Title of Regulation: 12VAC30-10. State Plan under Title XIX of the Social Security Act Medical Assistance Program; General Provisions (amending 12VAC30-10-650).

Statutory Authority: § 32.1-325 of the Code of Virginia; 42 USC § 1315 and 42 USC § 1396 et seq.

Public Hearing Information: No public hearings are currently scheduled.

Public Comment Deadline: August 18, 2021.

Effective Date: September 2, 2021.

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 to promulgate regulations. Section 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 and to promulgate regulations according to the board's requirements.

Purpose: DMAS is incorporating changes to the state plan text related to the Drug Utilization Review Program in accordance with the requirements of the Support Act (Public Law No. 115-271). The changes include Support Act provisions related to (i) claims review limitations; (ii) a program to monitor antipsychotic medications by children; (iii) fraud and abuse identification; and (iv) Medicaid managed care organizations requirements. This action is essential to protect the health, safety, and welfare of the public in that it ensures that DMAS and Medicaid Managed Care Organizations are in compliance with the Support Act with regard to opioid and antipsychotic medications, as well as federal rules related to prescription fraud and abuse.

Rational for Using Fast-Track Rulemaking Process: These changes ensure that DMAS will remain in compliance with federal regulation to ensure continued federal financial participation. In addition, as a result of the Support Act, DMAS updated its state plan through State Plan Amendment 19-017 with an effective date of December 31, 2019. This regulatory action is eligible for the fast-track process because none of the changes are expected to be controversial.

Substance: The Support Act requires DMAS and Medicaid Managed Care Organizations to comply with federal rules relating to opioid and antipsychotic medications, as well as federal rules related to prescription fraud and abuse. Those federal requirements are being incorporated into regulation to ensure compliance on these items. The section of the State Plan for Medical Assistance that is affected by this amendment is 12VAC30-10-650.

Issues: The changes ensure that DMAS remains in compliance with federal regulations to continue to obtain federal financial participation; there are no disadvantages in this regulatory change.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As the result of a federal mandate, the Board of Medical Assistance Services (Board) proposes to amend the Drug Utilization Review (DUR) Program provisions in the State Plan Under Title XIX of the Social Security Act Medical Assistance Program; General Provisions regulation (regulation) to align with the Medicaid State Plan for Medical Assistance Services (state plan).

Background:

Federal background. Section 1902 (a) of the Social Security Act (42 USC 1396a) establishes the federal requirements for administering State Plans for Medical Assistance including specific administration, eligibility, payment, and reporting requirements. Section 1004 of the federal Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act (Public Law No. 115-271) amended § 1902(a) effective October 1, 2019, requiring compliance with the drug review and utilization requirements under subsection (oo)(1) in an effort "to reduce opioid related fraud, misuse and abuse."¹

State background. To comply with the SUPPORT Act, DMAS has already updated its state plan through Virginia State Plan Amendment (SPA) #: 19-017 effective December 31, 2019.² According to DMAS, the proposed amendments to the regulation are identical to the SPA. Thus, the requirements are already in effect.

Part of the current regulation is as follows:

B. The DUR program is designed to educate physicians and pharmacists to identify and to reduce the frequency of patterns of fraud, abuse, gross overuse, or inappropriate or medically unnecessary care among physicians, pharmacists, and patients or associated with specific drugs as well as:

1. Potential and actual adverse drug reactions

2. Therapeutic appropriateness

3. Overutilization and underutilization

4. Appropriate use of generic products

5. Therapeutic duplication

6. Drug disease contraindications

7. Drug-drug interactions

8. Incorrect drug dosage or duration of drug treatment

9. Drug allergy interactions

10. Clinical abuse/misuse

The Board proposes to add the following:

11. Provisions of Section 1004 of the SUPPORT ACT (below)

C. SUPPORT ACT Provisions

1. Claim Review Limitations

a. Prospective safety edits including early, duplicate fill, and quantity limits for clinical appropriateness for opioids.

b. Maximum daily Morphine Milligram Equivalents (MME) safety edits: A maximum dosing limit on opioids limits the daily morphine milliequivalents (as recommended by clinical guidelines)

c. Concurrent Utilization Alerts: Prospective drug to-drug interaction alerts will require a response from the pharmacy if an opioid and benzodiazepine or opioid and antipsychotics are being dispensed within an overlapping period with retrospective reviews performed on an ongoing periodic basis.

d. Comprehensive Retrospective DUR is performed on opioid prescriptions on an ongoing periodic basis.

