There is little more complicated than drug pricing in Medicaid, with a variety of federal and state requirements. An Office of Inspector General report examines whether states are taking full advantage of provisions in the reform law designed to aid in ensuring that Medicaid programs get the best possible drug prices. (OIG Report) The issue takes on heightened importance given the Medicaid expansion taking place in many states under the reform law. Historically, the federal government has calculated a federal upper limit for Medicaid drug reimbursement for drugs with multiple sources, but the states have also had Maximum Allowable Cost programs, which usually had lower prices than the federal upper limit. However, the reform law tasked HHS with resetting the method for calculating the federal upper limit, relating it more to average manufacturer price. The previous methods often resulted in FULs that were well above market prices. Looking at the 45 states with MAC programs, OIG found that most based the MAC on pharmacy acquisition costs, which were generally lower than the pre-reform law FULs, on average the FUL was almost two times greater than the corresponding MAC for a drug. However, the new draft FULs are now often lower than the MAC amounts in the states, by an average of 22%, so OIG reasonably concludes that states should reconsider use of the FULs, which could result in additional savings of billions of dollars. One difficulty, however , is that only about half the drugs on the typical state’s MAC list have a FUL, so CMS may need to expand the range of drugs for which it calculates that metric.
✅ Subscribe via Email
About this Blog
Healthy Skeptic Podcast
Research
MedPAC 2019 Report to Congress
June 18, 2019
Headlines
Tags
Access
ACO
Care Management
Chronic Disease
Comparative Effectiveness
Consumer Directed Health
Consumers
Devices
Disease Management
Drugs
EHRs
Elder Care
End-of-Life Care
FDA
Financings
Genomics
Government
Health Care Costs
Health Care Quality
Health Care Reform
Health Insurance
Health Insurance Exchange
HIT
HomeCare
Hospital
Hospital Readmissions
Legislation
M&A
Malpractice
Meaningful Use
Medicaid
Medical Care
Medicare
Medicare Advantage
Mobile
Pay For Performance
Pharmaceutical
Physicians
Providers
Regulation
Repealing Reform
Telehealth
Telemedicine
Wellness and Prevention
Workplace
Related Posts
Commentary
Karl Marx
February 10, 2025
Karl Marx
Karl Marx was essentially an idiot whose ideas have been adopted by totalitarians to justify…
Commentary
Debunking Climate Hysteria, February 9, 2025
February 9, 2025
Debunking Climate Hysteria, February 9, 2025
The latest in our irregular efforts to spread climate truth.
Commentary
Bob Dylan, Part 1
February 9, 2025
Bob Dylan, Part 1
A recent movie on Bob Dylan is worth a watch, but his songs are what…