Michigan's Medicaid program may fire its PBMs

Michigan's Medicaid program might stop using its contracted, third party pharmacy benefit managers to handle prescription drug claims and price negotiations. Instead the state would manage drug coverage itself, according to a Sept. 30 proposed policy draft.

Currently, Medicaid managed care health plans fill prescriptions for patients. Under the proposed policy change, all outpatient pharmacy drug coverage would be transitioned away from the managed care plans to fee-for-service Medicaid starting Dec. 1.

Michigan officials said in the proposed policy draft that the state could get larger rebates and cut administrative costs if the state handled all Medicaid medication benefits instead of PBMs.

Dominick Pallone, the executive director of the Michigan Association of Health Plans, told Crain's Detroit Business that Michigan's Medicaid director, Kate Massey, estimates the plan would save $41 million overall. Mr. Pallone, however, said the plan would raise out-of-pocket costs for Medicaid beneficiaries.

Missouri, Tennessee and Wisconsin have also stopped using PBMs.

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