Ohio could save big with overhaul of $3B pharmacy program


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The DeWine administration continues with sweeping reforms for how more than $3 billion in Ohio Medicaid pharmacy benefits are spent, with an announcement Monday that they’ve selected a new company to act as a middleman who manages those dollars and pays out claims.

The Ohio Department of Medicaid today announced Monday that Gainwell Technologies was selected to be the agency’s single pharmacy benefits manager. The new system could save around $150 to $200 million a year, though final net cost change still needs calculated. Those savings are anticipated for the first full year of operations.

A trade group of pharmacists has lobbied for years for an overhaul in how they are paid for prescriptions by Ohio Medicaid plans, saying the subcontractors that manage these benefits for Medicaid plans aren’t transparent or accountable and keep too much of the money they manage.

ExploreOhio moves forward with change for $3B pharmacy program

Under the current system, each of the Ohio Medicaid plans, including CareSource, each has their own contracting deal with a company to manage pharmacy claims and benefits. Under the new system, all the Medicaid plans are going to use one contractor, Gainwell, which the state says will save money and increase transparency and make it easier for health care providers to deal with the insurance companies.

In 2019, the Ohio General Assembly instructed Ohio Medicaid to adopt this change after a consultant’s report on how these contractors were paid $224 million in overhead by Medicaid.

ExploreCareSource announces major business change

“At issue was the lack of transparency. Neither ODM nor the state auditor could verify or refute the appropriate use of funds,” Ohio Medicaid stated. Ohio Medicaid said the department and other state agencies had no means to audit potential steerage or conflicts of interest.

The new system is part of a larger overhaul of the Medicaid program pitched as a way to put the needs of Medicaid members first and bring visibility to the use of state dollars.

The new system should also help health care providers. Under the current system, health care providers are subject to meeting unique, time-consuming processes required by each Medicaid plan to prescribe important, sometimes life-sustaining medications. Under the new system, they will have one system to deal with.

“Since the start of the DeWine administration, ODM has launched several initiatives to drive transparency, reduce pharmacy costs, and simplify provider administration,” said Maureen Corcoran, Ohio Medicaid director, said in a statement. “Selecting Gainwell as our partner in administering a clinically driven, outcomes-oriented pharmacy program enables us to take advantage of their previous successes.”

Ohio Medicaid received six competitive offers. Besides Gainwell, they had bids from Change Healthcare, Express Scripts, MagellanRx Management, Navitus Health Solutions, and RxAdvance.

The story so far: Ohio Medicaid pharmacy overhaul

What’s happened: The DeWine administration asked for bids to run the overhauled Ohio Medicaid pharmacy system for managing more than $3 billion and climbing in annual prescription benefits.

What’s new: The winner that will run the new system was announced, which is Gainwell Technologies.

What’s next: Ohio Medicaid will put the new system in place. DeWine’s new budget, when released in February, will crunch how much money the new system should save. Ohio will also hire a pharmacy operational support vendor, which will audit Gainwell.

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