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H H S Department of Health and Human Services
Health Resources and Services Administration
HIV/AIDS Programs

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ADAP Manual - 2003 Version

II.  AIDS Drug Administration Program (ADAP) Overview

3.  Coordination with Other Pharmacy Providers

Chapter Summary
Introduction

  1. Other Ryan White Programs
  2. State Medicaid Agency
  3. Private Health Insurance and State High-Risk Insurance Pools
  4. Patient Assistance Programs and Clinical Trials
  5. Other Sources of Medication
  6. References 

 Chapter Summary  TOP

This chapter discusses the need for State AIDS Drug Assistance Programs (ADAPs) to identify other pharmacy providers to assure a seamless service delivery system for clients receiving HIV/AIDS medications. Other Ryan White programs, State Medicaid offices, and Patient Assistance Programs (PAPs) work with ADAPs to provide this continuum of care.

In addition, this chapter describes the process of coordinating with Title II Health Insurance Continuation Programs (HICP) to facilitate the implementation of the Health Resources and Services Administration’s (HRSA) HIV/AIDS Bureau (HAB) Policy Number 99-01, “The Use of Title II ADAP Funds to Purchase Health Insurance.”

Introduction  TOP

State AIDS Drug Assistance Programs (ADAPs) play a vital role within a larger system of care service delivery for individuals with HIV disease. This complex network includes public and private sector organizations at the Federal, State, and local levels. Navigating and coordinating among these entities can be challenging for clients, case managers, service providers, and the entities themselves. However, as the level of expenditures and the number of individuals needing HIV services continues to increase, coordination among these programs is necessary to ensure that gaps in service are addressed and that program overlaps are minimized. For ADAPs, coordinating with other pharmaceutical providers in their State can create systems in which clients receive their pharmaceuticals in an efficient and effective manner from the proper sources.

Alternative Funding Sources: HRSA Expectations

As ADAPs seek to coordinate with other pharmacy providers and payors, it is important to consider Program Policy Notice 97-02, issued February 1, 1997, by the Health Resources and Services Administration’s (HRSA) HIV/AIDS Bureau’s (HAB) Division of Service Systems (DSS). This policy concerns the use of funds awarded under Title I or Title II of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act. In that policy, grantees are reminded that “funds received... will not be utilized to make payments for any item or service to the extent that payment has been made, or can reasonably be expected to be made...” by sources other than Ryan White funds.

At the individual client level, this means that grantees and/or their subcontractors are expected to make reasonable efforts to secure other funding instead of CARE Act funds whenever possible.

In practice, this policy requires the ADAP to identify and evaluate other potential sources of payment for pharmaceuticals for each client to ensure that the ADAP is the payer of last resort. This chapter identifies other possible pharmacy providers and payers in a State and suggests coordinating strategies for ADAPs to use when working with these entities.

Other Ryan White Programs TOP

Other Ryan White CARE Act programs work in conjunction with State ADAPs to bring people into a system of care and provide them with quality treatment and services. Some of these programs also operate drug purchasing and dispensing systems. In some instances, Title I and Title II grantees fund local pharmacy assistance programs that provide additional medications not covered on the ADAP formulary or provide medications to individuals that cannot access ADAP services. For example, a Title I or Title II pharmacy assistance program may provide medications to individuals on an ADAP waiting list or to people whose income exceeds the ADAP eligibility criteria limits. Title III, Title IV, and SPNS projects generally fund pharmacy assistance programs as an integral part of their primary care treatment and early intervention services. In all cases, coordination between the ADAP and other Ryan White programs is necessary to meet the HIV/AIDS Bureau’s principle of ensuring access to existing and emerging HIV/AIDS therapies, including new combination therapies and prophylaxis treatment for opportunistic infections. Under this principle, CARE Act programs should focus on ensuring that available treatments are accessible and delivered according to established HIV-related treatment guidelines.

State Medicaid Agency TOP

Coordination between ADAP and Medicaid, the largest provider of health care for people living with HIV/AIDS (PLWH/A), is a critical component of any ADAP management strategy. The level of cooperation between ADAPs and State Medicaid programs varies significantly across States, ranging from very high levels of collaboration on multiple issues to very limited or nonexistent dialogue between programs.

Managing the interface between ADAP and Medicaid can be a complicated process. For example, clients may transition from ADAP to Medicaid temporarily, and then transition back to ADAP during Medicaid spend-down waiting periods. An individual covered under ADAP may receive retroactive Medicaid eligibility status, and the ADAP should back-bill Medicaid for ADAP funds expended during the retroactive coverage period. Finally, an individual’s health or financial circumstances may change rapidly, potentially resulting in a change in ADAP or Medicaid eligibility status. Tracking all of these factors requires a carefully tailored and systematic approach.

