Currently, Louisiana includes (carves in) the pharmacy benefit in its capitated contracts with Medicaid MCOs. During FFY2017, Louisiana had the nation’s most favorable Medicaid generic dispensing rate at 90.9% and the nation’s 8th best (lowest) cost per prescription. The Menges Group analyzed the impact of legislation proposing a carve-out of the prescription drug benefit. Based on our analysis, transitioning the Medicaid prescription drug benefit back to fee-for-service would be costly for the Medicaid program and Louisiana’s taxpayers. We estimate that Louisiana would experience a State Fund cost increase of $69.3 million in FFY2019 and $395 million across the five-year timeframe FFY2019-FFY2023. Our report also discusses the programmatic advantages of preserving the pharmacy carve-in model.
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