Lobby group working on proposals to overhaul how Medicaid covers drugs

November 15, 2015

Private Medicaid plans are seizing on the concern over prescription drug prices to lobby for an overhaul of how the government insurance program pays for medicine. The Medicaid Health Plans of America is working on a set of proposals to present to lawmakers and hopes to release them publicly by mid-2016, the group's president and CEO, Jeff Myers, said. Medicaid is "now run by very sophisticated insurers who are taking financial risk," Myers said. "It would be better if the market allowed pharmaceutical companies to take the same kind of risk." Experts say private plans have long wanted to overhaul how Medicaid covers drugs, because current law places restrictions on how much they can negotiate with drug companies while the plans are still responsible for the cost of their patients' overall care. Myers argued that the so-called "capitated" payment model, which by its nature pushes plans toward the most cost-effective care, is, therefore, the most logical place to start experimenting with the value-based purchasing that many lawmakers and even the drug industry say they are interested in. By design, the plans are supposed to be responsible for the entire "wellness portfolio" of individuals, and are, therefore, willing to pay more for drugs that will keep them out of the hospital, Myers said. Current law "doesn't allow our plans to do what they do best," he added. The organization's staffers were working on a set of recommendations to take to policymakers, he said.