Our Publications

Reports

Assessment of Medicaid MCO Preferred Drug Policy Options in Louisiana
Apr 2016

Summary

Over 90 percent of Louisiana’s Medicaid prescriptions are paid for by MCOs.  The Louisiana Association of Health Plans engaged us to assess the impacts of a potential policy change to take the preferred drug list (PDL) content responsibility away from the Medicaid MCOs and shift it to a single state-administered and state-determined PDL. Our key finding is that this policy change would be costly to the State and its taxpayers – increasing overall annual Medicaid costs by $40 million and increasing annual State Fund expenditures by approximately $15 million.  Our report provides evidence across dozens of states demonstrating that a focus on optimal management of Medicaid’s drug mix at the “front end” produces more favorable net costs than an approach that relies primarily on “back end” rebate maximization.

Executive Summary

Full Report


Assessment of Medicaid Reform Options Prepared for Alaska Legislative Budget and Audit Committee
Apr 2016

Summary

The Legislative Budget and Audit Committee of Alaskas sought information and analyses with regard to other states’ experiences with Medicaid reform and expansion initiatives. This report describes opportunities for Medicaid savings and to reduce pharmacy costs. As well as recommnedations for contracting, incorporating employment supports, improving and monitoring access to care, and reducing unnecessary emergency department (ED) utilization.

Executive Summary

Full Report


Assessment of Medicaid MCO Preferred Drug List Management Impacts
Feb 2016

Summary

The Texas Association of Health Plans engaged The Menges Group to prepare an analysis of the impacts of switching from a statewide uniform Medicaid prescription formulary to a model that allows Medicaid MCOs flexibility to develop their own preferred drug lists (PDL). Currently, Medicaid MCOs in Texas must utilize a uniform formulary controlled by the state. In this report, we assessed a model in which Medicaid MCOs have the latitude to manage the covered mix of drugs through their own PDLs. We conducted this assessment using multiple analyses, including a cost per prescription analysis, therapeutic class analysis, and quantitative and qualitative survey of Texas MCOs. This approach is estimated to result in total annual Medicaid savings of $236 million and annual general revenue savings of nearly $100 million. For this reason, a policy change towards the PDL latitude model is recommended. In addition to the report, a presentation summarizing the findings can be found in the Executive Summary hyperlink.

Executive Summary

Full Report


Projected Savings of Medicaid Capitated Care: National and State-by-State
Nov 2015

Summary

We were asked by the Association for Community Affiliated Plans (ACAP) to estimate the Medicaid savings created by the capitated coordinated care model. The report estimates the savings each state is achieving with its existing capitation program, as well as the additional savings that will occur if remaining fee-for-service Medicaid spending in each state is transitioned to capitation through contracts with managed care organizations (MCOs).  Savings estimates are provided within each state for each major Medicaid eligibility group.   Nationwide savings from existing Medicaid MCO capitation programs are estimated at $2.1 billion in 2011, increasing to $6.4 billion in 2016. 

Press Release

Full Report


Comparison of Medicaid Pharmacy Costs and Usage in Carve-In Versus Carve-Out States
Apr 2015

Summary

This study examined 35 states and DC that used the Managed Care Organization (MCO) model in their Medicaid program and either included (carved-in) or excluded (carved-out) pharmacy benefits from coverage.  The report found that carve-in states outperform carve-out states by a wide margin, saving Medicaid $2.06 billion in state and federal expenditures in 2014 alone. 

Key findings of the report include:

  • Across 28 states using the carve-in model, the net cost per prescription was 14.6% lower than the average net cost per prescription in states not carving in pharmacy.
  • This 14.6% differential created a $2.06 billion net savings in state and federal expenditures in FFY2014 for states deploying the carve-in model.
  • The seven carve-out states had a 20% increase in net costs per prescription from FFY2011-FFY2014 -- in stark contrast to the 1% increase in net costs per prescription experienced by the 6 states that recently switched from a carve-out to a carve-in model.
  • The seven carve-out states “missed” a total of $307 million in savings in FFY2014 which would have occurred had they used a carve-in model.

Press Release

Full Report


previous12next