2022/01/January-Preferred-Drug-List.pdf

C. The Prospective Contractor shall have at least ten (10) years of experience in providing prescription drug benefit plan services, including claims administration and retail pharmacy network services, to at least two (2) public sector groups with more than 10,000 covered lives each.

D. The Prospective Contractor shall have at least one (1) million covered lives across its pharmacy benefit management book of business.

E. The Prospective Contractor shall own at least ninety percent (90%) of their network retail pharmacy contracts.

2.5 GENERAL REQUIREMENTS

A. The Contractor shall submit a proposed formulary based on the Contractor’s lowest net cost formulary (post rebates, fees and member cost share). Such formulary shall be designed based on the ability of EBD to make edits or adjustments to this formulary as EBD sees fit based on the EBD’s discussions with the Contractor and EBD’s Clinical Consultants.

B. The Contractor must Grandfather all ongoing prescriptions for the six (6) month period from July 1, 2023 through December 31, 2023. Grandfathering shall entail continuing to dispense, adjudicate, and assign cost sharing to the patient’s medication based on how the medication processed under the existing PBM. The Grandfathering shall take precedence regardless of the medications position on Contractor’s proposed formulary. Beginning January 1, 2024 through the remainder of the Contract Term, the Grandfathering period will be over. As of January 1, 2024, previously grandfathered members can be transitioned onto the Contractor’s proposed formulary options. The discounts, dispensing fees, and rebates proposed in this Solicitation must be reflective of this Grandfathering period.

C. The Contractor shall propose, implement, and administer a benefit design that matches or exceeds the current benefits design.

D. The Contractor’s proposal for a Lowest Net Cost Formulary Design shall provide a lowest net-cost focused formulary with drug exclusions that allows prior authorization for medical necessity and does not cover high-cost and low value drugs.

E. The Contractor shall sign and adhere to all requirements contained in the Business Associate Agreement (BAA).

F. The Contractor shall maintain professional liability (errors and omissions) insurance and general liability insurance in amounts reasonable and customary for the nature and scope of PBM services.

The Contractor shall provide evidence of such insurance upon EBD’s request.

G. The Contractor shall maintain all licenses necessary to do business in the State of Arkansas and to perform the services required under a resulting contract.

H. The Contractor shall accept liability for any mistakes, errors, or omissions it makes in providing services to EBD and its members.

I. The Contractor shall notify EBD immediately upon identification of significant issues that cause member and/or provider disruption.

J. The Contractor shall not render or administer services offshore, and all work performed by the Contractor and its sub-contractors under a resulting contract must occur within the contiguous United States.

K. The Contractor shall notify EBD within thirty (30) days after purchase, acquisition, and all other changes in ownership, partners, or control affecting 10% or greater interest; any acquisition by it of 10% or greater interest in any subsidiary; and any new agreement with, by, or between any affiliates that is relevant to the contract.

L. The Contractor shall be responsible for payment of any fines levied against EBD by CMS because of an action or omission by the Contractor that incurred the citation.

M. The Contractor shall maintain fidelity and surety insurance or bond coverage to protect EBD in the event of a loss.

N. The Contractor shall maintain processes to prevent and detect internal and external fraud and fraudulent practices that must include screening for potential fraud and systematically review provider claims.

1. The Contractor shall report all fraud findings and relevant corrective measures to EBD.

O. The Contractor shall keep all EBD information disclosed during the proposal and contract term strictly confidential unless disclosure is required by law.

P. The Contractor shall submit All-Payer Claims Database (APCD) reporting to the state of Arkansas on behalf of the Plan in accordance with Arkansas law and APCD format and frequency requirements.

The Plan is a “submitting entity” for the purpose of such APCD reporting and the Contractor will report such information as the vendor of the Plan. The Contractor will not be acting as the “submitting entity” for the purposes of APCD.

