By Melissa Patrick
Kentucky Health News
State Rep. Danny Bentley didn't mince words when he told a health advocacy group that a priority of the next legislative session will be to deal with pharmacy benefit managers' Medicaid payments to drug stores.
Bentley, a Republican from Russell in Greenup County, said the problems are so bad that pharmacies say they threaten their survival -- an issue that several other states have also prioritized.
"I'm ready to do away with all of them," he said, adding later, "PBMs are not honest, period."
In his effort to explain what PBMs do, Bentley first noted that he had dealt with them for 44 years as a registered pharmacist and then said, "Really, they don't do anything," adding that one of the main issues with them is their lack of price transparency and the lack of legislation to require them to be so.
PBMs are the middlemen between insurers and drug manufacturers. They determine what drugs are offered, how much someone pays for the drug and the payments to pharmacists.
Bentley was speaking as part of a legislative panel titled, ""Preparing for the 2020 General Assembly" at the Oct. 11 Kentucky Voices for Health annual meeting in Lexington.
Lawmakers have been working on this PBM issue for years and it looks like they will continue to do so in the upcoming 60-day session that begins Jan. 7.
Most recently they passed Senate Bill 5 in the 2018 legislative session, which puts the Department of Medicaid Services, rather than managed-care organizations, in charge of setting pharmacists' reimbursement rates. It also allows the department to regulate contracts between the MCOs, pharmacists, and PBMs; requires more transparency in how PBMs in Kentucky spend the $1.7 billion a year they get for processing prescriptions; and gives the state authority to penalize the MCOs and PBMs for noncompliance.
In a report earlier this year, "Medicaid Pharmacy Pricing: Opening the Black Box," the state said two PBMs kept $123.5 million last year from the Medicaid program by paying pharmacies a lower rate to fill prescriptions, while charging the state more for the same drug.
Kentucky's Medicaid Commissioner Carol Steckel assured members of the Medicaid Oversight and Advisory Committee in July that the state was committed to resolving the payment issues between the PBMs, which she referred to as "predators," and the state's independent pharmacies. The state is currently negotiating contracts with the MCOs, which will take effect in July 2020. PBMs are hired by MCOs to oversee their drug benefits.
The attorney general's office is also investigating whether PBMs have overcharged the state and discriminated against independent pharmacies.
Ohio is one of the states that has tried to rein in the questionable payment practices of its PBMs. Last year, a report found that two Ohio's PBMs "billed Medicaid $244 million more in a single year than they paid pharmacies, allowing them to profit three to six times the industry standard," Catherine Candisky and Darrel Rowland report for The Columbus Dispatch.
In response, Medicaid officials in Ohio, among other things, banned "spread pricing," in which a PBM keeps the difference between what it bills Medicaid for medications and what it pays the pharmacy to dispense the drugs, and implemented a "pass-through" pricing model, which requires PBMs to pay pharmacies the same amount they bill the state.
A new Ohio analysis shows that this new model "netted an additional $38 million, a 5.7% increase, in the rates paid pharmacies to fill prescriptions during the first quarter of this year compared with the final quarter of last year," reports the Dispatch.
The state Medicaid department in July told lawmakers that one of the proposed changes in Kentucky's new MCO contracts is to require all PBMs to use a "pass-through model" of payment.
Other states have also fired their PBMs. Michigan's Medicaid program has proposed to fire its' PBMs and to manage its drug program itself starting Dec. 1, which is expected to save the state $40 million; California will shift all Medicaid drug benefits away from PBMs by 2021; and West Virginia fired its PBM in 2017, Axios reports.
Commissioner Steckel said in July that DMS was using Kentucky data to replicate a West Virginia study showing the impact of removing pharmacy services from MCOs, which is what the state's pharmacists' lobby and many legislators would like to see happen. The West Virginia study found that the state saved $54 million by removing prescription drugs from Medicaid managed care.
Sen. Ralph Alvarado, the lieutenant governor candidate with Gov. Matt Bevin, did not participate in the panel, but spoke to the group briefly before it started. He said if the state's analysis looks like it will make sense from a monetary perspective to remove pharmacy services from the MCOs, "you can expect that to be brought back in [house]."
Also on the panel were Rep. Joni Jenkins and Sen. Morgan McGarvey, Democrats from Louisville, and Sen. Stephen Meredith from Leitchfield and Rep. Russell Weber from Shepherdsville, Republicans.
The lawmakers said other issues that will likely be brought up during the next legislative session are medical marijuana; expanding the scope of practice for nurse practitioners; insulin cost; health department funding; and vaping. Weber, who sits on the Public Assistance Reform Task Force, said he was not sure if a reform bill would be introduced from the committee.
Alvarado told the group that he and the governor had discussed several possible ways to approach vaping, which as of Oct. 8 has been associated with 1,299 cases of lung injury and 26 deaths. He said their ideas include outlawing it all together as some other states have done; taxing it at a higher rate and using the money to pay for education and getting people off of tobacco products; and placing all vaping products behind the counter and requiring proof of ID for purchase, with limits to how much you can buy. He said this would allow adults who want to use vaping products to quit smoking combustible tobacco products to have access to them.
