Virginia began implementing a Common Core Formulary within its Medicaid managed care program in 2017 for CCC Plus members and in 2018 for Medallion 4.0 members. The Virginia Association of Health Plans (VAHP) engaged The Menges Group to analyze the fiscal and programmatic impacts of this policy change. Our tabulations indicate that the change to the Common Core Formulary led to increased net (post-rebate) Medicaid costs of $13.2 million during calendar year 2019, including $5.5 million in additional state funds.
Some Virginia policymakers have indicated an interest in moving to a pharmacy “carve-out” within the Medicaid managed care program, whereby the state would instead manage the pharmacy benefit for MCO enrollees, including paying directly for drugs made available in the program. Virginia’s Association of Health Plans engaged The Menges Group to estimate the fiscal impacts of Virginia switching to a carve-out model as well as the programmatic advantages and disadvantages of this potential change. We estimate that a change to a pharmacy carve-out would result in a 20.2% increase in net (post-rebate) Medicaid pharmacy expenditures across the five year timeframe SFY2020 – 2024, increasing net state fund costs by $12 million in the first year of implementation and by $157 million over five years.
This edition of the 5-Slide Series explores how the insurance landscape has changed across four decades spanning 1980—2020 We contrasted Medicaid and Medicare enrollment trends with growth in the overall population of the United States.
Value of Managed Care Organizations and Pharmacy Benefit Managers in Managing the Medicaid Prescription Drug Benefit
PCMA engaged The Menges Group to estimate the financial and programmatic value of managing the prescription drug benefit in the Medicaid managed care setting, comparing states that utilize MCOs – who contract with PBMs – for their prescription drug benefits to states that manage their prescription drug benefits in FFS. Using Medicaid prescription drug data reported by each state to the Centers for Medicare and Medicaid Services (CMS) for all Medicaid-paid pharmacy-dispensed prescriptions, we analyzed how prescription drug costs and usage vary depending on how prevalent managed care is in each state Medicaid program. We also analyzed the drug costs and usage within specific therapeutic drug classes.
The September and October editions of our 5 Slide Series provides our tabulations and analysis of the NCQA Quality Ratings for Medicaid MCOs (September edition) and Medicare MCOs (October edition) in Rating Year 2019-2020. We looked at the national distribution of MCO ratings, calculated average ratings for large multi-state chain MCOs, and reported the highest rated plan in each state (or plans if there was a tie).
The June 2019 Edition was produced by Manisha Gupta and Mohammed Hamdan. It focuses on the level of marketing spending in the MCO industry, comparing the Medicaid, Medicare, and commercial sectors. On average, we found that Medicaid MCOs used 0.19% of their revenues on marketing, advertising, and commissions. These percentages were much higher among Medicare-dominant MCOs (2.26%) and commercial MCOs (3.43%).
America’s Health Insurance Plans (AHIP) engaged The Menges Group to assess West Virginia’s Medicaid pharmacy carve-out impacts, analyzing the findings of another consulting firm’s report. Our analyses suggest that West Virginia’s carve-out has created increased Medicaid expenditures rather than savings. We also provide a large volume of evidence from states that switched to a carve-in approach (comparing their cost per prescription progression to states that maintained their carve out model). These results, taking into account all Medicaid pharmacy claims and rebates in 13 states and across a several year comparison timeframe, compellingly indicate that the carve-in model has yielded large-scale savings relative to the carve-out approach.
This edition describes a Pop-Up Clinic founded and led by one of our employees, Nehath Sheriff. This type of construct could be a low-cost, high-value option to consider for organizations seeking to “meet underserved subgroups where they are.”
This month’s edition analyzes and compares prescription volume and drug costs in the Medicaid and Medicare Part D programs. We tabulated pre-rebate cost per prescription for each program from 2013-2017. We also analyzed trends in specialty drug volume and expenditures during the same time period for each program.
This edition assesses whether differences exist in overall economic performance that might help explain the Medicaid enrollment trend differences that were identified in our January 2019 edition of the Series. We have presented the unemployment rate progression from 2010 to 2017 by state, comparing aggregate unemployment rates across states that did and did not adopt Medicaid expansion.