Title of Regulation: 12VAC30-50. Amount, Duration, and Scope of Medical and Remedial Care Services (amending 12VAC30-50-210).

Statutory Authority: § 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: June 14, 2017.

Effective Date: June 29, 2017.

Agency Contact: Emily McClellan, Regulatory Supervisor, Policy Division, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-4300, FAX (804) 786-1680, or email emily.mcclellan@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance, and § 32.1-324 of the Code of Virginia authorizes the Director of the Department of Medical Assistance Services (DMAS) to administer and amend the Plan for Medical Assistance according to the board's requirements. The Medicaid authority as established by § 1902(a) of the Social Security Act (42 USC § 1396a) provides governing authority for payments for services.

Purpose: This regulatory action permits DMAS to cover insect repellant for Medicaid enrollees of childbearing age if the repellant is prescribed by an authorized health professional. Covering insect repellant could prevent Zika transmission and avert babies being born with microcephaly and other severe brain defects who could eventually need expensive waiver services. Covering insect repellant has significant public health benefits and downstream cost savings in that insect repellant can prevent infection during the early stages of pregnancy when Zika has the most catastrophic impact on fetal development.

Individuals of childbearing age have been defined as women and men aged 14 through 44 years, based on Virginia Department of Health guidelines.

Rationale for Using Fast-Track Rulemaking Process: The fast-track rulemaking process is being utilized to promulgate this change in regulatory language as the change is expected to be a noncontroversial amendment to existing regulations. This regulatory action will represent a significant public health benefit at a relatively low cost. Increasing access to repellant for the fee-for-service (FFS) population will help prevent infection by the Zika virus during the early stages of pregnancy when Zika has the most catastrophic impact on fetal development. Covering repellant in FFS will represent a cost savings because pregnant women are often in FFS during their first and second trimesters.

Substance: An informational bulletin issued by the Centers for Medicare and Medicaid Services entitled "Medicaid Benefits Available for the Prevention, Detection, and Response to the Zika Virus" that was issued on June 1, 2016, permits coverage of insect repellant with a prescription and specifies that repellants would be eligible for federal matching funds.

Ohio currently covers insect repellants as durable medical equipment. Louisiana covers insect repellants under the pharmacy benefit if local mosquito-borne transmission has occurred. Before the emergency regulation took effect, Virginia Premier was the only Medicaid health plan in Virginia that covered insect repellants with a prescription for all of its Medicaid members.

There are approximately 4,700 pregnant women in fee-for-service Medicaid and FAMIS in any given month, and additional women are covered by Medicaid managed care. Many of these women are in the early stages of pregnancy. Covering insect repellant has significant public health benefits and downstream cost savings in that insect repellant can prevent infection during the early stages of pregnancy when Zika has the most catastrophic impact on fetal development.

These regulations will cover insect repellants that have been evaluated and registered by the U.S. Environmental Protection Agency (EPA) for effectiveness. More specifically, these include EPA-registered insect repellants with one of the following active ingredients: DEET, picaridin, IR3535, oil of lemon eucalyptus, or para-menthane-diol.

Issues: The Centers for Medicare and Medicaid Services has encouraged state Medicaid programs to cover insect repellants when prescribed by an authorized health professional. The primary advantage to the public and to the Commonwealth from covering insect repellant for pregnant women in fee-for-service Medicaid and Medicaid managed care plans is that this coverage could prevent Zika transmission and prevent children born with microcephaly and other severe brain defects. Investing in the coverage of insect repellant now could prevent a child from being born with microcephaly who could eventually need expensive intellectual disability waiver or other waiver services.

It is evidenced that mosquito-borne Zika infections are now originating in the United States, and there is a threat that Virginia residents may soon be subject to locally-based Zika infection. The lack of access to insect repellant for Medicaid enrollees in Virginia has created an urgent situation that necessitates the implementation of regulations to address this emerging public health threat. Infection by the Zika virus during the early stages of pregnancy can have a catastrophic impact on fetal development, thereby positioning insect repellant as a critical need for Medicaid enrollees of childbearing age. Further regulatory action is needed for DMAS to speedily address the increased likelihood of Zika virus transmission in Virginia and specifically for Medicaid and FAMIS enrollees.