Q. The Contractor shall comply with all relevant CMS, federal and state laws, rules, and regulations, including but not limited to:

1. Health Insurance Portability and Accountability Act of 1996 (HIPAA)

2. Patient Protection and Affordable Care Act (PPACA)

a. The Contractor shall provide programming or other administrative costs to meet any existing or future requirements of the Patient Protection and Affordable Care Act.

3. Federal law and regulations concerning surprise billing and transparency for pharmacy services

4. Federal No Surprises Act and Final Transparency Rule

a. The Contractor shall not consent to prohibitions of pricing disclosures (gag clause) prohibited under the No Surprises Act.

b. The Contractor shall prepare an internet-based self-service tool that makes real time cost-sharing information concerning covered prescription drug items and services in accordance available to plan participants with the federal Transparency rules.

R. The Contractor shall provide EBD and its Clinical Consultant with access to the Contractor’s reporting and adjudication system for the purposes of carrying out this Agreement.

2.6 IMPLEMENTATION REQUIREMENTS

A. During Discussions, the Prospective Contractor shall propose a PBM Implementation Plan that must address all Requirements specified in this subsection and that must include all elements of the proposed plan, including, without limitation, the implementation team, complete implementation and project schedules, benefit adjudication and claims system testing processes, deliverables, milestones, reporting, which party is responsible for which tasks, and issue escalation processes.

B. The Contractor shall ensure the services required by this RFP are fully implemented by July 1, 2023, unless otherwise specified by EBD.

C. The Contractor shall develop and implement a member communication plan, including development and assistance to EBD.

1. The Contractor shall bear the cost of printing communications to members as a part of the communication plan.

D. The Contractor shall test all systems and processes to ensure they are fully functional prior to July 1, 2023.

E. The Contractor shall load all current prior authorizations, open mail order refills, specialty transfer files, claim history files, and accumulator files that exist for current members from the existing PBM.

F. The Contractor shall waive charges to EBD and EBD 's medical plan claims administrators such as a set-up fee, a programming fee, or a monthly fee, for establishing a connection with a Third-Party Administrator or Claims processor for real-time, bidirectional data integration, including non-standard data integration format.

G. The Contractor shall complete and bear the cost of readiness assessments to the satisfaction of

EBD.

H. At EBD’s request, the Contractor shall allow EBD and its designees full access to test the functionality of all systems and processes during implementation.

I. At EBD’s request, the Contractor shall bear the cost of or provide a financial credit for a third-party auditor selected by EBD to complete all pre-implementation audits required by EBD.

J. Contractor shall pay any cost associated with EBD’s Rx BIN and Rx PCN numbers.

2.7 TRANSPARENCY REQUIREMENTS

A. Within thirty (30) calendar days of the end of each quarter, the Contractor shall reconcile all Rebates paid and owed to confirm EBD is receiving all Rebates owed.

B. The Contractor shall ensure EBD receives the greater of 100% Rebates collected by the Contractor or the Rebate Guarantee as provided under the resulting contract.

2.8 PASS THROUGH REQUIREMENTS

A. The Contractor shall pass through 100% of all pharmaceutical manufacturer revenue earned to EBD.

1. The Contractor shall disclose details of all other programs and services generating financial remuneration from outside entities, including manufacturers and retailers.

2. The Contractor shall confirm all revenue is verifiable and auditable.

B. The Contractor shall pass through 100% of Manufacturer Administrative Fees paid by manufacturers to the Contractor in relation to the Plan’s non-specialty, specialty and overall utilization to EBD.

C. The Contractor shall pass through 100% of Inflation Protection Payments paid by pharmaceutical manufacturers to the Contractor in relation to the Plan’s utilization to EBD.

D. The Contractor shall pass through 100% of Rebates invoiced and collected from pharmaceutical manufacturers/Rebate aggregators for excluded products that are not included in the Rebate and financial guarantee calculations to EBD.

