The Ohio Department of Medicaid on Friday took the first and long-awaited step in hiring a new pharmacy benefit manager to process claims for the $28 billion health insurance program for the poor and disabled.
The department released a request for bids as it moves to a single PBM at the direction of state lawmakers outraged by pharmacy middlemen making millions off taxpayers. Bids are due Sept. 4, with a new PBM selected later this year.
The move comes weeks after the July 1 deadline set by the legislature to have a new system in place.
“Moving to a single pharmacy benefit manager that partners with Ohio Medicaid will improve management and administration of pharmacy benefits for our members participating through an (managed care organization),” Medicaid Director Maureen Corcoran said in a statement.
“Along with introducing a unified preferred drug list at the beginning of the year, the move to a single pharmacy benefit manager is another important step in providing quality care for our members, transparency in operations, and responsible stewardship of Ohio taxpayer dollars.”
Legislation directing Medicaid to hire a single PBM was enacted a year ago and Corcoran has blamed the delay on regulatory requirements of the federal government, which covers well over half of Medicaid costs. Speeding the process, she said, would put millions of federal matching dollars at risk.
Medicaid provides health insurance to nearly 3 million poor Ohioans. The legislature moved to reform Medicaid’s $3 billion-a-year prescription drug program after a study in 2019 found pharmacy middlemen billed Ohio taxpayers $224 million more in a single year than they paid pharmacies.
Currently, the state contracts with six private managed care plans to oversee the program, who hire one or more PBMs to negotiate prices and rebates with drug companies and set rates paid to pharmacists.