CHA News

DHCS Reminds Health Plans of Responsibilities Post-Medi-Cal Rx

For CEOs, CFOs

This post has been archived and contains information that may be out of date.

As previously shared, the Department of Health Care Services (DHCS) transitioned all Medi-Cal managed care outpatient pharmacy services billed on pharmacy claims to the fee-for-service (FFS) delivery system on Jan. 1 — the much-anticipated implementation of Medi-Cal Rx.  

Following the transition, many hospitals shared concerns with CHA that Medi-Cal managed care plans (MCPs) were effectively transitioning all outpatient pharmacy responsibilities to Medi-Cal Rx, including those pharmacy benefits billed on medical and institutional claims — which was not the proposed policy from DHCS. 

Last week, DHCS sent the following notice to the plans to remind them of their obligation to still cover outpatient drugs that are part of a medical claim. Hospitals receiving direction from Medi-Cal MCPs that is contrary to this guidance should share their concerns directly with DHCS at 

This communication is to remind Medi-Cal Managed Care Plans (MCPs) of their obligations to provide access to physician administered drugs (PAD) which are prescription drugs administered by a health care professional in a clinic, physician’s office, or outpatient setting. 

MCPs who have excluded prescription drugs that were formerly available through the medical benefit or have directed their subcontractors or network providers to no longer bill for prescription drugs through their medical claims should take immediate action to reinstate coverage for PADs.  

DHCS has received concerning reports of denials or impeded access to specific drugs such as chemotherapeutic agents, anti-rejection medications for organ transplants, and long-acting contraceptives. Many of the drugs administered by clinicians in medical settings are unavailable in most standard pharmacies or specialty pharmacies. Therefore pharmacies are not able to bill for PADs through Medi-Cal Rx and directing members to go to their pharmacy to obtain PADs is not appropriate.  

The Medi-Cal FFS delivery system makes all medically necessary prescription drugs -administered in an outpatient office or clinic setting by a health care professional – available through the medical benefit. DHCS’ intent was to ensure the Medi-Cal managed care members have the same access to these prescription drugs as Medi-Cal FFS members when establishing the scope of benefit for Medi-Cal Rx.  

MCPs are required to not carve-out but instead retain PAD as a medical benefit, even though some may also be available as a pharmacy benefit when it is medically appropriate. In certain select cases, when medically appropriate, DHCS may ALSO authorize a pharmacy to dispense and bill for PADs. However, this is an exception and this flexibility is not intended to replace coverage of PAD as a medical benefit. These prescription drugs always remain a medical benefit even when they are also available as a pharmacy benefit. 

DHCS sent out a survey to MCPs yesterday asking about your current policies related to PADs. However, this communication is to clarify existing requirements. DHCS will also review our policies for consistency and make any necessary updates for clarity. 

Thank you, 

Department of Health Care Services