STATE OF MISSISSIPPI RFP FOR PBM SERVICES 20241016.pdf

STATE OF MISSISSIPPI

STATE AND SCHOOL EMPLOYEES’

HEALTH INSURANCE MANAGEMENT

BOARD

Request for Proposal

Pharmacy Benefit Manager Services

October 16, 2024

Contact information for this request for proposal:

Pharmacy Benefit Manager Services RFP (RFx 3120003010) c/o MDFA Office of Insurance 501 North West Street Suite 1201-C Woolfolk Building Jackson, Mississippi 39201 InsuranceRFP@dfa.ms.gov mailto:InsuranceRFP@dfa.ms.gov

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TABLE OF CONTENTS

SECTION 1. INTRODUCTION

1.1 Background and Authority

1.2 Purpose and Goals

1.3 Definitions

SECTION 2. SCOPE OF SERVICES

2.1 Account Management

2.2 Pharmacy Benefit Manager Services

2.3 Data Management:

2.4 Claims and Performance Reviews:

2.5 Standard/Ad Hoc Reporting

2.6 Cooperation with Other Board Vendors

SECTION 3. MINIMUM VENDOR REQUIREMENTS

SECTION 4. PERFORMANCE STANDARDS

SECTION 5. STATEMENT OF COMPLIANCE AND EXCEPTION(S) FORM

SECTION 6. STATUTORY REQUIREMENT DISCLOSURE STATEMENT

SECTION 7. GENERAL QUESTIONNAIRE

SECTION 8. TECHNICAL QUESTIONNAIRE

8.1 Account Management

8.2 Pharmacy Benefit Manager Services

8.3 Implementation

8.4 Audit

8.5 Performance Standards

8.6 Federal No Surprises Act and Final Health Care Transparency Rule

SECTION 9. ADMINISTRATIVE COST AND NETWORK PROPOSAL

SECTION 10. RFP PROCESS OVERVIEW FOR VENDORS

10.1 Instructions to Vendors

10.2 Important Dates and Deadlines

10.3 Contact, Questions/Requests for Clarification, and Acknowledgment of Responses/RFP

Amendments

10.4 Corrections and Clarifications

10.5 Modification, Withdrawal, or Rejection of a Proposal

10.6 Right to Consider Historical Information

10.7 Right to Reject Proposals, Cancel and/or Issue Another RFP

10.8 Cost of Proposal Preparation/Expenses Incurred in the Procurement Process

10.9 Contract and Property Rights

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10.10 Registration with Mississippi Secretary of State

10.11 Vendor Investigations and Certifications

10.12 State Approval

10.13 Proposal Evaluation and Basis for Award

10.14 Post-Award Vendor Debriefing

10.15 Request for Reconsideration of the Terms of the Solicitation or the Intent to Award

10.16 Required Contract Terms and Conditions

10.17 Agency Website

10.18 Attachments

Appendix A 75 Draft Pharmacy Benefit Manager Services Contract

Appendix B 76 Pharmacy Benefit Manager Services Vendor Reports

Appendix C 77 Specialty Drug List and Guaranteed Discounts

Appendix D 78 Top 50 Pharmacies Utilized by Participants

Appendix E 79 Financial Requirements

Appendix F 80 Financial Offer

Appendix G 81 Specialty Pharmacy Offer

Appendix H 82 Claims and Trend Assumptions

Appendix I 83 Exclusions

Appendix J 84 Mfc. Coupon Programs

Appendix K 85 Administrative Ancillary Fees

Appendix L 86 Formulary Disruption Results

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SECTION 1. INTRODUCTION

1.1 Background and Authority

The State of Mississippi State and School Employees’ Health Insurance Management Board (Board) seeks a qualified, experienced vendor to provide prescription drug benefit management services to the State and School Employees’ Life and Health Insurance Plan (Plan). The Plan’s health insurance component is a self-insured, non-ERISA (Employee Retirement Income Security Act of 1974) health insurance plan, currently providing health insurance coverage to approximately 190,000 participants. Eligible participants in the Plan include active, retired, and Consolidated Omnibus Budget Reconciliation Act (COBRA) employees (and their enrolled dependents) of the State’s agencies, universities, community colleges, school districts, and public library systems. Plan participants are located primarily within Mississippi, although a small number of participants reside in other states. The 2024 Plan Document provides specific details of the Plan and is located on the Plan’s website at https://knowyourbenefits.dfa.ms.gov/publications/.

The Board desires to contract with a Pharmacy Benefit Manager (PBM) capable of providing a customized prescription drug benefit management services to a large, self-insured health plan, and has prior experience directly related to the services requested in this RFP. The required services are described in Request for Proposals (RFP) Section 2, Scope of Services.

The Plan currently offers options of Base Coverage or Select Coverage for active employees, COBRA participants, and non-Medicare eligible retirees. Each coverage type is independent of the other. Under Select Coverage prescriptions are subject to copayments after a $75 pharmacy deductible has been satisfied. The Base Coverage serves as a high deductible health plan in which pharmacy benefits are subject to copayments after the annual $1,800 deductible has been satisfied.

