New York Comptroller finds $605 million in unnecessary costs to the Medicaid program
The New York Comptroller recently released the results of an audit titled “Medicaid Program-Cost of Pharmacy Services Under Managed Care.” The audit covered the period January 1, 2016 to December 31, 2019.
The following outline the key findings of the audit;
The Department missed opportunities to minimize costs on pharmacy services delivered through Medicaid managed care because Department officials did not take steps to ensure the use of the lowest net cost drugs to the Medicaid program. As a result, for the period January 1, 2016 through December 31, 2019, we estimated $605 million in unnecessary costs to the Medicaid program.
The Department does not require MCOs to use the most cost-effective drugs to the Medicaid program, nor does it provide MCOs with information or assistance to determine the most cost-effective drugs.
Medicaid-participating MCOs are required to regularly provide their drug formulary information, as well as information on costs and supplemental rebates (which MCOs did not always provide as required) for all drugs delivered under managed care, but the Department does not review this information to determine if MCO formulary preferences result in the use of the most cost-effective drugs.
The audit gave the following recommendation:
Conduct timely routine analyses to identify the most cost-effective drugs to the Medicaid program and ensure drug utilization is steered toward drugs with the lowest net cost when medically appropriate.
If you are a healthcare stakeholder with an interest in New York state or do business within New York’s insurance system then you should be aware of this type of scrutiny. The legislature has already enacted a bill that will carve pharmacy benefits out of the Medicaid managed care program beginning in April 2021.
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