Shifting PA Medicaid to a PDL
Pennsylvania’s planned shift to a preferred drug list for its Medicaid program is the subject of a new analysis of the projected impact of such a change.
Earlier this year, the Department of Human Services announced its intention to implement a preferred drug list in the state’s Medicaid program. That PDL would apply to both the fee for service and managed care Medicaid programs.
During this year’s budget proceedings, Pennsylvania’s Human Services Code was amended to require an analysis of “the projected cost to the medical assistance managed care organization [sic] and the projected supplemental rebates that could be obtained” by moving to a PDL.
That analysis has now been completed. It concluded that the state
…will save $85 million annual through implementation of a Statewide PDL. The Statewide PDL will allow the Department [of Human Services] to receive an additional $261 million in pharmacy rebates, which will more than offset the estimated increase to managed care organization (MCO) expenditures of $176 million, considering their additional costs and loss of market share rebates.
The analysis commissioned by DHS is now available. To learn more about the implications of a state-wide PDL for the state, for Medicaid managed care organization, and for Medicaid beneficiaries, read “Fiscal Impact Analysis of Medical Assistance Program Uniform Statewide Preferred Drug List, 2019 Report.”
The PDL will take effect on January 1, 2020 and has been posted on a DHS web site here.
Today, Lyft is working with approximately 35 state Medicaid programs while Uber, at least so far, participates only in Arizona’s program.
Instead, patients previously served by Hahnemann University Hospital, a Pennsylvania safety-net hospital that served especially large numbers of Medicaid and uninsured patients, are now being served by other safety-net hospitals in Philadelphia: mostly, Jefferson Health, the University of Pennsylvania Health System, Einstein Healthcare Network, and Temple University Hospital. All report increased volume in their emergency rooms, more ambulance arrivals, and more inpatient admissions, but at least so far, they also report that they are comfortably handling the increased patient volume created when Hahnemann closed its emergency room and discharged its last patients in July.
In the message, SNAP notes the important role Medicaid DSH payments play in helping private safety-net hospitals care for the many uninsured patients who continue to turn to them for care.
While observers warn that it is difficult to attempt to render a final verdict on the reform law’s insurance expansion and its impact, various studies and observations point to encouraging developments. Among them:
Cuts in Medicaid disproportionate share hospital (Medicaid DSH) allotments to states were mandated by the Affordable Care Act based on the expectation that the law would greatly reduced the number of uninsured Americans. While this has been the case, the decline in the number of uninsured has not been as great as expected. For this reason, Congress has on several occasions delayed the required Medicaid DSH cut.