Texas Insider Report: AUSTIN Texas State Rep. Fred Browns amendment to SB 23 is currently in Conference Committee and appears to be a sticking point as the HMOs do not want to be held to a fraud standard. SB 23 proposes changes
to Medicaid that will affect the economic viability of independent pharmacy in Texas. The threat comes from giving health maintenance organizations (HMOs) and pharmacy benefit managers (PBMs) control of patient access to pharmacy services in the Texas Medicaid Vendor Drug Program.
When the Senate voted out SB 23 earlier this month Senator Jane Nelson committed to Senators Leticia Van de Putte and Glen Hegar as well as the entire Senate and the citizens of Texas to work with pharmacies across Texas to address these concerns.
At issue is that state Medicaid agencies are at the mercy of the provider your local neighborhood pharmacy to accurately calcuate the assigned benefit of the drug pricing.
Those are the customer populations that tend to drive Medicaid costs.
Everybody wants to see better care management for these beneficiaries" said Joan Alker co-author of a recent
report analyzing Floridas currently struggling program which urges caution for any state considering the issue.
For other states to note said Alker
If this is a budget-driven exercise as opposed to a quality-driven exercise I worry that the savings will come at the expense of needed care" of her Health Policy Institute at Georgetown University study.
Also worth considering is the fact that national pharmacy chain CVS and its RX2000 system have come under recent scrutiny for what is often referred to in the debate as salami slicing". The reference refers to the sandwich making process because it involves stealing small slices of cash over a long period of time.
This is the second recent case in which a Pharmacy Benefits Manager has been accused of creating a compter system that salami sliced Medicaid payments.
The Brown Amendment clarifies that in order to be eligible to bid on a Medicaid managed care contract an HMO or PBM must not:
Have been fined penalized or settled damages more than $500000 in the past three years;- Or is not the defendant in a pending state or federal criminal case;
- Or is subject to a pending state or federal enforcement action from bidding on a Medicaid managed care contract.
To anyone who has ever watched Superman III or Office Space two movies in which the protagonists create computer programs that repeatedly steal small amounts of money at a time diverting millions of dollars in aggregate to themselves this will sound all too familiar.
CVS RX2000 took advantage every time a dual eligible" Medicaid patient asked for a prescription the case alleges. Dual-eligible patients are people who have private insurance but who nonetheless qualify for Medicaid as well.
For those patients Medicaid should only be charged what the customer would have been required to pay as a co-pay if the customer was only using their private insurance the case alleges. Then the patient must assign their insurance rights to Medicaid which seeks additional reimbursement from the insurer.
But as Medicaid is not privy to the price agreements between insurers and PBMS it does not know what prices private insurers get.
The company faced allegations that its CVS/pharmacy outlets overbilled Medicaid for patients covered by the safety-net insurer and 3rd-party insurance between October 2002 and the end of 2010 in:
- Alabama
- California
- Florida
- Indiana
- Massachusetts
- Michigan
- Minnesota
- New Hampshire
- Nevada and
- Rhode Island according to the settlement.
In reality RX2000 increased the alleged copay whenever a dual-eligible patient showed up. So for a $25 copay on a common drug like Adderall Medicaid was billed $26.75 the case claims.
As a result of investigations the retail pharmacy arm of CVS Caremark will pay
$17.5 million to settle False Claims Act allegations the company overbilled Medicaid the Justice Department said.
Ten states will receive $9.5 million and interest under the agreement and the pharmacy retailer will pay roughly $8 million to the federal government.
CVS/pharmacy did not intentionally overcharge any state Medicaid program" the companys statement said.
Under the settlement CVS will face monitoring of its billing procedures and employee training and education for three years the Justice Department said.
