pharmacueticals 6 18FRANKFORT, Ky. (3/20/18) — A Senate bill that would level the playing field for reimbursement of Medicaid managed care fees to Kentucky’s independent pharmacies has been returned to the Senate with some House changes.
Senate Bill 5, sponsored by Sen. Max Wise, R-Campbellsville, passed the Senate 32-4 and was sent to the House for agreement in early March. The bill would address lack of reimbursement to independent pharmacies by pharmacy benefit managers and Medicaid managed care organizations by requiring the state Department for Medicaid Services to directly administer its outpatient pharmacy benefits.
House-approved changes to SB 5 would further clarify where the roughly $1.7 billion in state funds spent on Medicaid managed care pharmacy benefits each year are going, said Rep. Bart Rowland, R-Tompkinsville. Rowland, who presented SB 5 for a vote before the full House, said Kentucky doesn’t know where the money goes now due to a contractual loophole.
Because of the loophole, he said “Kentucky Medicaid has no contractual authority over the PBMs. As a result, Medicaid cannot currently account for how that $1.7 billion in taxpayer money is currently spent.”
SB 5 as amended by the House would answer the question of how much of that money “is going to Kentucky pharmacists, how much is going PBMs, and how much is going to the MCOs,” he said. It would specifically require PBMs to report fees assessed on pharmacies they own compared to fees assessed on independent pharmacies and remove PBM authority to set reimbursement rates and give that power to the state Medicaid program. It would also require the state Medicaid program to approve certain contracts, and approve new fees that MCOs or PBMs try to impose on a pharmacist.
Noncompliance by PBMs could result in fines or license suspension ordered by Medicaid program or state Department of Insurance, said Rowland.
The House voted 97-0 to approve SB 5 with its changes. The bill now returns to the Senate for agreement with those changes.

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