As of July 1, 2023, the Plan’s enrollment included 107,639 active employees with 51,615 dependents, 7,471 non-Medicare retirees with 2,007 dependents, and 579 COBRA participants with 311 dependents. The remaining 20,000+ Medicare primary participants and their dependents do not have pharmacy coverage provided by the Plan.

Blue Cross & Blue Shield of Mississippi (BCBSMS) is the current medical Third-Party Medical Claims Administrator (TPA) and has served in this capacity since 1998. The TPA collects and provides the PBM with eligibility data and accumulation data such as deductible and out-of-pocket data, etc. The TPA is responsible for processing medical claims and determining medical necessity guidelines for the Plan. CVS Caremark Pharmacy, Inc. is the current PBM and has served in this capacity since 2021. The Plan currently utilizes CVS Caremark Value Formulary which is a “closed” formulary. The Plan processed over $283 million in 2019 prescription drug charges on approximately 3.3 million claims in 2019. The Plan has a generic utilization rate of approximately 88.2%. Mail order currently represents less than 2% of claims.

The Board’s current PBM services contract is scheduled to expire on December 31, 2025, necessitating the need for this RFP. The effective date for this contract will be January 1, 2026.

Implementation and/or transition services provided by the selected vendor prior to July 1, 2025, are not compensable; as such, any costs incurred by the Vendor prior to January 1, 2026 may not be invoiced to the Board.

The Mississippi Department of Finance and Administration’s (MDFA) Office of Insurance (OI) under the direction of the State Insurance Administrator is responsible for the management and https://knowyourbenefits.dfa.ms.gov/publications/

Pharmacy Benefit Manager Services RFP – 2024 Page 5 of 86 administration of the Plan and provides administrative support to the Board and is coordinating this RFP with assistance from its consultant, Gallagher Benefit Services, Inc. The Board seeks to enter into a multi-term, fixed price, indefinite quantity contract for the aforementioned services. A draft contract has been included as Appendix A of this RFP for your review and comment. This RFP, any amendment thereto, such as Questions and Answer document(s), if any were issued, as well as the awarded vendor’s proposal(s), and any requested best and final offer shall constitute the Contract. The Contract will be for five (5) years. This solicitation and any resulting contract shall be governed by the applicable provisions of the Mississippi Public Procurement Review Board (PPRB) Office of Personal Service Contract Review (OPSCR) Rules and Regulations, a copy of which is available on the Mississippi Department of Finance and Administration’s website (www.dfa.ms.gov). Any vendor responding to a solicitation for personal and professional services and any contractor doing business with a state agency is deemed to be on notice of all requirements therein.

A copy of this RFP, including any subsequent amendments, along with a copy of all questions from vendors and responses to those questions, will be posted on MDFA’s website under the heading “Solicitations” at https://www.dfa.ms.gov/bids-and-rfps-notices. Before the award of any contract, the Vendor will be required to document to the Board that it has the necessary capabilities to provide the services specified in this RFP. The Vendor may also be required to provide additional client references, as well as related project experience detail, for OI to determine if the Vendor is qualified. The OI may make reasonable investigations, as it deems necessary and proper, to determine the ability of the Vendor to perform the work, and vendor shall be required to furnish all information that may be requested for this purpose. The OI reserves the right to reject any proposal if the Vendor fails to provide the requested information and/or fails to demonstrate the Vendor is properly qualified to carry out the obligations of the Contract and to complete the work described within this RFP.

1.2 Purpose and Goals

The purpose of this solicitation is to contract with a firm to provide pharmacy benefit management services including network pharmaceutical pricing through financial arrangements with pharmacies. The pharmacy network provided by the PBM must contain a sufficient number of pharmacies to provide all participants adequate access, in-state as well as out-of-state, as determined cooperatively by the PBM and the Board. The pharmacy network will provide the Plan with a cost-effective network of pharmacies contracted at rates that are commensurate with the size of the Plan and its associated purchasing power. The PBM will provide clinical programs cost containment such as prior authorization, step therapy and specialty drug management, and a mail order distribution channel. The Board expects the PBM to be proactive in making recommendations that control costs.

The Board’s goal is to partner with a PBM to serve as a fiduciary to provide a well-managed customizable formulary which provides access for our participants to clinically effective Food and Drug Administration or FDA-approved drugs at the lowest net cost and to exclude any drugs with proven low efficacy rates and high-cost drugs when lower cost clinically effective drugs are available. The Board prefers to exclude overpriced drugs which are simply reformulations of lower cost drugs or combinations. The PBM must provide a fully transparent/pass-through financial pricing arrangement with the Board. “Transparency” refers to financial arrangements which represent a direct and complete pass-through of all financial transactions. The Board must receive http://www.dfa.ms.gov/ https://www.dfa.ms.gov/bids-and-rfps-notices

Pharmacy Benefit Manager Services RFP – 2024 Page 6 of 86 the full and complete amount of any discounts and rebates received by the PBM from any and all retail pharmacies, and manufacturer rebates. The PBM will not retain a differential between the amount reimbursed to the PBM by the Board for each transaction and the payments made to the retail pharmacies by the PBM or rebates. (See rebates definition in RFP Section 1.3, Definitions.)

