Overview of the Office of Medicaid (MassHealth)—Review of Claims Paid for Pharmacy Drugs

This section describes the makeup and responsibilities of the Office of Medicaid (MassHealth)—Review of Claims Paid for Pharmacy Drugs.

Overview

Under Chapter 118E of the Massachusetts General Laws, the Executive Office of Health and Human Services (EOHHS), through the Division of Medical Assistance, administers the state’s Medicaid program, known as MassHealth. MassHealth provides access to healthcare services for approximately 1.9 million eligible low- and moderate-income children, families, seniors, and people with disabilities annually. In fiscal year 2017, MassHealth paid healthcare providers more than $15 billion, of which approximately 50% was funded by the Commonwealth. Medicaid expenditures represent approximately 39% of the Commonwealth’s total annual budget.

Drug prescriptions are orders written by state-licensed prescribers and filled by state-licensed pharmacies. During the period January 1, 2015 through June 30, 2017, MassHealth paid pharmacies approximately $1,716,217,958 for 43,579,259 claims for non-compounded drugs prescribed and provided to 1,015,227 MassHealth members, as detailed below.

Payments for Non-Compounded Drugs Prescribed to MassHealth Members

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Calendar Year	MassHealth Payments	Number of Claims	Members Served
2015	$669,954,587	17,299,891	704,018
2016	672,264,324	17,212,727	655,169
2017 (through June 30)	373,999,047	9,066,641	519,494
Total	$1,716,217,958	43,579,259	1,015,227*

*    This is the unduplicated total number of members served.

MassHealth Pharmacy Program

The MassHealth Pharmacy Program is administered by Commonwealth Medicine, a division of the University of Massachusetts Medical School, pursuant to an Interdepartmental Service Agreement (ISA)³ that EOHHS entered into on behalf of MassHealth. Under the ISA, Commonwealth Medicine oversees MassHealth’s pharmacy drug policy and benefits, including evidence-based, clinically appropriate, and cost-effective drug therapies for MassHealth members. It also conducts federally required reviews of drug use, processes prescription orders that require MassHealth approval before the drugs can be dispensed, manages the list of MassHealth-approved drugs, provides informational bulletins to providers, and staffs a call center. Commonwealth Medicine also manages the Pharmacy Online Processing System (POPS), which is provided under contract with Conduent State Healthcare LLC (formerly Xerox State Healthcare LLC) and is MassHealth’s system for processing pharmacy drug claim data. Commonwealth Medicine also provides a billing guide to pharmacies that submit electronic prescription drug claims to MassHealth for payment.

MassHealth Drug List

MassHealth pays only for prescribed drugs that have been approved by the US Food and Drug Administration, including certain over-the-counter drugs. Prescription orders must meet MassHealth requirements. To assist providers, MassHealth maintains the MassHealth Drug List (MHDL), an alphabetical, interactive Web-based list of common prescribed drugs eligible for payment by MassHealth. The MHDL also includes therapeutic class tables,⁴ each of which includes brand names and generic names for drugs, their therapeutic uses, clinical notes, and criteria for drugs that need prior authorization.

Pharmacy Drug Process

To treat, and supply drugs to, MassHealth members, prescribers and pharmacies must be MassHealth-approved providers. Before a drug is dispensed, pharmacies must ensure that a prescription is valid. Each pharmacy uses its own data system to validate MassHealth member eligibility, record prescription orders, track the number of times each drug is dispensed, and submit electronic claims to POPS to be processed for payment.

3.    An ISA is the contract that documents the business agreement between two state departments within any branch of state government, pursuant to Section 6 of Title 815 of the Code of Massachusetts Regulations.

4.    A therapeutic class is a set of drugs, such as antihistamines or cardiovascular agents, used to treat the same disease or condition.

Date published:	August 29, 2019