Public Welfare Secretary Estelle Richman renewed her push Tuesday during House and Senate committee hearings on the proposal. Although the state has taken various steps to save money on the Medicaid program, which enrolls more than 1.9 million people, it still represents about 20 percent of the state budget and is growing, Richman said.
"The reason this (proposal) keeps coming up is that it's a way to control costs without cutting benefits and without cutting eligibility," Richman told the House Health and Human Services Committee.
The expected savings are linked primarily to prescription drug rebates from the federal government, which are available only to state Medicaid programs, Richman said. Managed-care companies receive rebates directly from drug companies.
Pennsylvania already manages pharmacy benefits for about 800,000 Medicaid recipients enrolled in fee-for-service health plans, including 300,000 who are also eligible for Medicare, Richman said. Twenty states and the District of Columbia have already adopted similar approaches to their Medicaid managed-care programs, she said.
The department hopes to start managing the benefits in January in 15 counties and then expand statewide within the following two years, Richman said.
The change could mean higher out-of-pocket drug costs for patients, said Sherry Knowlton, senior vice president and general manager of AmeriHealth Mercy Health Plan, which enrolls more than 97,000 Medicaid recipients in 15 counties.
In many instances, the state's preferred drug list - medications it deems the safest and most effective - favors a brand-name drug, rather than a cheaper generic equivalent, Knowlton told the Senate Public Health and Welfare Committee.
"For consumers, they pay double the copay for a brand-name drug than they do for a generic," Knowlton said.
Patients who want to keep taking their current medicine can seek state approval to do so if it is not on the preferred drug list, but that would reduce the department's expected savings, Knowlton added.
Some lawmakers expressed concern that coordinating patient care would become more difficult for managed-care companies if the state takes control of Medicaid pharmacy benefits.
"I am very concerned that you are solving your financial problem and creating havoc in another system," said Sen. Pat Vance, R-Cumberland. "It seems you're bifurcating the system for the person ... and that cannot be advantageous to them."
Richman sought to reassure both committees that the change would not affect how Medicaid recipients obtain prescriptions or how the managed-care companies oversee patient care.
"All we're doing is paying the bill," she said.
Sen. Ted Erickson, R-Delaware, chairman of the Senate committee, said lawmakers need to consider the proposal during negotiations for the 2008-09 state budget.
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On the Net:
Department of Public Welfare: http://www.dpw.state.pa.us