Pharmacy Service Changes to Upcoming Michigan Managed Care Request for Proposal

Contact: Jennifer Smith 517-241-2112

For Immediate Release: February 12, 2015

LANSING, Mich. – The Michigan Department of Community Health (MDCH) today announced changes in the new upcoming request for proposal (RFP) for the Comprehensive Health Plan Contract for Michigan’s Medicaid Health Plans. The Comprehensive Health Plan Contract provides health care services to Michigan’s Medicaid managed care beneficiaries, and is being rebid during fiscal year 2015 for new contracts beginning in fiscal year 2016. 

Pharmacy services that have been covered by the Medicaid Health Plans in the past will now be carved out within the new contract. The present arrangement with a mix of Fee-for-Service (FFS) and managed care formularies adds administrative costs and complexities that can be simplified with a single formulary with fewer administrative layers.  This new approach will require coordination between the contracted pharmacy entity and the Medicaid Health Plans.

Currently, each Medicaid Health Plan has their own formulary for covering drugs. During the rebid stakeholder input process, numerous stakeholders indicated that the current system of multiple formularies has been a challenge for providers and consumers. Through this new approach, Michigan will be going from multiple formularies to one. Additionally, some drugs are covered by FFS due to limitations in state law, but will now be a direct carve out managed by one entity.

Beginning on January 1, 2016, with the start of the new health plan contracts, all pharmaceutical services for Michigan Medicaid beneficiaries will no longer be the responsibility of the Medicaid Health Plans and will be contracted through a single contracted pharmacy entity. This change will result in cost savings through increased pharmaceutical rebates and administrative efficiencies at the state level and will also result in significantly streamlined administration for Michigan’s health care providers. 

The state also plans to procure Medicaid dental services for adults, including those covered by the Healthy Michigan Plan, through a new statewide managed care contract that will be competitively procured following the Medicaid Health Plan rebid and will begin July 1, 2016. 

Michigan recently announced changes to the RFP service area locations and requirements, as well as a new Medicaid coverage group and the rebid timeline. Michigan's Prosperity Regions will be used for this bid. The state also intends to convert its current Children's Health Insurance Program (CHIP) program, called MIChild, from a stand-alone CHIP program to a Medicaid expansion group.  This change is contingent on approval by the Centers for Medicare and Medicaid Services (CMS).

The RFP will be released by May 1, 2015, with responses due in August of 2015. Current contract end dates have been extended from September 30, 2015 to December 31, 2015. New contracts as a result of the rebid will begin January 1, 2016.

Questions regarding this pre-bid announcement may be sent by email no later than February 27, 2015 to Kristi Broessel at broesselk@michigan.gov. All questions that MDCH receives in response to this announcement and responses will be posted on our website for easy reference by all potential bidders.

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