Pennsylvania State agency seeks to gain control of Medicaid managed care plans' prescription drug benefits

May 22 2008

The administration of Pennsylvania Gov. Ed Rendell (D) has proposed shifting control of the prescription drug component of Medicaid managed care plans to the state Department of Public Welfare, the Pittsburgh Post-Gazette reports.

According to department officials, the change would enhance services, simplify requirements for medical providers and save the state an estimated $95 million annually.

The state already administers pharmacy benefits for about 800,000 other Medicaid beneficiaries. State Medicaid agencies can negotiate larger rebates from drug manufacturers than managed care plans. The rebates would make up the bulk of the estimated $95 million in savings. Under the proposal, the managed care plans would have "real-time" access to the state's pharmacy claims data and could use the data to ensure patients receive the most appropriate medications for their conditions, Mike Nardone, the department's deputy secretary for medical assistance programs, said.

Estelle Richman, secretary of the agency, said the program would be simplified by establishing a single statewide list of preferred drugs and a list of procedures to submit claims and request prior authorization of certain medications. The formularies would not be as restrictive as those used by managed care plans, she said.

Managed care officials oppose the idea, saying that shifting oversight of the benefits to the welfare department would reduce options for beneficiaries (Fahy, Pittsburgh Post-Gazette, 5/21).