Single Source Procurement: EPIC, NYS Senior Prescription Program
Pursuant to New York State Finance Law § 163.10(b), The New York State Department of Health is presenting the following summary of relevant circumstances, and material and substantial reasons why a competitive procurement was not feasible.
The Department of Health requested and received approval to extend the existing Department of Health contract, #C019442, with Magellan Medicaid Administration, Inc. (MMA) through March 31, 2017, or sooner if all applicable functions are implemented under current and pending competitive procurements. This current contract expired on March 31, 2015 and provides Pharmacy Benefits Management (PBM) services to support the:
- Elderly Pharmaceutical Insurance Coverage (EPIC) program;
- American Indian Health Program (AIH) prescription drug coverage component for seven of the American Indian Nations in New York State; and
Under this contract, MMA provides administrative support for all of these programs and receives significant rebate revenue from drug manufacturers.
As noted above, the NYPS program ended effective June 1, 2015. Therefore, for NYPS, this contract extension would cover the months of April 2015 and May 2015, and associated run out costs.
Considering the expiration date of the current EPIC contract, it is neither feasible nor cost-effective to craft and process a competitive procurement for interim services. Maintaining current EPIC services for an additional twenty four months is necessary to allow the Department time to implement services with the new MAS contractor and/or the pending procurement for OHIP's pharmacy rebate programs, so as not to jeopardize the collection of drug rebates or patient care.
The extension of the Magellan contract is aligned with the Department's strategic business decision to incorporate the functions of all programs managed and administered by this contract into other procurements, as described in the Justification section below.
There are two significant factors driving this waiver request:
- the implementation of the MAS contractor, which includes major components of EPIC and AIH pharmacy program administration, such as claims processing, customer service and prior authorization; and
- the impending Drug Rebate Administration procurement, through which the Department will seek to acquire services for administration of all drug rebate programs currently managed by OHIP.
The MAS: The MAS RFP has been awarded with an official contract start date of May 1, 2015. This will replace the existing Medicaid Management Information System (MMIS), known as eMedNY, currently provided through a contract with Computer Sciences Corporation (CSC). The MAS contract will include all fee-for-service Medicaid services provided by eMedNY (claims processing, benefit administration, fiscal agent services, program integrity, provider management, etc.) and some non-Medicaid health program administration not currently provided by eMedNY (EPIC, AIH Services). All non-rebate related functions currently administered in the current EPIC contract are included in the MAS procurement. Functions to be assumed by the MAS contract are not scheduled until February 1, 2016.
The Drug Rebate Administration Procurement: OHIP is seeking to competitively procure services for the administration of all currently operated drug rebate programs.
Drug rebates are a significant component of all the programs included in this waiver request, through which the State realizes approximately $1.2 billion in total annual revenue as a result of rebates earned from Medicaid EPIC program drug expenditures. It is imperative that current processes continue without interruption until such time as a new vendor is in place.
A procurement is being developed to issue a Request for Proposal to procure services to administer rebate related functions. Because of the potential risk of lost revenue, the Drug Rebate Administration Procurement will be aligned with the MAS implementation so that the collection of rebates is not jeopardized. Rebate functions are scheduled for April 1, 2017, under this RFP.
As such, an extension to the EPIC contract is needed through March 31, 2017 for the rebate component of the contract. The EPIC component of the current contract would be extended through January 31, 2016 to bridge the gap through the start of the MAS contract. Should implementation not begin by February 1, 2016, the DOH also requests approval to extend this component of the contract at existing rates.
| Procurement / Program Name | EPIC, NYS Senior Prescription Program |
|---|---|
| Contractor Name(s) | Magellan Medicaid Administration, Inc |
| Contract Period | 4/01/2015 – 3/31/17 |
| Contract Number(s) | C019442 |
