Reforming Wisconsin’s Medicaid Drug Program

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from NCPA,

Wisconsin has moved about two-thirds of its Medicaid enrollees into privately administered managed care plans, known as BadgerCare. However, the state has been very slow to move Medicaid enrollees into managed drug plans. Virtually all state Medicaid programs distribute some drugs on a fee-for-service (FFS) basis separately from enrollees’ health plans. A few states distribute almost all their Medicaid drugs this way;(Oklahoma + Arkansas) Wisconsin is one of them. This inefficient practice should change, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis.

A recent analysis by the Menges Group identified ways in which privately managed Medicaid drug plans are more efficient than state-administered drug benefit programs. Rather than negotiating with pharmacy networks, state fee-for-service Medicaid programs often arbitrarily pay much higher dispensing fees than they would in a competitive market. These programs rarely utilize generic drugs. Moreover, FFS Medicaid faces political opposition to exclusive pharmacy network contracts.

For instance:

– Just over three-fourths (77 percent) of prescriptions in Wisconsin’s fee-for-service Medicaid plan are filled with generic drugs; the national average for managed Medicaid drug benefits is about 80 percent.
– Wisconsin’s Medicaid programs pays pharmacies $3.94 to dispense a prescription, whereas the average for private Medicare Part D plans is about one-half as much — about $2.00.
– The number of prescriptions per enrollee is generally higher among enrollees in Medicaid compared to managed care.

According to Menges, integrating drug and health benefits in a statewide managed care program over the next 10 years could save Wisconsin Medicaid over $2 billion in federal and state spending.

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