Proposed Medicaid Pharmacy Legislation Could Help Bridge the State Budget Gap While Preserving Patient Access and Choice of Pharmacy

Dawn Butterfield, RPh

Representative Randy Fine, co-sponsor Rep. Jackie Toledo, and Senator Ana Maria Rodriguez recently announced the details of new proposed legislation that could save the State of Florida as much as $200 million per year while also expanding the Florida Medicaid pharmacy network and access to medication for the state’s anticipated 4.4 million Medicaid recipients.

HB 1043 and SB 1306 are bills that would “carve out” pharmacy coverage from the Statewide Medicaid Managed Care system. They call for the end of systemic overpayments to the pharmacy benefit manager (PBMs) middlemen currently overseeing Medicaid pharmacy, as uncovered in the state-funded Milliman Florida Medicaid report released last November. These overpayments — amounting to somewhere between $150 million and $200 million annually — are flowing out of Florida and away from the Medicare patients and providers for whom these monies are designated.

These health plans and their PBM middlemen partners would like everyone to believe PBMs are “misunderstood”, that the overpayments are not happening despite two independently-commissioned reports stating otherwise. In the absence of transparency, the health plans and PBMs can and do falsely claim they’re not billing as much as $200 million more than entitled. And because there’s currently no way for any state or federal agency to know for certain if the state is being bilked — not even the Agency for Healthcare Administration (AHCA), who administers Florida Medicaid — taxpayers have no choice but to keep paying.

Under HB 1043 and SB 1306 the lack of transparency and uncertainty would end. Pharmacies would be reimbursed at drug cost, plus a professional fee to cover dispensing costs. The State of Florida would recover additional millions as Floridians begin the road to recovery from this devastating global pandemic.

Since the inception of Statewide Medicaid Managed Care, PBMs and their health plan partners have quietly profited from unnecessarily complex revenue schemes that include drug manufacturers rebate kickbacks in exchange for formulary placement; charging pharmacies various transaction fees for no reason other than they can; steering patients to PBM-owned pharmacies, sometimes by covert threat; requiring patients to use PBM-owned mail order pharmacies for more expensive “specialty” medications; employing delay tactics like prior authorizations to put off paying for certain medications — sometimes at great physical cost or loss of life to the patient.

PBM profit schemes and their resulting price tags are thoroughly documented in both the Milliman Report and a January 2020 study by 3 Axis Advisors that examined 5 years of Florida Medicaid data obtained through the state’s “sunshine” laws. Both studies debunked PBM claims of financial savings while drawing a correlation between the PBMs’ widespread practice of reimbursing pharmacies below cost, the rash of pharmacy closures in Florida since Statewide Medicaid Managed Care began four years ago, and the direct connection to declining patient medication adherence and access to care.

Before HB 1043 and SB 1306 were introduced, the Health and Human Services Subcommittee on Finance and Facilities reviewed the Milliman Report and found it to raise startling questions. Testifying before the subcommittee, AHCA Deputy Secretary Beth Kidder was asked about report findings pointing to trends that, if continued, would render communities without pharmacies all together. Often answering with “I don’t know” or “I’m not certain”, Ms. Kidder frequently appeared to dodge committee member questions with purposeful intent to obfuscate.

Meanwhile the health plans and PBMs are collaborating on an elaborate, misleading PR campaign that includes fake association websites and bogus social media accounts posting and tweeting against HB 1043 and SB 1306. Neither the websites nor the social media accounts represent actual patients, nor do they accurately reflect the findings of the Milliman Report.

We thank Rep. Fine, co-sponsor Rep. Jackie Toledo and Sen. Rodriguez for taking a stand for Florida’s patients and pharmacies, and look to the State Legislature to follow their strong, certain lead.

Dawn Butterfield, RPh is an independent pharmacy owner and one of the founders of Small Business Pharmacies Aligned for Reform (SPAR).

Small business Pharmacies Aligned for Reform (SPAR) is a group of neighborhood pharmacists and other advocates who care about preserving patient access.

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