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News & Press: National

NCPA: Kentucky, Ohio Actions Bring Greater Transparency on Medicaid Reimbursements

Friday, April 6, 2018   (0 Comments)
Posted by: Shannon Glaittli
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ALEXANDRIA, Va. (April 6, 2018) — The National Community Pharmacists Association applauds recent efforts in Kentucky and Ohio to bring much-needed transparency to the states' Medicaid managed care programs and assure taxpayer funds are being used appropriately.

The Kentucky legislature recently enacted Senate Bill 5, which establishes disclosure and contract requirements for pharmacy benefit managers – the entities that contract with managed care organizations to administer Medicaid prescription drug benefits. PBMs are the middlemen that control pharmacy payments and determine consumer costs of prescription medications. Under the Kentucky bill, a PBM must make certain disclosures, including the amount paid by the MCO to the PBM and the portion of that amount that is subsequently paid to pharmacies. The bill also gives the Department of Medicaid Services the authority to set reimbursement rates between a PBM and a contracted pharmacy, thus ensuring pharmacies are reimbursed fairly. The bill was introduced by Senator Max Wise.

In Ohio, state Medicaid officials have announced plans to investigate claims that PBMs are increasing Medicaid costs by charging the state more for prescription claims than they are reimbursing pharmacies for filling the prescriptions. Not only does this practice result in under-water reimbursements that drive community pharmacies out of business, but it allows PBMs to pocket significant amounts of taxpayer dollars. If the allegations are true, the state is prepared to hand down sanctions. The state Medicaid agency has asked all five managed care companies that contract with the state Medicaid program to provide data showing how much they paid their PBMs and how much the PBMs paid pharmacies to fill prescriptions during a 12-month period ending March 31.

"We have long known about the harm that opaque PBM practices have on community pharmacies and patient access to trusted pharmacy services," said NCPA CEO B. Douglas Hoey, Pharmacist, MBA. "And we are now beginning to see the harm they have on taxpayers' wallets as well. We salute Ohio Governor John Kasich for his pro-consumer, pro-competition leadership on this issue, as well as Kentucky Senator Max Wise for his diligence in passing disclosure legislation in that state. The transparency and information these actions provide are what the marketplace needs to help make prescription medications more affordable.

"Many states trust PBMs with taxpayer dollars because they claim to lower Medicaid costs. Now that states are more closely scrutinizing PBM practices, we will see just how dubious PBM claims may be. We have been advocating for increased transparency with respect to the PBMs' role in the drug supply chain, and are glad to see these efforts by Kentucky and Ohio to shed light on PBMs' questionable promises. We believe these efforts will protect Medicaid patients, the community pharmacies that contribute to local economies, and the public's tax dollars."

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