A new performance audit released by the Utah Legislature shows that by making a few adjustments, the Utah Department of Health could save the Medicaid program up to $3.4 million a year.
“It’s great to see this audit come out to give the Department of Health more information on how to lower the cost of pharmaceuticals for the Medicaid program,” Courtney Bullard, education and collaboration director at Utah Health Policy Project, said in an interview. “It could decrease costs for everyone … if we’re paying less money for Medicaid in general.”
Utah Auditor General Kade Minchey recommended the Department of Health research and report back to the Legislature on the feasibility of creating a list of preferred drugs with the lowest net cost to the state.
The report also asks the department to create a process to make sure pricing and rebates are processed correctly and to provide better oversight of Accountable Care Organizations (ACOs), which were shown to prioritize prescriptions with higher costs to the state compared to Fee For Service (FFS).
Medicaid ACOs are groups of doctors, hospitals, and other health care providers, who join together “to give coordinated high-quality care” to patients, according to the Centers for Medicare and Medicaid Services website. ACOs are expected to avoid duplicated services and prevent medical mistakes.
Fee for Service is a Medicaid program where doctors and other health care providers are paid for each service they perform. FFS uses the Medicaid Drug Rebate Program which is designed to offset federal and state prescription costs.
The Utah Department of Health responded to the audit by saying it plans to implement the recommendations by either January or July of 2021. But Bullard says lawmakers need to do more to make a real impact.
“The reason why we have really high prescription drug costs is not because there’s little oversight of ACOs from the Department of Health,” Bullard said. “It’s because drug manufacturers price gouge, are not transparent, and they profiteer in health care.”
She said the state can do everything possible to improve the Medicaid system and to buy the cheapest drugs, but drug manufacturers have to be involved in the conversation.
“We’re glad to see the Legislature encouraging this type of audit” Bullard said. “But really we want to see the Legislature also pass hard-hitting legislation that decreases the price of drugs.”
She said the sate still needs cheaper options for insurance companies to purchase lower-cost drugs, cheaper options for consumers, and cheaper options for the Medicaid department.
Utah Health Policy Project would like to see transparency legislation, Canadian drug importation legislation to allow open borders for drugs so Utah can get cheaper medicine, and an independent pharmacy board that monitors price gouging in the state.
“Hopefully if [Medicaid] runs efficiently then people will not have to use it," Bullard said, “because they can get out of poverty and be healthy, and move on with their lives.”