Our November Edition of the 5 Slide Series focuses on the 2018 election results and conveys some of the potential implications of these results regarding Medicaid expansion.
Assessment of Louisiana Medicaid’s Prescription Drug Management Performance and Preferred Drug List Policy Options
Legislation has been proposed in Louisiana to take the Medicaid preferred drug list (PDL) content responsibility away from the MCOs and shift it to a single state-determined PDL. The Menges Group assessed the impact of this policy option and estimated by transitioning to a PDL, Louisiana would experience a 13.5% increase in Medicaid pharmacy expenditures, with State Fund costs growing by $23 million in FFY2019 and $121 million across the five-year timeframe FFY2019-FFY2023. The non-financial programmatic dynamics of MCO latitude relative to a uniform Medicaid PDL are also discussed.
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.
The December edition addresses some aspects of how quality data are reported and are used in performance-based payment structures.
The June edition raises concerns with how Medicaid policymaking is currently being approached and debated. We identify specific areas where excess costs exist in the program and where considerable savings can be achieved without diminishing Medicaid’s current coverage levels.
Volume #42 of our Series identifies the number of state prison inmates in each Medicaid expansion state, and describes opportunities to deliver community re-entry care coordination support.
This edition discusses – with some input from the Health Policy Cows – some do’s and don’ts for states in implementing Medicaid MCO procurements.
This month’s edition investigates prescription drug spending in all 50 states across three major state health care payers: Medicaid, state employee health plans, and in state prisons. By comparing these expenditures to total health care spending and overall spending in each state, one gets a better idea of the relative extent of state spending on prescription drugs.
The health policy cows are back for April’s report, which presents data and opinions regarding the need to pilot-test implementing managed care in the Medicare arena in a similar manner as typically occurs in Medicaid — mandatory enrollment of beneficiaries into a small number of competitively selected MCOs.
Over 90 percent of Louisiana’s Medicaid prescriptions are paid for by MCOs. The Louisiana Association of Health Plans engaged us to assess the impacts of a potential policy change to take the preferred drug list (PDL) content responsibility away from the Medicaid MCOs and shift it to a single state-administered and state-determined PDL. Our key finding is that this policy change would be costly to the State and its taxpayers – increasing overall annual Medicaid costs by $40 million and increasing annual State Fund expenditures by approximately $15 million. Our report provides evidence across dozens of states demonstrating that a focus on optimal management of Medicaid’s drug mix at the “front end” produces more favorable net costs than an approach that relies primarily on “back end” rebate maximization.