2. Programs to Monitor Antipsychotic Medications to Children. Antipsychotic agents are reviewed for age appropriateness, duplicate therapy, and adverse effects in children based on the FDA product approval and clinical guidelines.

3. Fraud and Abuse Identification. The Client Medical Management (CMM) program for fee-for-service (FFS) beneficiaries that may require restriction to physician, pharmacy or both limiting the beneficiary's access to services identified as not medically necessary, excessive or both. The beneficiary's designated physician is responsible for supervising, coordinating, and providing initial and primary medical care; initiating written referrals for specialist care and for maintaining the continuity of patient care.

Estimated Benefits and Costs. There are six managed care organizations (MCOs) that have contracted with DMAS to provide managed care services to Medicaid recipients. DMAS and each of the MCOs have their own DUR programs. The DMAS program is for fee-for-service Medicaid recipients. A large part of the DUR programs involve pharmacists receiving immediate alerts when the items listed in 12VAC30-10-650 B are detected, as well as retrospective reviews.

All of the new requirements that were added to the state plan through SPA were also added to MCO contracts. Thus, these requirements are already in effect. With the exception of Concurrent Utilization Alerts (see 12VAC30-10-650 C 1 c), DMAS does not believe any of the new requirements caused the MCOs to substantively alter their practices or affected cost. DMAS does not know if the MCOs were producing Concurrent Utilization Alerts for opioid and benzodiazepine or opioid and antipsychotics being dispensed within an overlapping period. If any of the MCOs were not producing these alerts, they would have needed to reprogram their computer system to start producing such alerts to pharmacists. In addition to the time cost of reprogramming,³ there is potential benefit in producing these alerts in that the likelihood of some adverse drug interactions may be reduced.

According to DMAS, the agency was already doing everything in the new language prior to it being added to the state plan. Thus, DMAS and fee-for-service Medicaid recipients were not directly affected.

Businesses and Other Entities Affected. The proposed amendments concern the approximate 1,500 pharmacies that are enrolled with Virginia Medicaid, the six MCOs that have contracted with DMAS, and Medicaid recipients. Adding the proposed language to the regulation would not increase costs for any entity.

Small Businesses⁴ Affected. The proposed amendments do not appear to adversely affect small businesses.

Localities⁵ Affected.⁶ The proposed amendments do not disproportionally affect any particular locality. The proposal does not introduce costs for local governments.

Projected Impact on Employment. The proposal does not affect employment.

Effects on the Use and Value of Private Property. The proposal does not affect the use and value of private property. The proposal does not affect real estate development costs.

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¹ See https://www.medicaid.gov/federal-policy-guidance/downloads/cib080519-1004.pdf

² See https://www.medicaid.gov/State-resource-center/Medicaid-State-Plan-Amendments/Downloads/VA/VA-19-0017.pdf

³ If the MCO used an outside firm for programming, it would be a fee cost instead of the time of an MCO employee.

⁴ 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."

⁵ "Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁶ § 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The amendments incorporate changes to the State Plan for Medical Assistance related to the Drug Utilization Review Program in accordance with the requirements of the SUPPORT Act (P.L.115-271) and include (i) provisions related to claims review limitations; (ii) adding a program to monitor antipsychotic medications by children; (iii) fraud and abuse identification; and (iv) new Medicaid managed care organizations requirements.

12VAC30-10-650. Drug Utilization Review Program.

A. 1. The Medicaid agency meets the requirements of § 1927(g) of the Social Security Act for a drug use review (DUR) program for outpatient drug claims.