E. The Contractor shall pay participating pharmacies at the pass-through rate.

2.9 PBM MANAGEMENT

A. During Discussions, the Prospective Contractor shall propose a PBM Management Plan that must address all Requirements specified in this subsection and that must include all elements of the proposed plan, including, without limitation, the Plan management team, deliverables, milestones, which party is responsible for which tasks, and an issue escalation processes.

B. The Contractor shall provide designated account resources including, but not limited to, an implementation manager, strategic account executive, clinical director, pharmacist, account manager, claims advocate, and underwriter/financial analyst.

C. All employees assigned to work on the EBD account shall be appropriately licensed, certified, and trained to perform their assigned duties.

D. At minimum, the Contractor shall provide a dedicated, toll-free telephone help line to EBD and to members twenty-four hours a day, seven days a week.

1. Member service staff shall be English-speaking and fully trained to respond to calls.

2. Toll-free telephone help line must provide features for the hearing impaired and resources to assist non-English speaking callers.

E. The Contractor shall perform all customer service operations requiring verbal communication with EBD and the Plan's members in the United States (i.e., will not be provided offshore).

F. The Contractor shall create, maintain, and transmit data feeds to effectuate the terms of a resulting contract, including, but not limited to, daily claims files, daily accumulator files to medical contractor.

G. The Contractor shall provide weekly and monthly data transmissions (may include feeds to data warehouses) to at least ten (10) chosen vendors at no charge and two (2) additional full, annual electronic claims files, in NCPDP format, as requested by EBD.

H. The Contractor shall interact/exchange data with all vendors as specified by EBD.

I. The Contractor shall provide postage for all required mailings.

J. The Contractor shall provide postage paid mail order envelopes for member prescription submission.

K. The Contractor shall provide a plan-specific website and mobile application for members to access plan specific information.

1. The website must comply with all state, federal, HIPAA, and CMS laws, rules, and regulations.

L. The Contractor shall notify EBD and the impacted members to all breaches and shall provide required remedies in the event of a privacy violation or data breach.

M. The Contractor shall maintain an escalation process for member satisfaction and complaints.

N. The Contractor shall maintain an escalation process for urgent drug claim issues where claims are rejecting at the pharmacy and members need immediate assistance and resolution, (before the member leaves the pharmacy).

2.10 COMMUNICATIONS AND OUTREACH REQUIREMENTS

A. During Discussions, the Prospective Contractor shall propose a PBM Communications and Outreach

Plan that must address all Requirements specified in this subsection.

B. The Contractor shall develop and implement communication plans and materials for the Plan.

C. The Contractor shall provide an opportunity for EBD to review and approve all communication materials (including letters, brochures, electronic, website, etc.) prior to being sent to members and providers.

D. The Contractor shall effectively communicate with and educate EBD’s members about programs and services available to them.

2.11 CLAIMS PROCESSING REQUIREMENTS

A. During Discussions, the Prospective Contractor shall propose a PBM Claims Processing Plan that must address all Requirements specified in this subsection.

B. The Contractor’s claims processing system must fully integrate with the eligibility and member services system.

C. The Contractor shall provide claims processing from date of receipt to full adjudication of checks to providers or patients.

D. The Contractor shall ensure that prescription drug benefits or program changes that have the potential to create member disruption and provider payment issues are made timely and accurately.

E. The Contractor shall provide proper quality control testing for prescription drug benefit and/or program changes (e.g. codes and/or fee schedule updates) prior to live release.

F. The Contractor shall assist EBD in responding to all Medicare and Medicaid subrogation claims.

G. The Contractor shall process paper claims.

H. The Contractor shall provide online, real time, claim system access to EBD or its designee, including access to historical claims data for up to three (3) years following termination of the resulting contract.

2.12 REPORTING REQUIREMENTS

A. During Discussions, the Prospective Contractor shall provide a PBM Reporting Plan that must address, at minimum, each of the Requirements in this subsection.

B. The Contractor shall create and generate standard…