In most States, the ADAP is administered through the State Health Department, and the Medicaid program is administered by a different State agency (e.g., Department of Public Welfare). In a few States however, (e.g., Connecticut, Minnesota, Pennsylvania) the ADAP and Medicaid programs are administered by the same State agency, resulting in a high level of cooperation between the two programs. Similarly, the New Jersey and West Virginia AIDS programs contract the day-to-day administration of their ADAPs to the State Medicaid program itself.

In practice, there are four general areas of cooperation between ADAP and Medicaid:

1. eligibility coordination;
2. coordination of benefits;
3. Medicaid office representation on ADAP advisory bodies; and
4. ADAP/AIDS office participation in the development of State Medicaid waivers.

Within each area, several levels of cooperation are possible. Simple cooperative strategies require a minimal level of interaction between the ADAP and the Medicaid Office; more complex strategies require a greater, sustained level of interaction. Below are several strategies that can build high levels of cooperation between an ADAP and its State Medicaid program:

  • Identifying a Medicaid Contact Person. The main prerequisite for establishing and maintaining a collaborative relationship between ADAP and Medicaid is the identification of, and ongoing communication with, a specific contact person within the Medicaid office. This person may sit on the ADAP advisory body or may simply be the point of contact within the Medicaid office. If several people staff an ADAP, it may be helpful to identify one staff person to be the Medicaid liaison.
  • Support of Departmental Leadership. Communication and collaboration at the departmental level is another important factor in establishing and sustaining cooperation between ADAP and Medicaid, especially when working on Medicaid waiver/expansion issues. While cooperation at this high echelon in the State bureaucracy is helpful, some ADAPs and Medicaid offices cooperate fully on eligibility and benefits issues without the explicit participation of departmental leadership.
  • Understanding Medicaid. Medicaid is complex and varies in many ways from State to State. Understanding the particulars of a State Medicaid program, including the eligibility determination process, eligibility categories and available benefits, will better prepare an ADAP for making contact with the program.
  • Emphasize Cost Effectiveness and Efficiency. ADAP clients often represent a very small portion of the State Medicaid caseload. This is true even when ADAP clients are among those in the Medicaid spend-down process. Some Medicaid programs may feel that it is unnecessary to collaborate on eligibility and benefits issues because the financial stake for Medicaid is relatively low. However, ADAPs have found that the overall cost effectiveness and efficiency of collaboration on these issues tends to overcome such barriers. For example, individuals who have been receiving services through ADAP and become Medicaid eligible may be healthier and, therefore, represent less cost to the Medicaid program. ADAPs also can serve as conduits for Medicaid beneficiaries who are returning to the workforce.
  • Reduce Bureaucratic Barriers and Build Linkages. Since the ADAP and Medicaid programs are generally administered by two different State agencies that may historically have different missions, there may be bureaucratic structures (and a historical lack of cooperation) that act as barriers to communication and cooperation between the two agencies. Once initial contact is established, it is important to reduce these barriers by building linkages across programs. One way this may be accomplished is for the ADAP/AIDS program to offer assistance to the Medicaid program in the form of sharing information or data, offering to convene meetings, and/or reviewing proposals of mutual interest.
  • Solicit External Support. There is significant interest in Medicaid managed care issues and HIV-related Medicaid expansion among the community and private foundations. Carefully soliciting the support of the community and foundations has been useful in helping several AIDS programs increase the level of cooperation on these issues between themselves and the State Medicaid office.

 Private Health Insurance and State High-Risk Insurance Pools  TOP

On January 6, 1999, HAB released HAB Policy Notice 99-01, “The Use of Title II ADAP Funds to Purchase Health Insurance.” Under this policy, ADAP earmark funds (and other ADAP designated funds) can be used to purchase health insurance for ADAP clients. These health insurance policies must include access to comprehensive primary care services and, at a minimum, include coverage for medications that are equivalent to the State’s ADAP formulary. ADAP dollars may be used to cover any costs associated with the health insurance policy, including co-payments, deductibles, or premiums to purchase or maintain insurance policies.

