Today, each of Ohio Medicaid’s managed care organizations (MCOs) contracts with a separate pharmacy benefit manager (PBM) for its members. In 2019, the Ohio Legislature directed ODM to make a shift in the program and select and contract with a single PBM (SPBM). ODM’s goals for SPBM are to improve management and administration of pharmacy benefits for managed care recipients. Through SPBM, ODM will gain increased financial accountability and ensure alignment with our clinical and policy goals, while also improving transparency.
What is the role of the SPBM?
For Medicaid managed care members, the SPBM will provide more choice in selecting their pharmacy due to fewer out-of-network restrictions. In addition, members will no longer need to consider pharmacy benefits as a decision-making factor when selecting a managed care plan. The SPBM can also incentivize member-valued services and benefits like home delivery, 90 day refills, and adherence programs.
Through SPBM, pharmacists and prescribers will see benefits from streamlining and consolidation of processes currently provided by multiple, individually contracted PBMs. For example, pharmacists can streamline inventory based on the Unified Preferred Drug List (UPDL) and a single set of guidelines. The SPBM will also include implementation of a single set of clinical and prior authorization policies and claims process, and provide a standard point of contact, reducing the administrative burden on providers. These changes simplify and improve information exchange between pharmacies, providers, and MCOs to drive improved member care management opportunities.
Another important objective is reflected in the overall approach that ODM is taking to unbundle several components from the current managed care plan responsibilities in order to provide transparency and focused specialization in areas of critical need identified by stakeholders and the General Assembly. This is not returning to fee for service. Rather this is an affirmative strategy to move Ohio to the “next generation” of managed care expertise. With the SPBM structured as a prepaid ambulatory health plan, the state will have the managed care tools and flexibilities for advancing policy and cost effectiveness of services. In addition to the pharmacy benefit being important in and of itself, it is also vitally important to supporting ODM’s overall value-based and integrated care strategies.
What is the Pharmacy Operational Support Vendor (POSV)?
The POSV will work in coordination with ODM and the to-be selected SPBM to improve transparency, accountability, and efficiency within ODM’s pharmacy benefits program. The POSV will provide expert assistance and consultation, operational assistance, and liaison support to implement and enhance this operating model. Professional agility, a dedication to high‐quality services and best practices, and value‐based solutions to improve health outcomes and control costs are all necessary to ensure success of the initiatives to reimagine the Ohio Medicaid program.
The Ohio Medicaid POSV will assist and support ODM in the performance of two critical pharmacy services functions:
- Pharmacy reimbursement and benefit design
- Pharmacy program oversight and auditing
The POSV will be central to achieving transparency through its work in determining reimbursement methodology, conducting Cost of Dispensing (COD) and Actual Acquisition Cost (AAC) surveys, maintaining accurate and up-to-date AAC rates, and conducting oversight of the functions of both the SPBM and the ODM’s fee-for-service pharmacy benefits administrator (FFS PBA). The success of this pharmacy benefit administration model, and the POSV specifically, will be demonstrated by fair, accurate and value-based reimbursement to pharmacies, oversight ensuring the SPBM and the FFS PBA comply with ODM’s expectations, improved provider and member satisfaction, and continuous improvement of the pharmacy program.
ODM, SPBM, POSV & MCO Responsibilities in the Future Ohio Medicaid Pharmacy Benefits Program
About the Ohio Medicaid SPBM & POSV Procurements
ODM is currently in the process of reviewing and scoring the responses received for our Request for Proposals (RFP) for the SPBM. Additional details and a link to the RFP can be found on the Request for Proposal page of medicaid.ohio.gov.
Prior to developing these RFPs, ODM released a Request for Information (RFI) for the SPBM procurement to gather input and suggestions from pharmacists, prescribers, and potential PBM bidders. The SPBM RFI responses received are available on the PBM RFI Responses page of medicaid.ohio.gov.
Feedback received through the SPBM RFI was taken into consideration during the process of developing the RFP.
In future phases, once responses are scored and contracts awarded for the SPBM and POSV, ODM will work with our new vendors to conduct a thorough transition to support individuals, pharmacists, and prescribers in adopting program changes.