There are no disadvantages to the public or the Commonwealth related to this regulatory action.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulation will make permanent an emergency regulation providing Medicaid coverage for insect repellents prescribed to individuals of childbearing age and all pregnant women to prevent transmission of the Zika virus.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. On June 1, 2016, the Centers for Medicare and Medicaid Services issued guidelines describing Medicaid benefits available for prevention, detection, and response to the Zika virus and permitted coverage of insect repellents with a prescription. The Zika virus is spread to people primarily through the bite of an infected mosquito. The Zika virus can also be sexually transmitted between partners regardless of gender. Infection by the Zika virus during the early stages of pregnancy may cause babies to be born with microcephaly (i.e., an unusually small head, often accompanied by brain damage). Other problems have been detected in fetuses and infants infected with Zika virus, such as defects of the eye, hearing deficits, and impaired growth. Protection against mosquito bites is one of the major means of prevention in addition to mosquito control and contraceptives.

Upon request by the Department of Medical Assistance Services (DMAS) citing 48 confirmed cases of Zika virus infection in the Commonwealth, the Governor approved the issuance of an emergency regulation on August 12, 2016, to provide coverage for mosquito repellents to men and women between the reproductive ages of 14 through 44 years and all pregnant women. Approved repellents are those that have been evaluated and registered by the Environmental Protection Agency containing specific active ingredients. In addition, the repellent must be prescribed by an authorized health professional. However, recipients are advised to call their doctors or health care providers and ask them to send a prescription for the mosquito repellent to their pharmacy and not to request an office visit unless there is a medical necessity or it is required by the health care provider.

According to DMAS, there are approximately 4,700 pregnant women in Fee-for-Service Medicaid and FAMIS programs in any given month many of whom are at the early stages of pregnancy. Last year from middle of August to end of November, DMAS paid $383.21 for 39 claims, or $9.83 per claim.¹ DMAS expects a higher utilization in the upcoming year because the coverage will start at the beginning of May rather than the middle of August, and the awareness of Zika risks and its coverage will likely be greater this year.

The main economic benefit of the proposed coverage is the prevention of children being born with microcephaly and other birth defects. A catastrophic impact on fetal development as a result of Zika virus infection could necessitate utilization of expensive ID/D Waiver or other waiver services later on. Avoidance of any such costs through prevention is the main economic benefit of this proposed regulation.

Businesses and Entities Affected. The insect repellents can be prescribed to Medicaid recipients between the ages of 14 through 44 years and all pregnant women under the proposed regulation. In the last Zika season, there were 39 claims paid.

Localities Particularly Affected. The proposed regulation applies statewide.

Projected Impact on Employment. No significant impact on employment is expected.

Effects on the Use and Value of Private Property. No significant impact on the use and value of private property is expected.

Real Estate Development Costs. No impact on real estate development costs is expected.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The coverage of insect repellents by public funds would theoretically lead to increased sales at pharmacies some of which are small businesses. However, the magnitude of this effect based on last year's data was negligible (i.e., $383.21).

Alternative Method that Minimizes Adverse Impact. No adverse impact on small businesses is expected.

Adverse Impacts:

Businesses. The proposed amendments do not have an adverse impact on non-small businesses.

Localities. The proposed amendments will not adversely affect localities.

Other Entities. The proposed amendments will not adversely affect other entities.

¹Normally Medicaid pays a dispensing fee per prescription. The dispensing fee was $3.75 prior to 1/9/2017 and now is $10.65. However, a pharmacy may not bill more than its usual and customary price and therefore may not be able to bill for the dispensing fee. In other words, a pharmacy would not be paid more than what a cash paying customer would pay for a repellent.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis prepared by the Department of Planning and Budget and raises no issues with this analysis.

