Ohio taxpayers may be paying twice for the same Medicaid drug services

A team headed by Gary Rutherford, CEO of HealthPlan Data Solutions, that discovered Ohio taxpayers were overcharged up to $186 million for Medicaid prescription drugs last year has uncovered an additional $20 million that might have been wasted to fund services for which taxpayers already were paying.

A team headed by Gary Rutherford, CEO of HealthPlan Data Solutions, that discovered Ohio taxpayers were overcharged up to $186 million for Medicaid prescription drugs last year has uncovered an additional $20 million that might have been wasted to fund services for which taxpayers already were paying. The team determined that PBMs were taking $149 million to $186 million a year above the industry's standard profit margin. Then Rutherford's auditors probed why Buckeye Community Health Plan—one of five managed-care organizations hired by the state to deliver health-care services to the 3 million Ohio residents on Medicaid—was charging the state more than twice the per-prescription costs of the other four. Buckeye charged an average of $11.60 each to fill the 4.6 million prescriptions it handled, compared with approximately $5.60 for the other four. Buckeye rolled up additional costs because it hired a company called Envolve to act as a pharmacy benefits "administrator"—even though Buckeye had hired CVS Caremark as a PBM. Envolve and Buckeye are both owned by the health care firm Centene. None of the four other managed care organizations saw a need to hire another company in addition to their PBM.