The only compensation the PBM will receive from or on behalf of the Board, for the services described in this proposal or any subsequent contract, shall be the PBM’s quoted administrative fees listed in the PBM’s proposal, or agreed upon in writing through subsequent discussion with the Board.

1.3 Definitions

1.3.1. “Aggregator" means the company that helps manage the complex world of formulary and rebate management for pharmacy benefit managers (PBMs), health plans, and employer groups. These aggregators are often PBM owned or affiliated.

1.3.2. “Allowable Charge” means the lesser of the amount payable under the terms of the pharmacy’s contract with the PBM for a covered drug or the cash price inclusive of all applicable customer discounts which a cash paying customer of the pharmacy pays for a covered drug.

1.3.3. “AWP” means the “average wholesale price” for a standard package size of a prescription drug from the most current pricing information provided to PBM by Medi-Span Prescription Pricing Guide, or following approval by the Board, any other nationally available reporting service of pharmaceutical prices as utilized by PBM as a pricing source for prescription drug pricing. The AWP used is based on the date sensitive 11-digit national drug code (NDC) of the actual package size dispensed as set forth by Medi-Span on the date the claim is dispensed.

1.3.4. “Brand Name Drug” means drug that has a trade name and is protected by a patent. A brand name drug may only be produced and sold by the pharmaceutical company holding the patent or a pharmaceutical company that has been licensed and authorized by the patent holder to produce and sell the drug. Medi-Span Multi-Source Indicator will be used for calculating aggregate financial guarantees. For prescription drug claims processed where the underlying prescription drug product is identified having a multi-source indicator code identifier of “M”, “N”, or “O” on the date dispensed, the claim should be considered a Brand claim unless otherwise noted as an exclusion. Claims processed where the multi-source indicator is a “Y” on the date dispensed will be considered as Generic claims.

1.3.5. “Compound Drug” shall mean a formulation containing one or more “Drug Products”, which is extemporaneously weighed or measured then prepared by a pharmacy in accordance with a physician’s prescription order. A compound drug prescription meets the following criteria: two or more solid, semi-solid or liquid ingredients, at least one of which is a covered drug that is not commercially available. Compound drug claims will only be covered for drugs for which the compounded product is not commercially available.

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1.3.6. “Copayment” means that portion for a covered prescription which, under the terms of the Plan, is required to be paid by the participant directly to the pharmacy. The Employee will pay the lower of:

(i) the copayment, coinsurance or deductible;

(ii) the acquisition cost, plus dispensing fee; or

(iii) the pharmacy’s usual and customary charge for the drug product, MAC (maximum allowable cost) or retail cash price.

1.3.7. “Covered Service” means a prescription drug provided under the terms of this contract for which payment may be requested under terms of the Plan.

1.3.8. “Employee” means an eligible person who has satisfied the specifications of the Plan’s

Plan Document’s eligibility guidelines and has enrolled for coverage under the Plan. Unless otherwise, “Employee” refers to an active employee, a retired employee or a COBRA participant.

1.3.9. “Formulary” means the PBM’s Performance Drug List (PDL), which is a list of pharmaceutical products and supplies, quantity limits, prior authorization guidelines, and clinical guidelines detailing coverage of such products, created and maintained by the PBM, as amended from time to time, which: (a) has been approved by PBM’s pharmacy and therapeutics committee; (b) reflects the PBM’s recommendations as to which pharmaceutical products should be given favorable consideration by plans and their participants; (c) includes all standard clinical programs, including but not limited to prescribing guidelines such as prior authorization, step therapy, and quantity level limits, if elected by the Board; and (d) includes any custom request by the Board for addition or deletion of drugs at the sole discretion of the Board.

1.3.10. “Generic Drug” means a drug that is therapeutically equivalent (identical in strength, concentration, and dosage form) to a Brand Name Drug and that generally is made available when patent protection expires on the Brand Name Drug. The Board’s expectation is that Medi-Span Multi-Source Indicator will be used for calculating aggregate financial guarantees. For prescription drug claims processed where the underlying prescription drug product is identified having a multi-source indicator code identifier of “M”, “N”, or “O” on the date dispensed, the claim should be considered a Brand claim unless otherwise noted as an exclusion. Claims processed where the multi-source indicator is a “Y” on the date dispensed will be considered as Generic claims.

1.3.11. “Group Purchasing Organization” or “GPO” is an entity that is created to leverage the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the members. PBM-lead GPOs are organizations formed by PBMs with one or more members, whose primary purpose is to aggregate purchasing volume to negotiate discounts with biopharmaceutical manufacturers.

1.3.12. “Health Insurance Portability and Accountability Act” or “HIPAA” shall refer to the

Health Insurance Portability and Accountability Act of 1996, Public Law 104-191.

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1.3.13. “Health and Wellness Management Vendor” means the vendor that provides health and wellness management services to the Plan including, but not limited to, incentive management and wellness promotion management services and at the discretion of the Board may include disease management, maternity management, weight management, tobacco cessation, and a clinical improvement promotion program that includes four wellness coaches strategically located in Mississippi and an online portal, mobile app, and digital coaching.

