Updated 3 p.m. Jan. 3.
Editor’s Note: This article was updated to include the correct number and percentage of medications covered by the new regulation.
Medicaid recipients in Pennsylvania could be in for a surprise on their next trip to the pharmacy. As of Jan. 1, the state Department of Human Services is requiring that the eight companies that manage pharmacy benefits for Pennsylvania Medicaid recipients rely on a unified preferred prescription drug list. The list applies to about a third of the 2,650 medications covered by Medicaid — those for which there are multiple options available in the same class.
The change comes as part of a statewide effort to cut costs and simplify care. Until now, each of the eight companies has maintained its own list of preferred drugs, medications that receive automatic reimbursement. Requiring all eight companies to work from a single, unified list makes it easier for the state to control and monitor prescriptions.
“A secondary, but very prominent reason, is cost savings,” said Laval Miller-Wilson, who directs the Pennsylvania Health Law Project, a non-profit law firm that offers legal help to Pennsylvanians navigating the Medicaid system. “Having this allows the state to get more rebates from the drug and pharmacy manufacturers than the managed care companies have been able to get.”
But the change could create problems for consumers. While the list doesn’t outright ban non-preferred drugs, it prioritizes cheaper, generic alternatives. In some cases, it omits drugs without providing equivalent options.
Those concerns have caused a backlash among some doctors, who argue that requiring prior approval for non-preferred drugs could present barriers to care.
In an effort to mitigate those issues, the State Department of Human Services required all eight companies to send out letters in October to notify the 150,000 affected consumers of the change to their medication plans. The letter advised patients to consult with their doctors about whether switching their prescriptions was a prudent option.
But Miller-Wilson, whose group advocated for the notifications, acknowledges that plenty of Medicaid recipients may have fallen through the cracks.
“The reality is that sometimes mail gets lost,” he said. “Sometimes folks aren’t able to get to the doctor in a timely way. So come January 1, they may be told by their pharmacist the medication they’re on is no longer going to be available.”
But that doesn’t mean they’re left high and dry. Miller-Wilson says consumers have several options for navigating the transition — starting with their local pharmacist.
“The pharmacist can say, ‘Okay, I’m gonna exercise my discretion and give you up to a 15-day supply,’” Miller-Wilson said. “And during that interim, what the consumer should do is call their doctor and say, ‘I want to stay on this medication. Can we work something out to have it continue?’”
Doctors can offer a longer-term solution by submitting what’s called a benefit exception, requesting that the insurance company continue to pay for the original, non-preferred drug based on a patient’s medical need.
While the new state regulations require that companies adhere to the preferred drug list 95 percent of the time, or else face hefty fines, they have a built-in grace period. The state won’t start fining companies for compliance until July.
“The insurance company doesn’t have to say, ‘Well, the state told us to change,’” Miller-Wilson said. “They can exercise discretion and continue to approve the off-list drug.”
So what happens when insurance companies don’t approve requests for non-preferred drugs? That’s when Miller-Wilson says patients can start considering legal options. His group, the Pennsylvania Health Law Project, offers help to consumers looking to appeal denials of medical necessity.
“The opportunity to have uniformity in the drug list is welcome, but that doesn’t mean that uniformity is rigid,” Miller-Wilson said. “The law allows — and the economics, frankly, allow — managed care companies to go off-list. They can still do that, and they frankly still have the funding and the money to make exceptions.