Michigan Pharmacy Association finds inaccuracies in Medicaid savings report

February 1, 2011

The Michigan Pharmacy Association criticized a new report suggesting that the state could save $146 million by moving fee-for-service Medicaid recipients to managed care programs.

The Michigan Pharmacy Association (MPA) criticized a new report suggesting that the state could save $146 million by moving fee-for-service (FFS) Medicaid recipients to managed care programs.

The report from the Lewin Group, a Washington-based consulting firm, found that the Medicaid pharmacy program in the United States could save more than $30 billion over the next decade by switching to “the more efficient approaches” used by Medicare Part D plans, Medicaid managed care organizations, and the commercial sector, including typical state employee plans.

“By operating more like Medicare and commercial market plans, Medicaid could increase the use of generics and save billions without cutting benefits,” said Mark Merritt, president and CEO of the Pharmaceutical Care Management Association, which commissioned the report.

However, MPA officials said the Lewin Group report is inaccurate and includes “flawed assumptions about Michigan,” said Larry Wagenknecht, CEO of Michigan Pharmacists Association. “In our opinion, Michigan Medicaid is actually operating well and finding success with patients in generic utilization and care.”

In addition, the study claims that Michigan’s Medicaid FFS dispenses only 67% of prescriptions as generics. “This is completely false…for all of 2010, the state has been above 76%,” Wagenknecht said.

“It is important to note that the study was commissioned by an association that represents PBMs, thus the push to move Medicaid fee-for-service to managed care,” Wagenknecht said.