Name: Ohio Medicaid officials misled public on drug spending study
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Ohio Medicaid officials misled public on drug spending study

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Darrel Rowlanddrowland@dispatch.comView CommentsAs Ohio struggled to escape the grip of pharmacy benefit managers that were reaping close to a quarter-billion dollars a year from the state’s Medicaid program, an assessment by a Columbus consultant of newly implemented reforms was eagerly awaited last summer.But several times in the months after the study was due, the ’s top spokesman denied it had been submitted. He also said repeatedly that there were no earlier versions of the study to view.When the report was released on Sept. 30, as well as later in the fall, state also asserted that no earlier versions of the report existed.All of those statements were false.After a long battle, the agency finally handed over earlier versions of the report late last month, more than a year after they were first requested by The Dispatch. Several internal communications also were released, although not all that were sought.Those records show that Medicaid officials had the report months before they said they did. During that period, a quarter of the information contained in the original much-anticipated study was removed, reducing the size of the report from 27 to 20 pages.In a written statement, Corcoran said it is “incorrect” that she made false statements. The earlier versions of the report “reflected when the (consultant’s) analytic work was completed, not when the final report was produced and delivered to us.”She did not directly address her repeated assertions that there were no earlier versions of the report.What’s missing?Much of the excised information represented detailed data about the performance of each of Medicaid’s five privately run, managed-care organizations, which hire the pharmacy benefit managers, also known as PBMs, that have been accused of ripping off the state.For the final report, Medicaid officials had about a dozen tables of data removed. For several other tables, the state had the individual data added together into aggregate totals — which means the public could not tell which managed-care organizations/PBMs were giving the state a good deal and which weren’t.&gt;&gt; ReadThe department’s legal team said, “Any redactions contained in the draft versions of the report were made to protect proprietary information identified by our managed-care organizations. As you are aware, trade secrets are not considered public records because the release of which is prohibited.”Corcoran also cited attorney-client privilege, although the consultant was not represented by Medicaid lawyers.“My interest has always been in ’cleaning up the mess,’” she said in her statement. “We requested the (consultant’s) assessment of the program. I have no motivation to hide this information, as evidenced by my many conversations with you and other reporters throughout the process and my exceptional accessibility to you throughout.”However, at the same time the department is arguing to keep information from the public, it has battled in Franklin County Common Pleas Court for more than two years arguing that an earlier report by the same consultant should be made public — despite arguments from PBMs that it contains trade secrets and proprietary information about drug costs.While the consultant’s two reports are not identical, there is some overlap. For example, Medicaid wants to make public each PBM’s “dispensing fee rate performance” from the first study. But the agency kept secret a “dispensing fee comparison table“ for each managed-care organization in the second report.A table analyzing each PBM’s “pricing discount performance” in the first report should be made public, according to Medicaid. But a “pricing discount comparison table” for each managed-care plan was removed from the later report.The new developments emerge as the Medicaid department already is under fire by state lawmakers and others for failing to follow laws enacted to help rein in PBMs.Under bipartisan legislation passed more than a year ago, the agency was supposed to convert by July 1 to using a single PBM, instead of the current three. Medicaid officials didn’t come close to meeting that deadline, insisting they needed to get federal approval for funding the new setup first or else Ohio would lose matching funds.A separate measure approved by lawmakers to compensate pharmacists through Medicaid for providing medical services, in addition to paying them to fill prescriptions, took effect in January 2019. The department still has not implemented it.One result: Hundreds of pharmacies across Ohio that could have been performing desperately needed COVID-19 tests have been unable to do so.Making wavesThe main reason last year’s study by consultant HealthPlan Data Solutions, based in Columbus’ Arena District, was so eagerly awaited stemmed from the explosiveness of its report in 2018, when it exposed PBMs for charging Ohio three to six times the industry standard rate.The pharmacy benefit managers are middlemen in the drug supply chain. Hired by Ohio’s five managed-care organizations with the state’s blessing, they negotiate rebates and other deals with drugmakers, then set price lists for Ohio pharmacies with the stated goal of keeping down costs for taxpayers.The 2018 HDS study, begun after numerous stories in The Dispatch’s exposed problems with PBMs, showed the the multibillion-dollar companies engaged in “spread pricing.” That means they charged the state far more — the quarter-billion dollars — than what they paid out to Ohio pharmacies, which provide prescription drugs to the 3 million poor and disabled people on the Medicaid rolls.In response, Medicaid officials banned "spread pricing." In 2019, they implemented a new "pass-through" pricing model, one that requires PBMs to pay pharmacies the same amount they bill the state.