Missouri Could Save $50M Per Year by Adjusting How It Pays for Medicaid Beneficiaries’ Medications, Audit Says

Missouri could save more than $50 million annually on Medicaid drug costs if it employed a preferred drug list and lowered the reimbursement rate it pays pharmacies, according to an audit released July 1, the Kansas City Star reports. Medicaid prescription drug costs in Missouri have more than doubled since 1997, and in 2001 they reached $660 million. "Missouri has not been as proactive as other states with certain containment programs," according to the audit, compiled by state Auditor Claire McCaskill. Although state legislators passed a law this year permitting a preferred drug list, the state's "complex .. rule-making process" has "block[ed] its implementation," the Star reports. State officials estimate a preferred drug list could save the state $32 million annually. In addition, the rule-making process has precluded the state from implementing a prior-authorization program, under which doctors would have to receive permission from the state before prescribing certain drugs. The audit also said the state could save $16.4 million per year by adjusting the rates at which it reimburses pharmacies. Missouri currently reimburses pharmacies 10.43% less than a drug's average wholesale price, the same rate since 1991. Other states have pay rates as low as 14% less than the average wholesale price. The audit also states that Missouri pays too much for 437 drugs that are given intravenously to at-home or nonhospitalized chronically ill patients because officials "have not timely implemented new dispensing fees ... which would allow providers to be reimbursed using more accurate drug prices." The state could save $1.5 million per year if it implemented the new fees. The Division of Medical Services is crafting a preferred drug list and attempting to change the state's rule-making process in order to create a prior authorization rule, officials said (Hoover, Kansas City Star, 7/2).