1.3.14. “Limited Distribution Drugs” means specialty drugs which are distributed to either one

(1) or a very limited number of pharmacies, distributors or wholesalers.

1.3.15. “Maximum Allowable Cost” or “MAC” means the unit price that has been established by the PBM for a multi-source generic drug (i.e., a generic drug with more than two sources) included on the MAC drug list applicable to the Board, which list may be amended from time to time by the PBM in maintaining its generic pricing program. A copy of such MAC drug list shall be provided to the Board prior to execution of this contract and thereafter upon the Board’s reasonable request.

1.3.16. “Network Pharmacy” means a retail pharmacy, home delivery pharmacy, specialty pharmacy or other facility that is duly licensed to operate as a pharmacy and is owned or operated by the PBM (or an affiliate) or has entered into a Network Pharmacy Agreement.

1.3.17. “Paid Claims” means all transactions made on eligible participants that result in a payment to pharmacies or participants from the Plan or the Plan participant copayments. (Does not include reversals, rejected claims and adjustments.) Each unique prescription that results in payment shall be calculated separately as a paid claim.

1.3.18. “Participant” means an individual eligible to receive prescription drug services for which payment may be sought under the terms of the Plan.

1.3.19. “Participating Provider” means a pharmacy or pharmacist which has entered into a contract with the PBM to provide prescription drug services under this contract. All pharmacists employed by a Participating Provider are subject to all requirements imposed on Participating Providers under this Contract.

1.3.20. “Pharmacy Benefit Manager” or “PBM” means the entity that administers the prescription drug portion of the Plan. The PBM is expected to provide pharmacy claims processing, mail order pharmacy services, and other services, such as rebate administration, development and management of pharmacy networks, formulary management, drug utilization review programs, generic drug substitution, and disease management programs.

1.3.21. “Plan” means the self-insured Mississippi State and School Employees’ Health Insurance

Plan as defined in Mississippi Code Annotated § 25-15-1 et. seq.

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1.3.22. “Plan Document” means the document that states the benefits and eligibility terms of the Plan. The Plan Document is published and maintained by the Board. All benefits under the Plan are subject to the Plan Document. The 2024 Plan Document is available on the Plan’s website at https://knowyourbenefits.dfa.ms.gov/publications/.

1.3.23. “Rebate” means any compensation or remuneration of any kind received or recovered by the PBM, or any of its affiliates 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 mail order 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 that PBM, or any of its affiliates, receives from a pharmaceutical manufacturer for administrative costs, formulary placement, and/or access.

1.3.24. “Specialty Drug” means pharmaceutical products that are typically expensive and require special handling and monitoring such as patient training, care coordination, adherence monitoring. They can be administered orally or through injection, infusion, inhalation, or other non-oral methods. Many are biologically developed (biologics) and can be used to treat chronic, life threatening, and rare conditions.

1.3.25. “Specialty Pharmacy” means a contracted pharmacy providing Specialty Drugs, including any specialty pharmacies owned by the PBM.

1.3.26. “Third Party Claims Administrator” means the organization under contract to the Board responsible for processing all medical claims, other than claims for prescription drug services, received from participants.

1.3.27. “Usual and Customary” or “U&C” means the amount a Network Provider would charge to a cash paying customer for same strength, quantity, and dosage form of a covered drug, as of the date the prescription is filled.

1.3.28. “Utilization Management Vendor” means the vendor that provides utilization management services to the Plan including, but not limited to, hospital management services (hospital admission, pre-admission and post-discharge outreach, and case management), continued stay management, discharge planning, retrospective review, review of high-cost diagnostic procedures, and medical necessity review for specified medical services.

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SECTION 2. SCOPE OF SERVICES

This section contains information on services and procedures the selected vendor must provide, or adhere to, in servicing the Board’s account, either directly or through identified subcontractors. The descriptions are not all-inclusive but are provided to alert you to services or procedures that may require additional planning or programming on your part. The following is a list of services the Board expects the successful vendor to provide.

Please respond by restating each service listed below, including the number, and confirm your intention to provide the service as described by stating “Confirmed”. If your company can provide the service, but not exactly as described, respond by stating “Confirmed, but with exceptions”, and state the specific exceptions. If your company intends to provide a listed service through a subcontractor, respond, “Confirmed, service will be provided through subcontractor”, and name the subcontractor. If your company is currently unable to provide a listed service, respond by stating “Unable to provide this service”. Any additional details regarding these services should be provided in your responses to the questionnaire, or as additional information included as an appendix to your proposal.

The selected vendor is expected to provide the following services:

2.1 Account Management

2.1.1 Hire and maintain sufficient staff to meet the needs of the Board and the Plan’s participants.

2.1.2 Comply with staffing minimum requirements provided in RFP Section 3.2 through 3.3.

2.1.3 Maintain an adequate customer service staff to respond to inquiries from participants, providers, and MDFA staff regarding the services provided by the PBM through a toll-free telephone line. The service shall be available 24 hours, 7 days a week, other than scheduled maintenance times, to participants and providers. Currently, the Board’s pharmacy customer service center averages 4,300 calls per quarter.

2.1.4 Provide competent and proficient account management staff to promptly address and respond to any staffing concerns with MDFA.

