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Philip J Almeter, Wesley R Butler, Jeffrey W Reynolds, Deborah L Duckworth, Jonathan A Labuhn, Mark D Birdwhistell, Pharmacy benefit manager reform within Medicaid Managed Care: The pursuit of a model that preserves the intent of the 340B program, American Journal of Health-System Pharmacy, Volume 79, Issue 18, 15 September 2022, Pages 1607–1611, https://doi.org/10.1093/ajhp/zxac012
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In the last 3 years many states have passed pharmacy benefit manager (PBM) reform legislation, championed antidiscrimination laws related to the 340B Drug Pricing Program, and introduced Medicaid reform measures that come with significant 340B program implications.1,2 In July 2021 Kentucky enacted a new model for Medicaid Managed Care (MMC), the first of its kind, that disrupts the vertically aligned PBM industry, implements PBM reform, and uniquely preserves 340B savings for covered entities.3 This MMC model was developed to avoid a complete reversal of the Medicaid drug benefit from an MMC model to a purely Medicaid fee-for-service (FFS) model, which would have had substantial financial consequences for 340B covered entities. The goal of this article is to walk through the development of this model, as it may serve as a blueprint for other states that are looking to remodel their MMC structure.
Medicaid Managed Care
Traditional Medicaid, or FFS Medicaid, began in 1965 as an essential piece of the US healthcare safety net. MMC, a model that has been around since 1982, accounted for 69% of Medicaid beneficiaries nationwide by 2020.4,5 As of July 2017, 91% of Medicaid enrollees in Kentucky participated in MMC, and by 2021 the Kentucky Department of Medicaid Services (DMS) contracted with 6 managed care organizations (MCOs): Aetna, Anthem, Humana, Molina, United Healthcare, and WellCare.6,7
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