Summary:

The amendment provides Medicaid coverage for mosquito repellants prescribed by an authorized health professional for individuals of childbearing age and all pregnant women to prevent the transmission of the Zika virus.

12VAC30-50-210. Prescribed drugs, dentures, and prosthetic devices; and eyeglasses prescribed by a physician skilled in diseases of the eye or by an optometrist.

A. Prescribed drugs.

1. Drugs for which Federal Financial Participation is not available, pursuant to the requirements of § 1927 of the Social Security Act (OBRA 90 § 4401), shall not be covered.

2. Nonlegend drugs shall be covered by Medicaid in the following situations:

a. Insulin, syringes, and needles for diabetic patients;

b. Diabetic test strips for Medicaid recipients under 21 years of age;

c. Family planning supplies;

d. Designated categories of nonlegend drugs for Medicaid recipients in nursing homes; and

e. Designated drugs prescribed by a licensed prescriber to be used as less expensive therapeutic alternatives to covered legend drugs; and

f. U.S. Environmental Protection Agency-registered insect repellents with one of the following active ingredients: DEET, picaridin, IR3535, oil of lemon eucalyptus, or p-Menthane-3,8-diol for all Medicaid members of reproductive age (ages 14 through 44 years) and all pregnant women, when prescribed by an authorized health professional.

3. Legend drugs are covered for a maximum of a 34-day supply per prescription per patient with the exception of the drugs or classes of drugs identified in 12VAC30-50-520. FDA-approved drug therapies and agents for weight loss, when preauthorized, will be covered for recipients who meet the strict disability standards for obesity established by the Social Security Administration in effect on April 7, 1999, and whose condition is certified as life threatening, consistent with Department of Medical Assistance Services' medical necessity requirements, by the treating physician. For prescription orders for which quantity exceeds a 34-day supply, refills may be dispensed in sufficient quantity to fulfill the prescription order within the limits of federal and state laws and regulations.

4. Prescriptions for Medicaid recipients for multiple source drugs subject to 42 CFR 447.332 shall be filled with generic drug products unless the physician or other practitioners practitioner so licensed and certified to prescribe drugs certifies in his own handwriting "brand necessary" for the prescription to be dispensed as written or unless the drug class is subject to the Preferred Drug List.

5. New drugs shall be covered in accordance with the Social Security Act § 1927(d) (OBRA 90 § 4401).

6. The number of refills shall be limited pursuant to § 54.1-3411 of the Drug Control Act.

7. Drug prior authorization.

a. Definitions. The following words and terms used in these regulations this subdivision 7 shall have the following meanings unless the context clearly indicates otherwise:

"Clinical data" means drug monographs as well as any pertinent clinical studies, including peer review literature.

"Complex drug regimen" means treatment or course of therapy that typically includes multiple medications, co-morbidities and/or, or caregivers.

"Department" or "DMAS" means the Department of Medical Assistance Services.

"Drug" shall have the same meaning, unless the context otherwise dictates or the board otherwise provides by regulation, as provided in the Drug Control Act (§ 54.1-3400 et seq. of the Code of Virginia).

"Emergency supply" means 72-hour supplies of the prescribed medication that may be dispensed if the prescriber cannot readily obtain authorization, or if the physician is not available to consult with the pharmacist, including after hours, weekends, holidays and the pharmacist, in his professional judgment consistent with current standards of practice, feels that the patient's health would be compromised without the benefit of the drug, or other criteria defined by the Pharmacy and Therapeutics Committee and DMAS.

"Nonpreferred drugs" means those drugs that were reviewed by the Pharmacy and Therapeutics Committee and not included on the preferred drug list. Nonpreferred drugs may be prescribed but require authorization prior to dispensing to the patient.

"Pharmacy and Therapeutics Committee," "P&T Committee" or "committee" means the committee formulated to review therapeutic classes, conduct clinical reviews of specific drugs, recommend additions or deletions to the preferred drug list, and perform other functions as required by the department.

