Source: Governor’s Office of Health Transformation
On June 21, the Ohio Department of Medicaid released its first report that shows the price the state’s Medicaid managed care plans pay for prescription drugs, the amount pharmacy benefit managers (PBMs) retain to administer the program, and the amount paid to pharmacies. The report was prepared by HealthPlan Data Solutions (HDS) and is based on one year of actual pharmacy claims data.
- The spread between what was billed to plans and paid to pharmacies is 8.8%
- Independent pharmacies were paid more than CVS pharmacies for the same drugs
- Medicaid health plan PBM pricing saves Ohio taxpayers at least $145 million annually compared to fee-for-service pricing (savings increase to at least $245 million annually when revenue generated from managed care pharmacy benefit fees are included).
The Ohio Department of Medicaid says it will use this information to drive further innovation in the pharmacy benefit administration. Specifically, the Ohio Department of Medicaid will require managed care plans to notify the state of any changes they plan to make as a result of the report, and Medicaid will use the HDS report to inform the state’s process of managed care rate setting in November for calendar year 2019. The Ohio Department of Medicaid also will monitor PBM pricing quarterly and publicly report it, if at any point the quarterly review raises a concern.
For more information view the full report, the executive summary, and the Medicaid Director’s Letter.