2. The DUR program assures that prescriptions for outpatient drugs are:

a. Appropriate.

b. Medically necessary.

c. Are not likely to result in adverse medical results.

B. The DUR program is designed to educate physicians and pharmacists to identify and to reduce the frequency of patterns of fraud, abuse, gross overuse, or inappropriate or medically unnecessary care among physicians, pharmacists, and patients or associated with specific drugs as well as:

1. Potential and actual adverse drug reactions;

2. Therapeutic appropriateness;

3. Overutilization and underutilization;

4. Appropriate use of generic products;

5. Therapeutic duplication;

6. Drug disease contraindications;

7. Drug-drug interactions;

8. Incorrect drug dosage or duration of drug treatment;

9. Drug allergy interactions;

10. Clinical abuse/misuse abuse or misuse; and

11. Provisions of § 1004 of the SUPPORT Act.

C. SUPPORT Act provisions.

1. Claim review limitations:

a. Prospective safety edits, including early, duplicate fill, and quantity limits for clinical appropriateness for opioids.

b. Maximum daily morphine milligram equivalents safety edits. A maximum dosing limit on opioids limits the daily morphine milliequivalents as recommended by clinical guidelines.

c. Concurrent utilization alerts. Prospective drug-to-drug interaction alerts will require a response from the pharmacy if an opioid and benzodiazepine or opioid and antipsychotics are being dispensed within an overlapping period with retrospective reviews performed on an ongoing periodic basis.

d. Comprehensive retrospective DUR is performed on opioid prescriptions on an ongoing periodic basis.

2. Programs to monitor antipsychotic medications to children. Antipsychotic agents are reviewed for age appropriateness, duplicate therapy, and adverse effects in children based on the U.S. Food and Drug Administration product approval and clinical guidelines.

3. Fraud and abuse identification. The Client Medical Management (CMM) program for fee-for-service (FFS) beneficiaries that may require restriction to physician, pharmacy, or both limiting the beneficiary's access to services identified as not medically necessary, excessive, or both. The beneficiary's designated physician is responsible for supervising, coordinating, and providing initial and primary medical care; initiating written referrals for specialist care; and maintaining the continuity of patient care.

C. D. The DUR program shall assess data use against predetermined standards whose source materials for their development are consistent with peer-reviewed medical literature which that has been critically reviewed by unbiased independent experts and the following compendia:

1. American Hospital Formulary Service Drug Information (2003, as amended);

2. United States Pharmacopeia-Drug Information (2003, as amended);

3. MICROMEDEX (as updated monthly);

4. Drug Facts and Comparisons (as updated monthly); and

5. Drug Information Handbook (2003, as amended in 2004).

D. E. DUR is not required for drugs dispensed to residents of nursing facilities that are in compliance with drug regimen review procedures set forth in 42 CFR 483.60. The state has nevertheless chosen to include nursing home drugs in retrospective DUR.

E. F. 1. The DUR program includes prospective review of drug therapy at the point of sale or point of distribution before each prescription is filled or delivered to the Medicaid recipient.

2. Prospective DUR includes screening each prescription filled or delivered to an individual receiving benefits for potential drug therapy problems due to:

—a. Therapeutic duplication;

—b. Drug disease contraindications;

—c. Drug-drug interactions;

—d. Drug-interactions with nonprescription or over-the-counter drugs;

—e. Incorrect dosage or duration of drug treatment;

—f. Drug allergy interactions; and

—g. Clinical abuse/misuse abuse or misuse.

3. Prospective DUR includes counseling for Medicaid recipients based on standards established by State law and maintenance of patient profiles.

4. Prospective DUR may also include electronic messages as well as rejection of claims at point-of-sale pending appropriate designated interventions by the dispensing pharmacist or prescribing physician.

5. Designated interventions may include provider override, obtaining prior authorization via communication to a call center staffed with appropriate clinicians, or written communication to prescribers.

F. G. 1. The DUR program includes retrospective DUR through its mechanized drug claims processing and information retrieval system or otherwise which that undertakes ongoing periodic examination of claims data and other records to identify:

—a. Patterns of fraud and abuse;

—b. Gross overuse; and

—c. Inappropriate or medically unnecessary care among physicians, pharmacists, Medicaid recipients, or associated with specific drugs or groups of drugs.