 In order to implement this policy, State ADAP programs must provide the HAB with the methodology used by the State to: (1) assure that they are buying health insurance that, at a minimum, includes pharmaceutical benefits equivalent to the Title II ADAP formulary; and (2) assess and compare the cost of providing medications through the health insurance option versus the existing ADAP program.[1]

States that are considering using ADAP funds to purchase health insurance may want to use the following model for planning, implementation, and evaluation:

  • Establish program philosophies and priorities in conjunction with the State HIV or ADAP community advisory group(s). For example, one State ADAP’s priorities are:
1. the long-term fiscal stability of the program; 
2. protecting the doctor/patient relationship and treatment choices; 
3. expansion of the formulary; and 
4. expansion of program financial eligibility criteria.
  • Conduct an inventory of the coverage and costs of local health insurance plans and State laws governing the health insurance market. Questions to ask may include:
 1. Does Title I or Title II fund an insurance continuation program? [2]. Is there a State high-risk insurance pool that individuals with HIV disease can access? [3] . Are there qualified HIV/AIDS providers on the preferred provider list for potential health insurance policies?
  • Assess the overall budgetary impact of moving clients onto insurance. The ADAP may want to perform a cost comparison using average client costs from the current ADAP program compared to average premium and supplementary costs for the State’s existing insurance purchase program under other sections of Title II, if such a program exists. The insurance cost estimate can also use information from the health insurance plans that the ADAP expects its patients to use.
  • Build relationships with the administrators of the State high-risk pool, case managers, key consumer groups, advocates, and other stakeholders. This will facilitate the creation of partnerships with individuals who are integral to the success of an ADAP’s health insurance initiative.
  • Design the program. This may include modifying the original ADAP enrollment form to cover both traditional ADAP enrollment and the health insurance component. Expansion of the ADAP’s data system may also be necessary to track information on both insurance and drug purchases.
  • Create or modify the drug purchase and dispensing system so that it can interact with health insurance payers. Ideally, the dispensing pharmacy will be able to “split bill” for each prescription (e.g., bill 80 percent of the cost of the drug to an insurance plan and 20 percent to the ADAP).
  • Finally, evaluate and measure the cost effectiveness of the ADAP purchasing health insurance. A simple formula to begin with is: [cost of the monthly premium x 12 months] = [annual premium cost for an insurance policy + (annual out-of-pocket maximum) or (stop loss amount)] versus the annual average per client expenditure for medicines by the ADAP. For example, if a policy cost [$300 x 12] = [$3600 + ($2,000 out-of-pocket maximum)], then the annual cost is $5,600. The ADAP would then compare the $5,600 insurance cost to its average annual cost of providing medications per client. It is important for the ADAP to remember that the assurance of cost neutrality is required for the aggregate cost of the health insurance program, not for each participating individual.

Individual vs. Aggregate Example

Client
Cost of Purchasing Drugs Through ADAP
Cost of Health Insurance
A
$12,000
$10,000
B
$20,000
$10,000
C
$6,000
$10,000
Total
$38,000
$30,000

Although the cost of health insurance for Client C exceeds the cost of purchasing drugs directly, the total cost of purchasing health insurance is less than the cost of purchasing drugs through the ADAP.

Prior to the release of this policy, Federal ADAP earmark funds could not be used for the purchase or continuation of any health or pharmacy insurance benefits. However, historically, some ADAPs have had clients with third-party insurance coverage.2 Often these ADAPs operate some type of insurance recovery program. These include ones in which the ADAP’s pharmacy will split bill the prescription, the ADAP would be billed for 100 percent of the prescription and would then bill the insurance company for their portion of the claim (“pay and chase”), or the ADAP would have the client assign the insurance benefits directly to the ADAP. In other States, CARE Act dollars and State funds are used to pay health insurance co-payments and deductibles for eligible CARE Act clients (low-income individuals only). In addition, several States access State high-risk insurance pools for their HIV-positive population.

For more information on the use of CARE Act funds to purchase health insurance for people with HIV/AIDS, see HRSA’s “Directions in HIV Services Delivery & Care,” A Policy Brief, Number 4, Reducing Barriers to Care.

 Patient Assistance Programs and Clinical Trials  TOP

Patient Assistance Programs (PAPs) are sometimes available to clients who fail to qualify for ADAP or who are on ADAP waiting lists. Funded and operated by HIV pharmaceutical manufacturers on a State-by-State basis, PAPs are short-term sources of treatment assistance, either free of charge or at a nominal charge. These programs are available to eligible, financially disadvantaged patients in order to help them get necessary prescriptions or maintain an existing regimen until another option is available. Eligibility requirements vary, and clients usually require assistance from a doctor, patient advocate, case manager, or ADAP staff person to apply. Also, pharmaceutical companies that make treatments, including new investigational drugs available for the same group, sponsor “compassionate use” programs.

