Medicaid

Validation of Pharmacy Payment Methodology versus NADAC

Industry	Medicaid
Problem	A state determined that all Managed Medicaid plans must comply with the CMS required National Average Drug Acquisition Cost (NADAC) as the pharmacy payment benchmark. The client needed validation that their current payment methodology compared to the NADAC benchmark payment results.
PHSL Solution	PHSL analyzed the client’s current pharmacy payments compared to the NADAC values on the dispense date for each claim and specific NDC. PHSL also evaluated alternative analyses performed by the client’s PBM and the state’s assessment.
Results	PHSL’s NADAC analysis indicated that the Managed Medicaid plan payments were more favorable overall to pharmacies than NADAC values. PHSL analysis of the the alternative assessments were inconclusive. This led the client to request more specific details of each assessment, because the initial information provided did not have detailed methodologies available. Based on PHSL’s assistance, the client was able to successfully resolve this issue with the state Medicaid department.

Industry	Medicaid
Problem	Managing the cost of prescription medications is a concern for all third party payers, with particular pressure on managed Medicaid plans. A managed Medicaid client was looking to optimize their generic drug spending and contacted PHSI for an outside assessment of their generic reimbursement and maximum allowable cost (MAC) list and strategy.
PHSL Solution	PHSI evaluated the client’s current MAC list and found additional savings opportunities. Based on these results, PHSI now manages the client’s MAC list and provides quarterly updates or more frequently as market changes dictate.
Results	The client generated substantial savings on generic drug spend while minimizing pharmacy calls and customer service issues.