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Analysis of Pharmacy Carve-Out Option for the Arizona Health Care Cost Containment System

November 2003

Center for Health Care Strategies

In a project jointly funded by the State of Arizona and the Center For Health Care Strategies (CHCS), The Lewin Group assessed whether it would be best for AHCCCS (Arizona's Medicaid program) to continue to purchase all prescription drugs through its capitated managed care program, or whether the State's interests would be better served by "carving out" prescription drugs and paying for AHCCCS medications on a fee-for-service basis. Through aggressively managing the volume and mix of drugs, Arizona has achieved the lowest per capita pharmacy costs of any Medicaid program. While drug-specific prices would be more favorable under a carve-out due to the Federal rebate program, Lewin's projections are that a carve-out would result in a net increase in overall pharmacy spending. Taking the responsibility for pharmacy costs out of the hands of at-risk health plans is expected to lead to diminished cost-effectiveness in managing the volume and mix of prescribed drugs.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP


Simplifying Medi-Cal Enrollment

June 2003

California HealthCare Foundation
Lewin contact: Lisa Chimento

The Medi-Cal Policy Institute commissioned The Lewin Group to study various ways in which the process for families applying for Medi-Cal, California's Medicaid program, could be simplified. To apply for Medi-Cal, many applicants must provide documentation of their assets and income, which can serve as a barrier to successful completion of the application process. Through interviews with county eligibility workers, advocates, state staff and others, Lewin developed several alternatives for simplifying both the assets and income tests. For five of these options, Lewin developed estimates of medical costs and administrative savings associated with the implementation of these initiatives. The results of the analyses are summarized in an issue brief, as well as in two detailed reports addressing each of the assets and income options. A technical report on the cost modeling is also included.

Client Area: Foundations
Expertise Area: Medicaid and CHIP


Extending the Federal Drug Rebate Program to Medicaid MCOs: Analysis of Impacts

May 2003

Association of Community Affiliated Health Plans

A coalition of Medicaid Focused Health Plans contracted with The Lewin Group to analyze the impacts of allowing Medicaid managed care organizations (MCOs) to have access to the Medicaid drug rebate on a voluntary basis. Since its inception in 1991, the federal rebate program has applied only to Medicaid fee-for-service programs. Currently, Medicaid MCOs must enter into separate negotiations with drug manufacturers, either directly or through their contracting pharmacy benefits managers (PBMs), in order to obtain rebates. The proposal being explored would allow participating health plans to continue to pay for the ingredient costs of drugs as they do currently, but rebates would no longer be a negotiable item with the manufacturers or with the health plans’ pharmacy benefits managers (PBMs). Instead, Medicaid health plans would receive the same level of rebate available to state Medicaid fee-for-service programs. The report describes the potential trade-offs of the proposal and looks at its potential financial impact.

Client Area: Associations
Expertise Area: Medicaid and CHIP


The California Working Disabled Program : Lessons Learned, Looking Ahead

April 2003

Medi-Cal Policy Institute

The California Working Disabled Medi-Cal Buy-In Program was implemented in April 2000 to enable disabled individuals to participate in the workforce without the threat of losing their Medi-Cal coverage. Although a relatively new program, policymakers and advocates have already begun considering programmatic and policy changes that would build on the existing program, expand eligibility, and broaden access to certain services. This study was initiated to better understand the factors affecting enrollment in CWD and to estimate the enrollment and cost impacts of select programmatic changes. This report shares findings from an enrollee survey, interviews with county eligibility workers, and modeling of data from the Census Bureau and the California Department of Health Services.

Client Area: Foundations
Expertise Area: Medicaid and CHIP


Reducing Pharmacy Fraud, Abuse and Waste: Promising Practices of States

February 2003

National Governors Association

Drawing upon our expertise in the effective management of Medicaid's prescription drug benefit, the Center for Best Practices at the National Governors Association commissioned an Issue Brief from The Lewin group entitled "Reducing Pharmacy Fraud, Abuse and Waste: Promising Practices of States." This Issue Brief identifies several tools states may utilize to prevent pharmacy fraud, abuse and waste. By utilizing these tools, states may save money without imposing reductions in the pharmacy benefit itself and without impairing access to prescription drugs by Medicaid beneficiaries.