Kentucky Health News
State Rep. Danny Bentley didn't mince words when he told a health advocacy group that a priority of the next legislative session will be to deal with pharmacy benefit managers' Medicaid payments to drug stores.
Bentley, a Republican from Russell in Greenup County, said the problems are so bad that pharmacies say they threaten their survival -- an issue that several other states have also prioritized.
 |
| Reps. Russell Weber, Joni Jenkins and Danny Bentley and Sens. Stephen Meredith and Morgan McGarvey (L-R) |
In his effort to explain what PBMs do, Bentley first noted that he had dealt with them for 44 years as a registered pharmacist and then said, "Really, they don't do anything," adding that one of the main issues with them is their lack of price transparency and the lack of legislation to require them to be so.
PBMs are the middlemen between insurers and drug manufacturers. They determine what drugs are offered, how much someone pays for the drug and the payments to pharmacists.
Bentley was speaking as part of a legislative panel titled, ""Preparing for the 2020 General Assembly" at the Oct. 11 Kentucky Voices for Health annual meeting in Lexington.
Lawmakers have been working on this PBM issue for years and it looks like they will continue to do so in the upcoming 60-day session that begins Jan. 7.
Most recently they passed Senate Bill 5 in the 2018 legislative session, which puts the Department of Medicaid Services, rather than managed-care organizations, in charge of setting pharmacists' reimbursement rates. It also allows the department to regulate contracts between the MCOs, pharmacists, and PBMs; requires more transparency in how PBMs in Kentucky spend the $1.7 billion a year they get for processing prescriptions; and gives the state authority to penalize the MCOs and PBMs for noncompliance.
In a report earlier this year, "Medicaid Pharmacy Pricing: Opening the Black Box," the state said two PBMs kept $123.5 million last year from the Medicaid program by paying pharmacies a lower rate to fill prescriptions, while charging the state more for the same drug.
Kentucky's Medicaid Commissioner Carol Steckel assured members of the Medicaid Oversight and Advisory Committee in July that the state was committed to resolving the payment issues between the PBMs, which she referred to as "predators," and the state's independent pharmacies. The state is currently negotiating contracts with the MCOs, which will take effect in July 2020. PBMs are hired by MCOs to oversee their drug benefits.
The attorney general's office is also investigating whether PBMs have overcharged the state and discriminated against independent pharmacies.
Ohio is one of the states that has tried to rein in the questionable payment practices of its PBMs. Last year, a report found that two Ohio's PBMs "billed Medicaid $244 million more in a single year than they paid pharmacies, allowing them to profit three to six times the industry standard," Catherine Candisky and Darrel Rowland report for The Columbus Dispatch.
In response, Medicaid officials in Ohio, among other things, banned "spread pricing," in which a PBM keeps the difference between what it bills Medicaid for medications and what it pays the pharmacy to dispense the drugs, and implemented a "pass-through" pricing model, which requires PBMs to pay pharmacies the same amount they bill the state.
A new Ohio analysis shows that this new model "netted an additional $38 million, a 5.7% increase, in the rates paid pharmacies to fill prescriptions during the first quarter of this year compared with the final quarter of last year," reports the Dispatch.
The state Medicaid department in July told lawmakers that one of the proposed changes in Kentucky's new MCO contracts is to require all PBMs to use a "pass-through model" of payment.
Other states have also fired their PBMs. Michigan's Medicaid program has proposed to fire its' PBMs and to manage its drug program itself starting Dec. 1, which is expected to save the state $40 million; California will shift all Medicaid drug benefits away from PBMs by 2021; and West Virginia fired its PBM in 2017, Axios reports.
Commissioner Steckel said in July that DMS was using Kentucky data to replicate a West Virginia study showing the impact of removing pharmacy services from MCOs, which is what the state's pharmacists' lobby and many legislators would like to see happen. The West Virginia study found that the state saved $54 million by removing prescription drugs from Medicaid managed care.
 |
| Sen. Ralph Alvarado speaking at the Kentucky Voices for Health annual meeting. |
Also on the panel were Rep. Joni Jenkins and Sen. Morgan McGarvey, Democrats from Louisville, and Sen. Stephen Meredith from Leitchfield and Rep. Russell Weber from Shepherdsville, Republicans.
The lawmakers said other issues that will likely be brought up during the next legislative session are medical marijuana; expanding the scope of practice for nurse practitioners; insulin cost; health department funding; and vaping. Weber, who sits on the Public Assistance Reform Task Force, said he was not sure if a reform bill would be introduced from the committee.
Alvarado told the group that he and the governor had discussed several possible ways to approach vaping, which as of Oct. 8 has been associated with 1,299 cases of lung injury and 26 deaths. He said their ideas include outlawing it all together as some other states have done; taxing it at a higher rate and using the money to pay for education and getting people off of tobacco products; and placing all vaping products behind the counter and requiring proof of ID for purchase, with limits to how much you can buy. He said this would allow adults who want to use vaping products to quit smoking combustible tobacco products to have access to them.
from Kentucky Health News https://ift.tt/2M9IlVQ
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