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.

"Throughout the engagement, Lewin consultants listened to us and delivered superb analyses and thoughtful guidance–not canned solutions."  NONPROFIT HEALTH SYSTEM