D-3.1.1. Begins Day 1

Clinician-administered drugs (CAD) or biologicals, also known as physician-administered drugs, are injectable medications given in an office or outpatient clinic setting when oral medications are inappropriate. CADs may be reimbursable as a medical benefit through Medicaid. HHSC reviews newly-released Healthcare Common Procedure Coding System (HCPCS) codes for CADs and biologicals. If VDP pharmacists determine the CAD is appropriate for Medicaid, then the HCPCS codes are presented at a rate hearing as part of the process to become a benefit.

A COI application is not necessary for staff to initiate a review of the drug. HHSC's review of any new CAD does not guarantee the new CAD will become a benefit. HHSC follows the following steps to approve CADs after FDA approves the drug and assigns the NDC:

  1. The drug manufacturer signs a rebate agreement with CMS. Once the drug is identified on the CMS rebate file, HHSC begins a clinical and fiscal review for providing the drug benefit.
  2. The drug manufacturer submits an application to CMS for the assignment of an HCPCS code. Once assigned, Texas Medicaid receives the newly-created HCPCS code on the quarterly CMS file.
  3. Medicaid works with HHSC Rate Analysis to determine the fiscal impact and assign a rate to the drug through the interim process.

D-3.2. Determining Drug Price and Rebate Amount

HHSC pharmacists research the proposed reimbursement and rebates rates and provide the data to PFD to develop the drug's fiscal estimate. The pharmacist utilizes drug reference and pricing compendia to suggest reimbursement rates, unit rebate amounts, and related treatment costs.

D-3.3. Estimating Utilization

HHSC pharmacists identify utilization data to develop the estimate. When a more complex analysis is needed, the pharmacist submits a Benefits Management Review (BMR) Request to the HHSC Center for Analytics and Decision Support (CADS). CADS research specialists estimate the number of people who may potentially use the drug by doing the following:

  1. Using claims and encounters history to determine possible population
  2. Estimating population on the VDP-provided diagnosis codes, comparable procedure codes, and NDCs or related studies
  3. Referring to other sources as needed to gather additional information to provide a population estimate

D-3.4.1. Ends Day 30

PFD staff will estimate the drug's first-year fiscal impact. The PFD analyst:

  1. Determines the drug's pricing methodology
    1. Refer to TAC Section 355.8085 (Subchapter J: Reimbursement Methodology For Physicians And Other Practitioners)
  2. Determines the drug's estimated cost in the first year:
    1. For drugs utilized by new client populations, then the cost estimates are determined using drug dosing and administration guidelines.
    2. For drugs shifting from a currently covered drug, then the cost estimates are based on the currently-covered drug's utilization.
  3. Calculates the Federal Financial Participation and estimated General Revenue (GR) cost by multiplying the estimated first-year cost by the Federal Medical Assistance Percentages (FMAP).

D-3.5.1. Ends Day 90, as Needed

Based on the amount of a drug's estimated fiscal impact:

  1. PFD staff determine if the drug's coverage requires a notification or approval letter to LBB.
  2. VDP drafts the notification or approval letter using fiscal impact estimates determined by PFD.
  3. Actuarial Analysis staff review the drug's risk status and whether the drug will impact the managed care capitation rate. Staff will include this information as part of the notification or approval letter.
  4. PFD schedules the letter for review by HHSC Executive Leadership before sending it to LBB.