"Preferred drug list" or "PDL" means the list of drugs that meet the safety, clinical efficacy, and pricing standards employed by the P&T Committee and adopted by the department for the Virginia Medicaid fee-for-service program. Most drugs on the PDL may be prescribed and dispensed in the Virginia Medicaid fee-for-service program without prior authorization; however, some drugs as recommended by the Pharmacy and Therapeutics Committee may require authorization prior to dispensing to the patient.

"Prior authorization," as it relates to the PDL, means the process of review by a clinical pharmacist of legend drugs that are not on the preferred drug list, or other drugs as recommended by the Pharmacy and Therapeutics Committee, to determine if medically justified.

"State supplemental rebate" means any cash rebate that offsets Virginia Medicaid expenditure and that supplements the federal rebate. State supplemental rebate amounts shall be calculated in accordance with the Virginia Supplemental Drug Rebate Agreement Contract and Addenda.

"Therapeutic class" means a grouping of medications sharing the same Specific Therapeutic Class Code (GC3) within the Federal Drug Data File published by First Data Bank, Inc.

"Utilization review" means the prospective and retrospective processes employed by the agency to evaluate the medical necessity of reimbursing for certain covered services.

b. Medicaid Pharmacy and Therapeutics Committee.

(1) The department shall utilize a Pharmacy and Therapeutics Committee to assist in the development and ongoing administration of the preferred drug list and other pharmacy program issues. The committee may adopt bylaws that set out its make-up and functioning. A quorum for action of the committee shall consist of seven members.

(2) Vacancies on the committee shall be filled in the same manner as original appointments. DMAS shall appoint individuals for the committee that assures a cross-section of the physician and pharmacy community and remains compliant with General Assembly membership guidelines.

(3) Duties of the committee. The committee shall receive and review clinical and pricing data related to the drug classes. The committee's medical and pharmacy experts shall make recommendations to DMAS regarding various aspects of the pharmacy program. For the preferred drug list program, the committee shall select those drugs to be deemed preferred that are safe, clinically effective, as supported by available clinical data, and meet pricing standards. Cost effectiveness or any pricing standard shall be considered only after a drug is determined to be safe and clinically effective.

(4) As the United States U.S. Food and Drug Administration (FDA) approves new drug products, the department shall ensure that the Pharmacy and Therapeutics Committee will evaluate the drug for clinical effectiveness and safety. Based on clinical information and pricing standards, the P&T Committee will determine if the drug will be included in the PDL or require prior authorization.

(a) If the new drug product falls within a drug class previously reviewed by the P&T Committee, until the review of the new drug is completed, it will be classified as nonpreferred, requiring prior authorization in order to be dispensed. The new drug will be evaluated for inclusion in the PDL no later than at the next review of the drug class.

(b) If the new drug product does not fall within a drug class previously reviewed by the P&T Committee, the new drug shall be treated in the same manner as the other drugs in its class.

(5) To the extent feasible, the Pharmacy and Therapeutics Committee shall review all drug classes included in the preferred drug list at least every 12 months and may recommend additions to and deletions from the PDL.

(6) In formulating its recommendations to the department, the committee shall not be deemed to be formulating regulations for the purposes of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

(7) Immunity. The members of the committee and the staff of the department and the contractor shall be immune, individually and jointly, from civil liability for any act, decision, or omission done or made in performance of their duties pursuant to this subsection while serving as a member of such board, committee, or staff provided that such act, decision, or omission is not done or made in bad faith or with malicious intent.

c. Pharmacy prior authorization program. Pursuant to § 1927 of the Act and 42 CFR 440.230, the department shall require the prior authorization of certain specified legend drugs. For those therapeutic classes of drugs subject to the PDL program, drugs with nonpreferred status included in the DMAS drug list shall be subject to prior authorization. The department also may require prior authorization of other drugs only if recommended by the P&T Committee. Providers who are licensed to prescribe legend drugs shall be required to obtain prior authorization for all nonpreferred drugs or other drugs as recommended by the P&T Committee.

