Our Publications

Reports

Assessment of New Jersey’s Medicaid Prescription Drug Management Performance and Policy Options
Feb 2021

Summary

The New Jersey Association of Health Plans enlisted the Menges Group to evaluate New Jersey’s Medicaid prescription drug costs and assess the potential impacts of a pharmacy carve-out approach, whereby the prescription drug benefit would be removed from the MCOs’ responsibility and paid for in the fee-for-service (FFS) setting. We also assess the impacts of two potential policy changes, including maintaining MCO responsibility for the prescription drug benefit but requiring the use of the same preferred drug list (PDL) and MCOs’ mandatory use of a single Pharmacy Benefits Manager (PBM) subcontractor.

We estimate that carving pharmacy benefits out of the MCO benefit package will cost the State of New Jersey $51 million in the first year, with cumulative state costs across the first five years of the carve-out totaling $454 million. Additionally, we find that due to a weakened ability to manage drug mix at the “front end,” moving to a uniform DHS-driven PDL will cost the State of New Jersey $3 million in the first year, with cumulative state costs across the first five years totaling $26 million. Finally, our analyses show that a policy approach of requiring all MCOs to use the same PBM is also unlikely to yield savings.

Full Report


Assessment of Common Core Formulary Impacts on Virginia Medicaid Managed Care Drug Spending
Jan 2020

Summary

Virginia began implementing a Common Core Formulary within its Medicaid managed care program in 2017  for CCC Plus members and in 2018 for Medallion 4.0 members. The Virginia Association of Health Plans (VAHP) engaged The Menges Group to analyze the fiscal and programmatic impacts of this policy change. Our tabulations indicate that the change to the Common Core Formulary led to increased net (post-rebate) Medicaid costs of $13.2 million during calendar year 2019, including $5.5 million in additional state funds.

Full Report


Assessment of Virginia Medicaid Pharmacy Benefits Carve-Out Impacts
Jan 2020

Summary

Some Virginia policymakers have indicated an interest in moving to a pharmacy “carve-out” within the Medicaid managed care program, whereby the state would instead manage the pharmacy benefit for MCO enrollees, including paying directly for drugs made available in the program. Virginia’s Association of Health Plans engaged The Menges Group to estimate the fiscal impacts of Virginia switching to a carve-out model as well as the programmatic advantages and disadvantages of this potential change. We estimate that a change to a pharmacy carve-out would result in a 20.2% increase in net (post-rebate) Medicaid pharmacy expenditures across the five year timeframe SFY2020 - 2024, increasing net state fund costs by $12 million in the first year of implementation and by $157 million over five years.

 

Full Report


Value of Managed Care Organizations and Pharmacy Benefit Managers in Managing the Medicaid Prescription Drug Benefit
Oct 2019

Summary

PCMA engaged The Menges Group to estimate the financial and programmatic value of managing the prescription drug benefit in the Medicaid managed care setting, comparing states that utilize MCOs – who contract with PBMs – for their prescription drug benefits to states that manage their prescription drug benefits in FFS. Using Medicaid prescription drug data reported by each state to the Centers for Medicare and Medicaid Services (CMS) for all Medicaid-paid pharmacy-dispensed prescriptions, we analyzed how prescription drug costs and usage vary depending on how prevalent managed care is in each state Medicaid program. We also analyzed the drug costs and usage within specific therapeutic drug classes.

 

Full Report


Assessment of Medi-Cal Pharmacy Benefits Policy Options
May 2019

Summary

Policymakers are considering moving Medi-Cal to a pharmacy “carve-out” – that is, shifting the pharmacy benefit out of managed care to instead be administered by the state in fee-for-service (FFS). The carve-out proposal is motivated, in part, by the potential for the state to collect more drug manufacturer rebates. This report, commissioned by Local Health Plans of California, provides strong evidence that a pharmacy benefit carve-out will not achieve its intended cost savings and will have an adverse impact on the integrated, whole-person approach to care the Medi-Cal program has embraced.

Full Report


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