`The department hired HDS again a few months later to study whether the pass-through model was being used. However, unlike for the earlier study, Medicaid officials did not asked HDS to examine the cost effectiveness of the new setup, nor whether PBMs had simply found a different way to overcharge the state, as critics contended.When the 2019 study was made public, Corcoran acknowledged its limitations. "Have we saved the state money? That wasn't the point. The point was transparency and so that we could continue to work on" necessary changes "in an educated way," she said.Medicaid officials acknowledged at the time that they didn’t know if rates paid to Ohio pharmacies, which regularly say they are inadequately reimbursed by the PBMs, were sufficient because they didn't know how much pharmacies pay for the medications.Here’s what Ryan Stubenrauch, a spokesperson for HDS, said in an emailed statement that was non-responsive to Dispatch questions about why the consultant’s report was so limited:“ is an industry leader in objectively analyzing prescription drug data to fit the specific needs of many different health-care clients. We worked with the Ohio Department of Medicaid on this report to analyze their data and ensure that the practice of spread-pricing had been stopped and replaced with a pass-through model. We look forward to continuing to deliver transparency and payment integrity to both government and private sector health plans to help them lower their prescription drug costs.”The Medicaid agency has taken other steps to control drug prices, such as rolling out a unified preferred drug list for all managed-care plans. That was designed to minimize confusion for patients, reduce administrative costs and maximize rebates from drug companies.When the HDS report was released last year, the department also unveiled a new detailing a host of administrative costs to allow greater transparency and analysis.The biggest step is a current undertaking to rebid its contracts with Medicaid managed-care organizations starting next year.Denying realityHints that there was missing material could be found in the edited HDS report. For example, the document referred to “addendum reports detailing our HDS BenchMarket analysis” and “addendum reports, supplied separately from the report.”When asked about those references in the final study, Corcoran said there were no such reports.As Medicaid officials discussed changes to the final report in mid-September, an annotation from Deputy Director Patrick Beatty said, “There are already comments from folks that they have concerns ODM would manipulate/shape the report. We shouldn’t be seen as doing that.”The Dispatch first asked to see early versions of the report in May, and the finalized report on July 11, 2019. Under Ohio public-records law, drafts of reports are subject to public disclosure.Medicaid press secretary Kevin Walter said in response to the latter that he checked and “I’ve learned that we have not yet received a report.”A renewed request on July 26 brought a “nothing new to report” from the department.After another request on Aug. 30, Walter emailed, “I just got a note from the director. She says she is sorry but we are still working on it.”A request on Sept. 5 had Walter check again. “Regarding the report, we do not have it yet. As the director said and I’ve reaffirmed, we will have it to you when it is available.”As promised, Corcoran set up a meeting for The Dispatch, since the newspaper had by then published dozens of stories about PBMs, with her and several others familiar with the report when it was released Sept. 30. (Corcoran also has been accessible for several interviews with Dispatch reporters during her tenure.)However, when The Dispatch finally got the earlier versions of the report last month, two were dated June 28, 2019. And a July 1, 2019, email from the head of HDS requested a meeting with Corcoran the following week to formally present the report — one whose existence in any form was denied to the public for an additional two months.drowland@dispatch.com@darreldrowlandView Comments

Darrel Rowlanddrowland@dispatch.comView CommentsAs Ohio struggled to escape the grip of pharmacy benefit managers that were reaping close to a quarter-billion dollars a year from the state’s Medicaid program, an assessment by a Columbus consultant of newly implemented reforms was eagerly awaited last summer.But several times in the months after the study was due, the ’s top spokesman denied it had been submitted. He also said repeatedly that there were no earlier versions of the study to view.When the report was released on Sept. 30, as well as later in the fall, state also asserted that no...

Ohio Medicaid officials misled public on drug spending study

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