May 29, 2020
Within hours of taking office in 2019, Governor Gavin Newsom issued an executive order to achieve cost-savings for prescription drug purchases made by the state.
A key component of executive order requires the California Department of Health Care Services (DHCS) transition all Medi-Cal pharmacy services from managed care to fee-for-service (FFS) effective January 1, 2021. The Medi-Cal pharmacy benefits and services administered by DHCS in the FFS delivery system is collectively referred to as “Medi-Cal Rx.” The goal of Medi-Cal Rx is to create cost savings and streamline the administration of drug benefits in the Medi-Cal system.
DHCS is currently working on a plan to transition all pharmacy services to Medi-Cal Rx and has selected Magellan as the vendor to manage the program.
The California Medical Association (CMA) has been appointed to the Medi-Cal Rx Workgroup and will be participating in these meetings regularly over the next 18 months. To date, CMA has emphasized the importance of communication to physicians to ensure a smooth implementation.
Medi-Cal Rx will include all pharmacy services billed as a pharmacy claim, including physician administered drugs (PADs). However, PADs billed on medical or institutional claims are excluded from the requirement to transition to Medi-Cal Rx and should not be affected. The Medi-Cal pharmacy benefit will be standardized statewide and all pharmacy claims will be subject to statewide utilization management protocols.
With this transition, there will likely be some changes to the formulary. Rather than using Medi-Cal managed care plans’ individual formularies to determine coverage, the new Medi-Cal Rx program will utilize a statewide Contract Drug List (CDL).
DHCS will be implementing a transition policy to ensure that Medi-Cal beneficiaries with existing prescriptions currently covered by their Medi-Cal managed care plans – but that would require prior authorization in FFS – have continued coverage during a set transition period. During the transition period for medications not on the CDL, physicians can either submit a prior authorization request to continue the patient on the medication not on the CDL or switch the patient to a drug on the CDL without prior authorization requirements.
Pending Magellan’s launch of the new Medi-Cal Rx web portal (currently planned for June 2020), providers and interested stakeholders can visit DHCS’ Medi-Cal Rx web page for more information.