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COUNTY OF SAN MATEOInter-Departmental Correspondence |
Health Services Agency and Department of Hospital and Clinics |
DATE: |
May 1, 2002 |
BOARD MEETING DATE: |
May 21, 2002 |
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TO: |
Honorable Board of Supervisors |
FROM: |
Margaret Taylor, Director of Health Services |
Nancy Steiger, Director of Hospital and Clinics |
SUBJECT: |
Agreement with MedImpact Healthcare Systems, Inc. |
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Recommendation |
Adopt a resolution authorizing the President of the Board to execute an agreement with MedImpact Healthcare Systems, Inc. to provide pharmacy benefit management services for clients in Mental Health and in Hospital and Clinics. |
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Background |
A pharmacy benefit management (PBM) program is a service that manages the pharmacy benefits of an organization by establishing relationships with a network of community pharmacies to provide cost effective and accessible services. Following the first Request for Proposals (RFP) issued in October 1997, MedImpact Healthcare Systems, Inc. was selected to provide the pharmacy benefits management services for the period August 1, 1998 through June 30, 2000. Your Board later approved extension of this term by one year. |
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Discussion |
A new RFP was issued in August 2001 to select a PBM provider. Proposals were received from four qualified vendors, Prescription Solutions, MedImpact Healthcare Systems Inc., RAmerica, and Pharmaceutical Care Network. After an extensive review and selection process, MedImpact Healthcare Systems, Inc. has been selected as the vendor of choice because of their experience and success in providing this type of service, as well as competitive pricing. Health, Hospital and Clinics, and I.S.D. staff reviewed the proposals. |
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MedImpact Healthcare Systems, Inc. has agreed to provide the following services: an extensive network of community pharmacies, including all the traditional independently-owned pharmacies that have served mental health clients; a member eligibility service that will insure that all of the clients referred by the agency are served; a physician eligibility list that will keep up-to-date records of all the authorized prescribers in the county; maintenance of a database of all the medications authorized to be dispensed under this program; benefit administration, which allows the County to define what the requirements are by program; and data reporting so that the agency is able to track what medications are being prescribed and dispensed to which patients. |
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The PBM will serve indigent mental health clients and mental health Medi-Cal clients served by the Mental Health Plan. The PBM will also serve indigent clients currently served by the Department of Hospital & Clinics satellite clinics, such as Fair Oaks, Belle Haven, etc. These clients currently belong to the WELL Program, and as part of those services they will be able to have a prescription filled at a local community pharmacy as well as at the San Mateo County General Hospital pharmacy, substantially improving their access to pharmacy services. |
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County Counsel and Risk Management have both reviewed and approved the agreement. |
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Vision Alignment |
The agreement with MedImpact Healthcare Systems, Inc. keeps the commitment to Ensure Basic Health and Safety for All and goal number 8: Help vulnerable people-the aged, disabled, mentally ill, at risk youth, and others- achieve a better quality of life. The agreement contributes to this commitment by providing a pharmacy benefits management service that enables San Mateo County Mental Health and Hospital and Clinics clients to receive cost effective and accessible pharmacy services. |
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Fiscal Impact |
The term of this agreement is from July 1, 2002 through June 30, 2005. |
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The contract maximum is for $61,055,978, for a three-year period. Of this total $51,533,400 represents drug costs for Mental Health clients. The drug costs for the Well Program are $9,522,578. Drug costs are based on rates negotiated with the PBM that reflect competitive industry rates for prescriptions. These rates are approximately 12% lower than the rates that would be currently paid by Mental Health Services for direct retail pharmacy services. |
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The $14,075,000 anticipated for FY 2002-03 Mental Health programs has been included in the recommended Mental Health Services budget for FY 2002-03. Reimbursement through Federal and State Medi-Cal will be $12,100,311. Of the remaining $1,974,689 Mental Health pharmaceutical costs, sales tax provided through realignment will cover 82% or $1,619,245. The net County cost for Mental Health pharmacy costs is $355,444. Projected costs for FY 2003-04 and FY 2004-05 are $16,978,312 and $20,480,088, respectively, and will be subject to available funding. Additional cost reductions through drug cost rebates are anticipated. |
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A total of $2,567,840 for the WELL Program PBM is included in the recommended Department of Hospital & Clinics budget for FY 2002-03. In addition, the 340 B program implementation is planned for FY 2002-03, which is expected to reduce long-term pharmaceutical expenditures and PBM costs. Projected costs for FY 2003-04 and FY 2004-05 are $3,132,765 and $3,821,973, respectively, and will be subject to available funding. |