Managed Markets: Medicaid

Contributed by:

Denise Myshko

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By Denise Myshko

Transition Time for Medicaid

Medicaid reform is taking hold at both the state and federal levels, and the use of managed-care and cost-containment strategies are gaining momentum amongst state prescription plans. Medicaid reform is taking hold at both the state and federal levels, and the use of managed-care and cost-containment strategies is gaining momentum among state prescription plans. States Seek Efficiency in Pharmacy Programs Major changes on the national level, combined with individual state initiatives, are requiring states to adapt their policies and rework their systems and infrastructures to meet the changing nature of pharmacy benefits. This is according to a new report, State Perspectives on Emerging Medicaid Pharmacy Policies and Practices, that was released in November 2006 by the National Association of State Medicaid Directors (NASMD). The report, powered by Avalere Health LLC, is the first annual Medicaid pharmacy policy survey that provides comprehensive information on a number of categories important to states and other key stakeholders. Forty-seven states responded to the survey conducted in June and July 2006. The report looks at states’ responses to questions in five major areas: the impact of the Medicare Part D prescription drug program on states’ Medicaid pharmacy programs; the new pharmacy cost sharing and price transparency provisions included in the Deficit Reduction Act of 2005; various drug rebate policies; the role of managed care organizations in the provision of prescription drugs; and states’ efforts to implement medication management and quality initiatives. Among the major findings of the report are: Several states implemented policies to supplement Medicare Part D coverage for certain low-income Medicare beneficiaries. To date, most states report that the shift of dual eligibles to the Medicare Part D drug benefit has not had a substantial financial impact. States are still waiting for guidance from the Centers for Medicare and Medicaid Services on the Deficit Reduction Act of 2005 to assess the law’s impact on Medicaid pharmacy policies. More than two-thirds of states, however, noted that they do not expect the DRA to reduce their spending on pharmacy benefits significantly. Several states participate in or are considering joining bulk-purchasing pools. States use a variety of mechanisms to manage both cost and use of prescription drugs, while coordinating such efforts with evidence-based pharmacy quality programs. Source: National Association of State Medicaid Directors, Washington, D.C. For more information, visit nasmd.org. Dr. David Medvedeff Formularies are starting to take hold within Medicaid. Reform has involved employing a managed-care strategy to cap costs, says David Medvedeff, Pharm.D., President of Informed Decisions. Experts on this topic Pravin Chandran. Partner, Contracts Management Practice, BusinessEdge Solutions Inc., East Brunswick, N.J.; BusinessEdge Solutions is an industry-focused business and technology consulting firm. For more information, visit businessedge.com. David MedvedefF, Pharm.d. President, Informed Decisions LLC, Tampa, Fla.; Informed Decisions, a wholly owned subsidiary of Gold Standard Inc., provides a full array of health information technology services to healthcare interests, including state governments, commercial insurance payers, pharmaceutical manufacturers, and professional healthcare associations. For more information, visit informeddecisions.com. Donna Lee Yesner. Partner, McKenna Long & Aldridge LLP, Washington, D.C.; McKenna Long & Aldridge is an international law firm of more than 400 lawyers and public policy advisors. For more information, visit mckennalong.com. PharmaVOICE February 2007

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