2.1.5 Cooperate with the Board and with all other contractors of the Board with respect to the ongoing coordination and delivery of health care services, and in any transition of responsibilities.

2.1.6 Provide consultative services regarding pharmacy benefit design including, but not limited to, formularies, allowable charges, generic drug incentives, implementation of programs which control utilization and optimize health, utilization review services, and evaluation of drug use and cost data.

2.1.7 Participate in activities with the PBM and/or MDFA staff in responding to participant or provider inquiries or complaints relating to pharmacy benefit services.

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2.1.8 Conduct at least one (1) customer satisfaction survey within the third quarter of the initial contract period and one (1) annually thereafter. The contents of the satisfaction survey must be agreed upon by the Board and the PBM.

2.1.9 Participate, at its own expense, in health/benefit fairs to educate participants throughout the State.

2.1.10 All services directly related to this contract must be provided from an office located within the United States.

2.2 Pharmacy Benefit Manager Services

The PBM’s duties and responsibilities shall include, but are not limited to, the following:

2.2.1 Comply with mutually agreed service performance guarantees. Refer to RFP Section 4, Performance Standards, and Exhibit B, Performance Standards and Discount Guarantees, of the proposed contract.

2.2.2 Pharmacy Network Service:

a. The PBM is responsible for the delivery of quality prescription drug services to participants through discount arrangements or other financial contracts with participating pharmacies. The PBM must maintain a pharmacy re-credentialing process at least every three years or as otherwise required by URAC or CMS.

b. The PBM is required to maintain a separate credentialing process for specialty and compound pharmacies. The PBM is required to provide an open credentialing process for specialty network without unnecessary restrictions such as limited application period, licensed in at 50 states, etc.

c. The PBM is required to provide on-line access to a directory of participating pharmacies, including their names, addresses and telephone numbers. Participating pharmacy information must be regularly maintained and updated.

d. The PBM agrees to notify MDFA staff at least 60 days in advance regarding termination of a current pharmacy chain or independent pharmacy. PBM agrees to also notify impacted participants within 15 days of termination.

e. The PBM must include independent pharmacies in the proposed retail network and all guarantees proposed are inclusive of independent pharmacies.

2.2.3 Communication Materials/Forms:

The PBM, at its own cost, is responsible for designing, printing, and distributing brochures, preferred drug lists, and forms, cobranded, and with the Board’s approval, as necessary and required to establish and administer pharmacy services and programs. Communication materials/forms will be mailed to participants, employer units, and the Board.

2.2.4 Identification Cards:

The PBM, at its own cost, must provide routine distribution of ID cards, including printing, mailing, and postage. The PBM, at its own cost, will provide ID cards directly to the

Pharmacy Benefit Manager Services RFP – 2024 Page 12 of 86 participant’s home address for (1) the initial enrollment of the Plan, (2) future new enrollees, (3) participants who change coverage category (e.g. single to family), and (4) replacement of lost cards. Participants with single coverage should receive one (1) ID card;

participants with dependent coverage should receive at least two (2) ID cards. The information to be printed on each ID card will include, at a minimum, the participant’s name and identification number, Plan name, the PBM name and toll-free customer service telephone number.

2.2.5 Claims Processing Services:

a. The PBM’s claims processing services must include, at a minimum, verification of eligibility, review of claims in accordance with the Plan benefits, receipt, processing, adjustment, and authorization of claim payments and provision of claim forms.

b. The PBM must maintain, at a minimum, the following information for all claims:

participant name, participant identification number, patient name or other specific identifier, claim number, pharmacy number, pharmacy name, service date, mail/retail indicator, formulary flag, specialty indicator, ingredient cost, dispensing fee, sales tax amount, plan paid amount, copayment amount, NDC, and drug name.

c. The PBM must be able to accommodate multiple plan designs such as the Plan’s current Base Coverage and Select Coverage as described in the 2024 Plan Document (https://knowyourbenefits.dfa.ms.gov/publications/), and must be able to process claims with a deductible that is integrated with the medical plan deductible (i.e. Base Coverage).

d. The PBM must adjudicate all claims according to “lowest of” logic such that participants and the Plan pay the lowest cost of the contracted price or the pharmacy’s usual and customary amount (including the pharmacy’s sale price, if any). PBM will not be allowed to adjudicate claims based on ‘zero balance logic” or on a minimum copayment amount, and retail pharmacies will not be allowed to collect a minimum payment.

e. Any pharmaceutical provider tax is to be paid by the PBM.

2.2.6 Federal Reporting:

As required by Federal law, the PBM, after discussions and negotiations with the Board, will prepare and file reports required by the Federal Government.

2.2.7 Coordination of Benefits:

The PBM is responsible for providing coordination of benefits (COB) services. The TPA provides information regarding a participant’s COB status to the PBM. The PBM must reject primary payment for participants for whom the Plan is secondary and must provide for secondary payment of prescription drug claims submitted, either electronically or by submission of a hard copy claim form to be obtained from the PBM. Benefits for secondary claims, are based upon the allowable charge, less the amount paid by the primary carrier, less the applicable copayment for that prescription drug. Any additional cost for this service must be included in the financial proposal.