Client Area: Associations
Expertise Area: Medicaid and CHIP


Analysis of Medicaid Reimbursement in Oregon

February 2003

Oregon Association of Hospitals and Health Systems

The Oregon Association of Hospitals and Health Systems asked The Lewin Group to focus on four areas related to the Oregon Health Plan (OHP) Medicaid program and provider reimbursement. The areas were: An analysis of Medicaid provider payments compared to actual provider costs Comparisons to other states' Medicaid programs and to Medicare The impact of proposed budget reductions The effect of Medicaid payment rates on access to care. This report describes Oregon's Medicaid reimbursement system and analyzes Oregon and national health expenditure data related to reimbursement issues. It presents discussions of the various findings and conclusions.

Client Area: Associations
Expertise Area: Medicaid and CHIP


Older Adults Waiver for Home and Community Based Services: Final Report

February 2003

University of Maryland, Baltimore County

The home and community-based Medicaid waiver that serves seniors in Maryland requires restructuring, in order to make services available to eligible seniors on a more expedited basis. In our report, we researched this waiver, known as the "Older Adults Waiver," and we made several recommendations to make the it more efficient. These recommendations include a sequence to develop a single point of entry, as well as tools to recruit, retain and pay providers, to ensure capacity in the community.

Client Area: State and Local Governments
Expertise Area: Center on Aging and Disability, Medicaid and CHIP


Comparison of Medicaid Pharmacy Costs and Usage between the Fee-for-Service and Capitated Setting

January 2003

Center for Health Care Strategies

Both state Medicaid fee-for-service programs and Medicaid managed care organizations (MCOs) are experiencing double-digit growth rates in their pharmaceutical budgets. As states grapple with both short-term and longer-term Medicaid budget issues, pharmacy spending is receiving substantial attention. The Omnibus Budget Reconciliation Act of 1990 gave states access to a generous rebate program, but limited states' ability to control drug expenditures in ways that other commercial payers can. Medicaid MCOs do not have access to the federal rebate, but may have more leeway in cost containment methodologies. No previous study, however, had quantified and described the differences in drug spending and utilization patterns between Medicaid FFS programs and Medicaid MCOs. This report, Comparison of Medicaid Pharmacy Costs and Usage between the Fee-for-Service and Capitated Setting, prepared by The Lewin Group and the Association for Health Center Affiliated Health Plans and funded by the Center for Health Care Strategies, brings data findings to bear on the many policy making efforts underway in the Medicaid pharmacy arena. The study's intent is to help both state Medicaid agencies and health plans assess how they are faring and what opportunities for cost savings might exist.

Expertise Area: Medicaid and CHIP


Covering VHAP and SCHIP Enrollees under a Voucher Model: Program Design and Actuarial Analysis

December 2002

Office of Vermont Health Access
Lewin contact: John Sheils

The Lewin Group analyzed an 1115 waiver concept that would provide vouchers for the purchase of health insurance to people who are currently eligible under the Vermont Health Access Plan (VHAP) and State Children's Health Insurance Program (SCHIP). In this analysis, Lewin estimates the number of persons who would be covered under the voucher program and the cost of providing the benefits called for under the proposal. The paper also provides estimates of the impact of the waiver on the number of persons in the state of Vermont who do not have health insurance.

Client Area: State and Local Governments
Expertise Area: Health Reform, Medicaid and CHIP


Performance-Based Payments to Minnesota Health Plans : Program Design Features

November 2002

Minnesota Department of Human Services

Minnesota’s Department of Human Services (DHS) engaged The Lewin Group to assist in the development of a performance payment system for the state’s prepaid medical assistance program (PMAP) and MinnesotaCare. This report describes the performance payment system that has been recommended to DHS, based on input from the health plans, from DHS staff, and from Lewin’s consulting team.

Client Area: State and Local Governments
Expertise Area: Medicaid and CHIP

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