In a similar manner, clinical trials offer individuals with HIV disease access to other potential life-saving therapies. Clinical trials are Food and Drug Administration (FDA) approved, controlled experiments of investigational agents or treatments. Pharmaceutical manufacturers and the government typically pay for these trials. In some States, the ADAP routinely provides information on current and upcoming clinical trials to their clients. Other ADAPs assist the client in applying for acceptance in a clinical trial. Local case managers also serve as client linkages to clinical trials.

 Other Sources of Medications  TOP

The following programs may also be potential sources of medications for individuals with HIV disease:

  • Veterans Affairs;
  • Department of Defense (active duty, retirees, and dependants);
  • Indian Health Service;
  • Department of Corrections (Federal, State, and local);
  • Medicare;
  • non-Federal public funds (city, county or State funds); and
  • private foundations, clinics, and other donors.

Because each State is unique, the ADAP will need to assess which of these entities are feasible and appropriate as potential providers of pharmacy services. An ADAP with a thorough pre-screening process for ADAP services will identify as many pharmacy providers as possible that the client can access. As a reminder, ADAP funds, like all CARE Act dollars, should be used as the payer of last resort when other payer sources can be reasonably expected to make payments for any item or service.

 References TOP

Sources for This Chapter

HRSA, HAB, Division of Service Systems. ADAP and Private Insurance: Coordination of Benefits, Pay and Chase Strategies, and State Insurance Pools. AIDS Drug Assistance Program Technical Assistance conference call report. Rockville, MD: U.S. Department of Health and Human Services, February 26, 1997.

HRSA, HAB, Division of Service Systems. Coordination Strategies Between State ADAPs and Medicaid. Rockville, MD: U.S. Department of Health and Human Services, 1998.

HRSA, HAB, Division of Service Systems. Program Policy Notice 97-02, “Allowable Uses of Funds for Discreetly Defined Categories of Services.” Rockville, MD: U.S. Department of Health and Human Services, 1997.

HRSA, HAB, DSS. Program Policy Notice 97-02.3, “Clinical Trials for Eligible Individuals.” Rockville, MD: U.S. Department of Health and Human Services, 1997.

HRSA, HAB, Division of Service Systems. Program Policy Notice 99-01, “The Use of Title II ADAP Funds to Purchase Health Insurance.” Rockville, MD: U.S. Department of Health and Human Services, 1999.

HRSA, HAB, Division of Service Systems. The Use of Title II Funds to Purchase Health Insurance. AIDS Drug Assistance Program Technical Assistance conference call report. Rockville, MD: U.S. Department of Health and Human Services, January 20, 1999.

HRSA, HAB, Office of Policy and Program Development. Directions in HIV Service Delivery & Care, A Policy Brief, Number 4, Reducing Barriers to Care. Rockville, MD: U.S. Department of Health and Human Services, 2000.

Health Insurance Portability and Accountability Act. Statutes at Large, 1996.

Ryan White Comprehensive AIDS Resources Emergency (CARE) Act. Statutes at Large, 1990, as amended in 1996 and 2000.

Notes

[1] HAB Program Policy 99-01.A.4 requires a demonstration of cost neutrality: the total amount spent on insurance premiums cannot be greater than the annual cost of maintaining that same population on the existing ADAP program.

[2] The Health Insurance Portability and Accountability Act of 1996 established new rules for group and individual health insurance markets to allow individuals to move from coverage to coverage without having to meet a new preexisting condition exclusion at each change. Under the law, a preexisting condition exclusion may generally not be imposed for more than 12 months (18 months for a late enrollee). This 12-month (or 18-month) exclusion period is reduced by prior health coverage. Moreover, under the Act, Medicaid is treated as any other insurer. As such, a person with HIV/AIDS who has been on Medicaid and is returning to work receives credit towards the private health insurance’s waiting period for the time the individual spent on Medicaid.

[3] DSS Program Policy Notice 97-02.3, “Clinical Trials for Eligible Individuals,” provides that “Funds awarded under Title I or II [base funds] of the CARE Act may not be used to support the costs of operating clinical trials of investigational agents or treatments (to include administrative management or medical monitoring of patients). Funds may be used to support clinical costs (exclusive of pharmaceuticals) of expanded access or compassionate use programs where effi cacy data exist and where the FDA has authorized such expanded use. Funds may also be used to support participation in clinical trials, and in expanded access and compassionate use programs.”