2.2.8 Quality Control:

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The PBM is responsible for quality control processes to regularly evaluate the performance and accuracy of the claims processing systems and the claims processing staff. Findings of quality control evaluations will be provided to the Board quarterly.

2.2.9 Appeal Resolution:

The PBM must provide an appeal process for claims partially or fully denied for payment upon the request of a participant or provider in accordance with guidelines outlined in the Plan Document at no extra cost to the Board. All appeal processing (e.g. first, second, and third/IRO level appeals) is to be provided by the PBM at no additional cost.

2.2.10 Prior Authorization Program:

The PBM must provide prior authorization services to promote cost management while ensuring that participants can access needed prescription drugs. The prior authorization program must use evidence-based guidelines and the latest clinical literature and outcomes data, as well as FDA guidelines. The PBM will advise the MDFA regarding those drugs for which the Plan may benefit by requiring prior authorization for coverage. The PBM's staff, under the supervision of clinical pharmacists, will review participant prescriptions for those drugs requiring prior authorization and/or medical necessity review in accordance with criteria, definitions and procedures developed by the PBM. The Board shall require prior authorization on drugs at its discretion.

2.2.11 Management Reporting:

The PBM must provide management reports, with content and in a format approved by the Board, at no additional charge. These reports will be provided, at the Board’s request, in a hard copy and/or electronic format. The PBM must provide assigned MDFA staff access to web-based reporting tools for management and other reports. The PBM shall have the capability of providing ad hoc reports at the Board's request.

2.2.12 Drug Utilization Review (DUR):

The PBM is required to provide a concurrent, prospective and retrospective DUR system to assist pharmacy providers in screening certain drug categories for clinically important potential drug therapy problems at the time the prescription is dispensed to the participant.

The DUR program must provide an evaluation of drug therapy before each prescription is filled by means of an online, real-time, electronic point-of-sale claims management system.

Evaluation must include, at a minimum, monitoring for therapeutic appropriateness, over-utilization and under-utilization, appropriate use of generic products, and screening for potential drug therapy problems due to therapeutic duplication, drug-disease contraindications, drug interactions, incorrect drug dosage or duration of drug treatment, physician profiling, and clinical abuse/misuse and, as necessary, introduce remedial strategies in order to improve the quality of care of the participant.

2.2.13 Step Therapy:

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The PBM is required to provide a step therapy program designed to optimize rational drug therapy while controlling costs by defining how and when a particular drug or drug class should be used based on a patient’s drug history.

2.2.14 Dosage Optimization:

The PBM is required to provide a dose optimization program designed to slow the rising cost of prescription drugs and help increase patient compliance with drug therapies. As part of the dose optimization program, the PBM must work with the participant, the health-care provider and pharmacist to replace multiple doses of lower strength drugs with a single dose of higher-strength drugs where appropriate.

2.2.15 Medication Adherence Program:

The PBM is required to provide a comprehensive pharmacy care program to improve medication adherence for participants with chronic conditions. As part of the medication adherence program, the PBM will provide telephonic coaching that will involve calls to participants from a health educator who is specially trained in chronic conditions. The calls will involve coaching participants on behavioral reinforcement strategies that will help them to continue taking their medications on schedule; calls will also include specially tailored education for the chronic condition. Doctors will receive written educational information on the rates of medication adherence, implications of non-adherence, and methods for improving adherence. Doctors will also receive alerts on participants who are not filling their medication prescriptions.

2.2.16 Quantity Limits:

The PBM is required to provide a limitation program for drugs which are indicated only for a specific therapeutic period or are limited to certain amounts. If, based on on-line adjudication, the quantity of a covered drug is not approved by the PBM, the prescribing physician must be allowed to contact the PBM for prior approval of additional quantities based on documentation of medical necessity.

2.2.17 Early Refill:

The PBM is required to process requests from participants, pharmacists, and providers for early refills or advance supplies of a medication due to vacations, dosage changes, or for lost or destroyed medication according to allowance per plan design.

2.2.18 Website:

The PBM will develop and maintain a searchable public website that is accessible to participants and providers. The website contains at a minimum:

a. A current provider directory

b. Ability to conduct a zip-code based pharmacy proximity search

c. Claim forms (Participant submitted paper claim forms) for both primary and secondary coverage

d. On-line mail order refill capabilities

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e. Mail order forms

f. Formulary or preferred drug list

g. Total Drug Cost (participant and Plan payment) as well as alternative drug price check functionality

h. Research drug interactions, side effects, and risks of drugs

i. Determine the availability of generic substitutions

j. Health/wellness information

2.2.19 Field and Desk Audits:

The PBM shall conduct regular pharmacy field and desk audit services and the PBM must provide quarterly reports of audit activities and findings. Any errors will be addressed and corrected in a timely manner by the PBM. Any amounts recovered due to a field or desk audit will be 100% refunded to the Board no more than 45 days of the finding. The PBM is required to notify the Board of any provider termination resulting from an audit along with the reason for termination.

