As ‘Carveout’ Debate Continues, States Try Hybrid Approach to Medicaid Rx Benefits
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Nov 26, 2024
Frustrated by rising pharmacy costs and seeking a simpler system, eight states in recent years have decided to “carve out” retail pharmacy benefits management from their contracts with Medicaid managed care organizations. So far, there appears to be limited evidence regarding whether such moves have been beneficial, and the number of Medicaid programs opting to do so has leveled off.
However, a “middle ground” approach first tested by Kentucky is gaining steam, as two states, Louisiana and Mississippi, followed in Kentucky’s footsteps after the state implemented such a program in July 2021. With that approach, Medicaid MCOs still get paid for providing pharmacy benefits but must contract with a single PBM and use a preferred drug list (PDL) selected by the state.
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