(1) Prior authorization shall consist of prescription review by a licensed pharmacist or pharmacy technician to ensure that all predetermined clinically appropriate criteria, as established by the P&T Committee relative to each therapeutic class, have been met before the prescription may be dispensed. Prior authorization shall be obtained through a call center staffed with appropriate clinicians, or through written or electronic communications (e.g., faxes, mail). Responses by telephone or other telecommunications device within 24 hours of a request for prior authorization shall be provided. The dispensing of 72-hour emergency supplies of the prescribed drug may be permitted and dispensing fees shall be paid to the pharmacy for such emergency supply.

(2) The preferred drug list program shall include: (i) provisions for an expedited review process of denials of requested prior authorization by the department; (ii) consumer and provider education; (iii) training and information regarding the preferred drug list both prior to implementation as well as ongoing communications, to include computer and website access to information and multilingual material.

(3) Exclusion of protected groups from pharmacy preferred drug list prior authorization requirements. The following groups of Medicaid eligibles shall be excluded from pharmacy prior authorization requirements: individuals enrolled in hospice care, services through PACE or pre-PACE programs; persons having comprehensive third party insurance coverage; minor children who are the responsibility of the juvenile justice system; and refugees who are not otherwise eligible in a Medicaid covered group.

d. State supplemental rebates. The department has the authority to seek supplemental rebates from pharmaceutical manufacturers. The contract regarding supplemental rebates shall exist between the manufacturer and the Commonwealth. Rebate agreements between the Commonwealth and a pharmaceutical manufacturer shall be separate from the federal rebates and in compliance with federal law, §§ 1927(a)(1) and 1927(a)(4) of the Social Security Act. All rebates collected on behalf of the Commonwealth shall be collected for the sole benefit of the state share of costs. One hundred percent of the supplemental rebates collected on behalf of the state shall be remitted to the state. Supplemental drug rebates received by the Commonwealth in excess of those required under the national drug rebate agreement will be shared with the federal government on the same percentage basis as applied under the national drug rebate agreement.

e. Pursuant to 42 USC § 1396r-8(b)(3)(D), information disclosed to the department or to the committee by a pharmaceutical manufacturer or wholesaler which discloses the identity of a specific manufacturer or wholesaler and the pricing information regarding the drugs by such manufacturer or wholesaler is confidential and shall not be subject to the disclosure requirements of the Virginia Freedom of Information Act (§ 2.2-3700 et seq. of the Code of Virginia).

f. Appeals for denials of prior authorization shall be addressed pursuant to 12VAC30-110, Part I, Client Appeals.

8. Coverage of home infusion therapy. This service shall be covered consistent with the limits and requirements set out within home health services (12VAC30-50-160). Multiple applications of the same therapy (e.g., two antibiotics on the same day) shall be covered under one service day rate of reimbursement. Multiple applications of different therapies (e.g., chemotherapy, hydration, and pain management on the same day) shall be a full service day rate methodology as provided in pharmacy services reimbursement.

B. Dentures. Dentures are provided only as a result of EPSDT and subject to medical necessity and preauthorization requirements specified under Dental Services.

C. Prosthetic devices.

1. Prosthetic services shall mean the replacement of missing arms, legs, eyes, and breasts and the provision of any internal (implant) body part. Nothing in this regulation shall be construed to refer to orthotic services or devices or organ transplantation services.

2. Artificial arms and legs, and their necessary supportive attachments, implants and breasts are provided when prescribed by a physician or other licensed practitioner of the healing arts within the scope of their professional licenses as defined by state law. This service, when provided by an authorized vendor, must be medically necessary and preauthorized for the minimum applicable component necessary for the activities of daily living.

3. Eye prostheses are provided when eyeballs are missing regardless of the age of the recipient or the cause of the loss of the eyeball. Eye prostheses are provided regardless of the function of the eye.

D. Eyeglasses. Eyeglasses shall be reimbursed for all recipients younger than 21 years of age according to medical necessity when provided by practitioners as licensed under the Code of Virginia.