Tag: Policy
The purpose of this study is to assess the impacts of Kentucky’s Medicaid managed care program. The key components of this assessment include:
• Cost impacts of the Medicaid managed care program across the past two decades
• Performance on key quality measures
• Opioid and medication-assisted treatment (MAT) prescription drug usage trends
• Kentucky’s recent experience with COVID-19 vaccinations
• Minimum contract requirements for managed care organizations (MCOs) to participate in Kentucky’s Medicaid program
• Competitive procurement dynamics
The New Jersey Association of Health Plans enlisted the Menges Group to evaluate New Jersey’s Medicaid prescription drug costs and assess the potential impacts of a pharmacy carve-out approach, whereby the prescription drug benefit would be removed from the MCOs’ responsibility and paid for in the fee-for-service (FFS) setting. We also assess the impacts of two potential policy changes, including maintaining MCO responsibility for the prescription drug benefit but requiring the use of the same preferred drug list (PDL) and MCOs’ mandatory use of a single Pharmacy Benefits Manager (PBM) subcontractor.
We estimate that carving pharmacy benefits out of the MCO benefit package will cost the State of New Jersey $51 million in the first year, with cumulative state costs across the first five years of the carve-out totaling $454 million. Additionally, we find that due to a weakened ability to manage drug mix at the “front end,” moving to a uniform DHS-driven PDL will cost the State of New Jersey $3 million in the first year, with cumulative state costs across the first five years totaling $26 million. Finally, our analyses show that a policy approach of requiring all MCOs to use the same PBM is also unlikely to yield savings.
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.
Policymakers are considering moving Medi-Cal to a pharmacy “carve-out” – that is, shifting the pharmacy benefit out of managed care to instead be administered by the state in fee-for-service (FFS). The carve-out proposal is motivated, in part, by the potential for the state to collect more drug manufacturer rebates. This report, commissioned by Local Health Plans of California, provides strong evidence that a pharmacy benefit carve-out will not achieve its intended cost savings and will have an adverse impact on the integrated, whole-person approach to care the Medi-Cal program has embraced.
The Pennsylvania Coalition of Medical Assistance MCOs engaged The Menges Group to estimate the fiscal impacts of switching to a uniform PDL in Pennsylvania and to assess the programmatic advantages and disadvantages of this policy change. Our analyses indicate that the Commonwealth of Pennsylvania and its taxpayers would incur significant costs if Pennsylvania adopts a uniform, state-determined Medicaid PDL. The state fund cost of this policy change is estimated at $81 million in the first year (FFY2020) and $442 million across the five-year timeframe FFY2020 – FFY2024. The programmatic dynamics of switching to a uniform PDL are also unfavorable. We encourage Pennsylvania policymakers to preserve the PDL latitude model within HealthChoices.