2. The DUR program assesses data on drug use against explicit predetermined standards, including but not limited to monitoring for:

—a. Therapeutic appropriateness;

—b. Overutilization and underutilization;

—c. Appropriate use of generic products;

—d. Therapeutic duplication;

—e. Drug disease contraindications;

—Drug-drug f. Drug-to-drug interactions;

—g. Incorrect dosage/duration dosage or duration of drug treatment; and

—h. Clinical abuse/misuse abuse or misuse.

3. The DUR program through its state DUR Board, using data provided by the board, provides for active and ongoing educational outreach programs to educate practitioners and pharmacists on common drug therapy problems to improve prescribing and dispensing practices.

4. In situations of conflict with these criteria, DMAS, pursuant to the DUR Board's criteria and requirements, shall reject or deny presented claims and require the dispensing pharmacist to intervene as specified through electronic messages in the point-of-sale system before the claim will be approved for payment.

5. Designated interventions may include provider override, obtaining prior authorization via communication to a call center staffed with appropriate clinicians, or written communication to prescribers.

G. H. 1. The DUR program has established a state DUR Board directly.

2. The DUR Board membership includes health professionals (one-third licensed actively practicing pharmacists and one-third but no more than 51% percent licensed and actively practicing physicians) with knowledge and experience in one or more of the following:

—a. Clinically appropriate prescribing of covered outpatient drugs.

—b. Clinically appropriate dispensing and monitoring of covered outpatient drugs.

—c. Drug use review, evaluation, and intervention.

—d. Medical quality assurance.

3. The activities of the DUR Board include:

—a. Prospective DUR;

—b. Retrospective DUR;

—c. Application of Standards as defined in § 1927(g)(2)(C),; and

—d. Ongoing interventions for physicians and pharmacists targeted toward therapy problems or individuals identified in the course of retrospective DUR.

4. The interventions include in appropriate instances:

—a. Information dissemination.

—b. Written, oral, and electronic reminders.

—c. Face-to-Face and telephonic discussions.

—d. Intensified monitoring/review monitoring or review of prescribers/ prescribers or dispensers.

—e. Rejected or denied claims, as appropriate, to prevent the violation of the DUR Board's predetermined criteria.

—Provider override, obtaining prior authorization via communication to a call center staffed with appropriate clinicians, or written communication to prescribers.

H. I. The state assures that it will prepare and submit an annual report to the secretary, which incorporates a report from the state DUR Board, and that the state will adhere to the plans, steps, procedures as described in the report.

The Medicaid agency ensures that predetermined criteria and standards have been recommended by the DUR Board and approved by either BMAS Board of Medical Assistance Services (BMAS) or the director, acting on behalf of the BMAS, pursuant to § 32.1-324 of the Code of Virginia and that they are based upon documentary evidence of the DUR Board. The activities of the DUR Board and the Medicaid fraud control programs are and shall be maintained as separate. The DUR Board shall refer suspected cases of fraud or abuse to the appropriate fraud and abuse control unit with the Medicaid agency.

I. J. 1. The state establishes, as its principal means of processing claims for covered outpatient drugs under this title, a point-of-sale electronic claims management system to perform on-line:

a. Real time eligibility verification.

b. Claims data capture.

c. Adjudication of claims. Such adjudication may include the rejection or denial of claims found to be in conflict with DUR criteria. Should such rejection or denial occur during the adjudication process, the dispensing pharmacist shall have the opportunity to resolve the conflict and resubmit the claim for readjudication.

d. Assistance to pharmacists, etc., applying for and receiving payment.

2. Prospective DUR is performed using an electronic point of sale drug claims processing system.

J. K. Hospitals which dispense covered outpatient drugs are exempted pursuant to federal law from the drug utilization review requirements of this section when facilities use drug formulary systems and bill the Medicaid program no more than the hospital's purchasing cost for such covered outpatient drugs.