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With the State of Texas needing to find ways to trim billions of dollars to balance its budget, shifting pharmacy services from a fee-for-service system to a Medicaid managed care system in order to save money may seem like a good idea at first blush. A closer look at the proposed Medicaid managed care "carve-in" of pharmacy services, however, reveals that any such savings predicted from the program are elusive, manufactured, and fleeting, at best.
Currently, pharmacy services for Medicaid patients are delivered by community-based pharmacies who are reimbursed by the state through a fee for service structure. This simply means that the state reimburses a pharmacy a pre-determined rate to cover the cost of the product (drug) and the cost of doing business (paying the pharmacist). The administrative cost of this approach to the State is a mere 1% of total program outlays.
The Texas legislature is proposing that Medicaid pharmacy services be shifted to a restricted managed care system where "middlemen," known as Pharmacy Benefit Managers (PBMs), would set the rules for administering pharmacy services to Medicaid patients. It is asserted by proponents of this change that this move would save money, but such "savings" come only in the form of a premium tax on health insurance plans, which would in turn be passed on to all consumers of private insurance products in Texas.
This premium tax "benefit" to the State is nothing more than a tax and is dwarfed by the economic damage that a the resulting restriction in access to pharmacy services would impose on the State and its citizens.
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