2.2.20 Specialty Medication and Supplies:

a. The PBM is required to provide an open Specialty Network for prescription fulfillment and distribution of specialty medications and supplies, pharmaceutical care management services, customer service, utilization and clinical management, integrated reporting, and claims processing. The specialty medication program must include, at a minimum, patient profiling focusing on the appropriateness of specialty medication therapy and care, and the prevention of drug interactions. The program must also include patient education materials, patient monitoring, adherence programs, and compliance programs. Programs such as drug utilization review, drug limitation (step therapy, quantity and supply limits) and prior authorization services must be extended to the specialty medication program. Channel distribution (retail, specialty, mail pharmacy) must be optimized for plan and participant savings.

b. The Specialty Network must open and comply with the State’s “any willing provider” statutory requirements (Section 83.9.6 subs 3(b)). Note: An exclusive central fill distribution channel is not acceptable.

c. Specialty medications must be deliverable to the participant’s residence or the participant’s physician’s office. The PBM must provide to participants a toll-free telephone access to a registered nurse, pharmacist, or patient care coordinator (as appropriate) twenty-four (24) hours per day, seven (7) days per week.

d. The Specialty Pharmacies must be properly licensed, certified or credentialed to operate in the applicable states where dispensing specialty operations reside.

e. The Specialty Pharmacies must collect copayments for specialty mail order services with no balance billing of unpaid copayments allowed.

f. The PBM must provide an overall specialty discount guarantee for those drugs dispensed through the exclusive specialty drug program in addition to a claim by claim, the greater of will apply.

g. The PBM agrees during the life of the contract no new therapeutic classes will be added to the specialty drug list without written consent of the State.

h. The PBM will adjudicate all specialty claims at the lesser of: (a) the contracted discount plus dispensing fee or (b) MAC plus dispensing fee.

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i. The PBM will guarantee Retail/Specialty unit cost equalization meaning that Specialty unit costs for medications dispensed at non-retail specialty pharmacies prior to participant cost sharing, and dispensing fees will be no greater than the unit cost for the same NDC-11 at Retail.

j. The PBM will produce a date-sensitive comparison report showing unit costs charged to the State at a GCN-level and reimburse the State on a dollar-for-dollar basis for all instances where Specialty unit costs exceed retail unit's costs. Report and reconciliation will be provided on a quarterly basis, without a request being made by the State.

k. The Board may add or remove a drug from the specialty list at its sole discretion.

2.2.21 Mail Order Services:

a. The PBM must make available a mail order prescription drug program to process and dispense covered prescription drugs. Programs such as drug utilization review, drug limitation, and prior authorization services must be applied to mail order services and must be consistent with the retail channel.

b. The PBM’s mail order service must provide to participants toll free telephone access to a pharmacist and customer service representative twenty-four (24) hours per day, seven (7) days per week.

c. The PBM will guarantee that discounts provided on mail order claims should meet or exceed those of retail.

d. In no event shall the cost of mail order medications (Plan or participant cost) be more than retail. Mail order is expected to save the Plan and will be monitored accordingly.

2.2.22 Individual Utilization Tracking Report:

The PBM must be capable of providing an annual on-line utilization tracking report to each participant utilizing the prescription drug program. The purpose of the annual utilization tracking report is not only to provide the participant with a complete list of prescription drugs processed through the prescription drug program, but to educate the participant regarding potential savings based on therapeutic and generic substitutions, dosage optimization, etc. At a minimum, the utilization tracking report should include:

a. Name and Address of PBM

b. Toll Free Number for PBM

c. Participant’s Name and Address

d. Participant’s Identification Number

e. Patient's Name

f. Provider Name

g. Claim Date of Service

h. Type of Service

i. Total Charges

j. Discount Amount

k. Allowed Amount

l. Excluded Charges

m. Amount Applied to Deductible

n. Copayment or Coinsurance Amount

o. Total Patient Responsibility

p. Total Payment Made and To Whom

Pharmacy Benefit Manager Services RFP – 2024 Page 17 of 86

2.2.23 Rebates:

a. The Board shall be entitled to receive the greater of: (1) the guaranteed minimum per claim rebate amount, or (2) 100% of all rebates, as defined by this RFP, paid by pharmaceutical manufacturers or intermediaries or other similar sources attributable to the Board’s utilization that the PBM receives from any and all pharmaceutical manufacturers or intermediaries or other similar sources. These sources may include, but will not be limited to, market share incentives; promotional allowances;

commissions; educational grants; Inflation protection; implementation allowances;

clinical detailing; or rebate submission fees. The intermediary will pay the PBM 100% of the rebates it receives that are directly attributable to prescription drug claims paid by the Board, allowing the PBM to pay the Board 100% of the rebates collected, regardless of who collected them (the PBM or the intermediary). The Board shall have full unrestricted audit rights to ensure compliance by the PBM and its intermediary with transparency and rebate submission requirements. The PBM must ensure that, to the extent that the Plan’s prescription drug purchases are included, any agreement the PBM now has, or subsequently enters into with an intermediary for rebate collection, contain sufficient language to provide the Board free and direct audit access to the financial records, claims data, remittance data, contracts (e.g. pharmacy network, pharmaceutical manufacturer, etc.), reports and other information required by the Board to verify that the Transparency requirement is being met by the PBM and the intermediary. Any fees or cost associated with rebates administration should be included in the PBM’s bundled administration fee.

