Complete Story
Ohio Medicaid Implementing Enhanced Dispensing Fees
OPA is pleased to report that after more than a year of discussions, the Ohio Department of Medicaid (ODM) is implementing the tiered dispensing fees that were passed in the state budget bill last year.
As you may recall, OPA was instrumental in working to expose how PBMs in the Medicaid managed care program were paying pharmacies low, billing the state high, and pocketing the difference through hidden "spread pricing." The state later found that the gap of spread amounted to $244 million in just one year.
After the scheme was uncovered, state officials banned spread pricing, required full transparency, fired the PBMs, and are now moving to a single, state-contracted PBM for the managed care program.
Additionally, through the leadership of Senator Matt Dolan, the state also worked to remedy the situation and protect pharmacy access by reinvesting some of those previously wasted Medicaid dollars back into pharmacies across the state. Specifically, the legislature allocated $100 million in additional tiered dispensing fees to pharmacies, based on pharmacy size and proportionality of Medicaid prescriptions.
While the COVID-19 pandemic certainly injected some understandable budget uncertainties, Governor Mike DeWine and Medicaid Director Maureen Corcoran still prioritized the legislature's budget directives, and will begin implementing payments in the coming weeks.
All prescriptions dispensed between January 1, 2020, and June 30, 2021, by identified retail pharmacies, are eligible for this tiered dispensing fee. The prescription(s) must be dispensed to/for an eligible Medicaid recipient, and it must be a prescription covered by the managed care organizations in the pharmacy benefit.
Based on the criteria defined by ODM, the tiered dispensing fee amounts are as follows:
- Tier 3 (5 or 6 Points): $2.25/Rx
- Tier 2 (4 Points): $1.75/Rx
- Tier 1 (2 or 3 Points): $1.25/Rx
Points are awarded based on how the pharmacy is designated by the Board of Pharmacy (Independent, 3 points; Small Chain, 2 points; and Large Chain, 1 point), and the pharmacy's overall percentage of Medicaid managed care prescriptions dispensed (highest %, 3 points; mid-range %, 2 points; and low %, 1 point). Add up those two criteria on a per location basis, and you'll have your tiering.
Please note these amounts are in addition to any regular dispensing fee applied to the prescription. Tiers
are determined at the individual pharmacy NPI level.
The first lump-sum payments will cover all Medicaid managed care prescriptions dispensed through retail pharmacies from January 1, 2020 and June 30, 2020. All subsequent payments will be done based on a timeline that can be accessed here.
To check on how your pharmacy was scored and what additional fee your pharmacy can expect, you can look it up via your NPI number here.
Important: If you have questions about this process, please first consult the FAQs located here. Then, if you have additional questions or concerns, please contact OPA first at info@ohiopharmacists.org. We will get back to you promptly.
It's been a long road to pharmacy payment reform, but we are pleased with the current state of affairs in Medicaid, as well as its trajectory on single PBM implementation, revamped payment methodologies, and provider status.
We want to thank ODM, Governor DeWine and his team, the legislature, the journalists at the Columbus Dispatch, and the many pharmacists who went to great risk to speak out on the abusive practices of PBMs.