b. The PBM will offer price or inflation protection guarantees.

c. The PBM must pass through price protection received from manufacturers through rebates to the Plan and shall be reported to the Plan quarterly.

d. The PBM will provide an NDC level report on earned rebate dollars and all ancillary fees paid by pharmaceutical manufacturers for medications dispensed for the Plan in addition to the monthly and annual reconciliation reports.

e. The PBM must provide rebate reporting by therapeutic category and by manufacturer on a quarterly basis and down to the NDC level.

f. The PBM will charge one overall administrative fee for all pharmacy services which shall include, but not be limited to, fees for rebate management, retail management, formulary management, and network management.

g. Manufacturer coupons or copay card programs cannot be used or included in the calculation of any rebate guarantees. Savings generated by coupon or copay shall not be used in calculating rebate guarantees. However, in the event a participant utilizes a copay or discount card in addition to their Plan benefits, any savings earned are to be passed back to the Board at 100% of the total value of the rebate or manufacturer reimbursement payments.

2.2.24 Transparency:

a. The Board requires absolute transparency and full pass through of all revenue, whether rebates or not, by the PBM and from the aggregator and/or GPO that the PBM contracts with. All revenue, no matter the form or what it is called or where it comes from, must pass through the Plan.

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b. The Board must have a transparent financial pricing arrangement from the PBM.

“Transparency” refers to financial arrangements which represent a direct and complete pass-through of all elements of financial payments. The Board must receive the full and complete amount of any discounts received by the PBM from any and all retail pharmacies. The PBM will not retain a differential (i.e. spread) between the amount reimbursed to the PBM by the Board for each transaction and the payments made to the retail pharmacies by the PBM.

c. The Board will not apply the above standard to mail order or specialty pharmaceutical transactions when owned by the PBM. For these mail order or specialty pharmaceuticals, the Board will accept the best possible discount arrangements from the PBM as it relates to discounts from AWP. Rebates generated through mail order and/or specialty pharmaceuticals will be subject to the transparency requirement described herein.

d. The only compensation the PBM will receive, attributable to the Plan’s utilization shall be from or on behalf of the Board, for the services described in this proposal or any subsequent contract, shall be the PBM’s quoted administrative fees listed in the PBM’s proposal or agreed upon in writing through subsequent discussion with the Board.

e. The PBM agrees to disclose details of all programs and services generating financial remuneration from outside entities.

2.2.25 Full Disclosure and Independent Review:

The Board must have access to all of the PBM, aggregator, and/or GPO’s financial records including the Maximum Allowable Cost (MAC) list used to adjudicate the Plan's claims, claims data, remittance data, contracts (e.g. pharmacy network, pharmaceutical manufacturer, etc.), reports and other information required by the Board to verify that the transparency requirement is being met by the PBM, aggregator, and/or GPO during the period covered by the contractual term. Full disclosure as used herein would include, but not be limited to, auditing the following types of financial arrangements:

a. Any amount paid for the Plan by the PBM, aggregator, and/or GPO to retail pharmacies under contract with the PBM, aggregator, and/or GPO’s retail network is subject to audit even though the PBM, aggregator, and/or GPO may deem said contracts proprietary and confidential;

b. Rebates or any other monies or fees, which include administrative fees, paid to the PBM, aggregator, and/or GPO by pharmaceutical manufacturers are subject to review for audit purposes;

c. Any amount paid for the Plan by the PBM, aggregator, and/or GPO to a mail order or specialty pharmacy, when not owned by the PBM, aggregator, and/or GPO, will be subject to audit, whether or not the contract is considered proprietary and confidential by the PBM, aggregator, and/or GPO;

d. Discounts negotiated directly by the PBM, aggregator, and/or GPO with manufacturers shall be subject to audit; and

e. Aggregate rebate collecting, reporting, and contractual arrangements.

The Board, at its discretion, may use the services of an independent reviewer to perform reviews/audits of the PBM, aggregator, and/or GPO’s records on behalf of the Board. The Board and its independent reviewer will comply with all applicable confidentiality laws and will not reveal any confidential information acquired as a result of the review/audit.

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The Board has the right to review/audit records for the entire term of the agreement without limitation up to two times per calendar year. Any claims information, documents, etc.

which the PBM, aggregator, and/or GPO may deem as containing “trade secrets” will not preclude an examination of such items through the audit process. The PBM, aggregator, and/or GPO will provide the Board assistance in the audit reviews by providing access to records, copies of claims data, access to reasonable support staff, etc. at no cost to the Board. The PBM, aggregator, and/or GPO will cooperate with the independent reviewer and agree to respond to any inquiries by the independent reviewer within the agreed upon schedule. The PBM, aggregator, and/or GPO will, within 60 days of final report being issued by Auditor, complete the final reconciliation and submit any and all reimbursement to the Plan. The PBM, aggregator, and/or GPO will not restrict the size of the claims sample reviewed by the independent reviewer which may include a review of 100% of all claims for the period under review. The Board will bear the cost of any fees charged by its independent reviewer.

2.2.26 Market Checks:

The Board may perform, or have performed on its behalf, following the twelfth…