Plan to ‘carve out’ pharmacy services from Pennsylvania’s Managed Care Organizations sparks concerns about quality of care, costs to taxpayers

HARRISBURG (May 4th, 2009) Pennsylvanians enrolled in the federal Medicaid program and other advocates urged lawmakers to reject a proposal by the Department of Public Welfare (DPW) to ‘carve out’ delivery of pharmacy services, at a hearing before the House Health and Human Services Committee, due to the risk the proposal would pose to their quality of care.

The consumers were joined by leaders of the PA Coalition of Managed Care Organizations (PAMCO) and other advocates who testified that the proposed ‘carve-out’ would jeopardize quality of care while driving up the long-terms costs of Medicaid for all taxpayers.

Consumers who testified told lawmakers that the MCOs go far beyond ‘managing’ their needs by providing aggressive, coordinated hands-on care that will be very difficult for the state to match. Bucks County resident Elena Sherwood cited Keystone Mercy’s efforts to care for her twin sons, saying that the MCO was a ‘godsend.’
When a pharmacist increased her son’s dosage for a medication to a dangerously high level, a Keystone Mercy pharmacist caught the error in time for Sherwood to rush her son to a doctor.
“Keystone Mercy literally saved my son’s life that day,” Sherwood said.
Advocates focused on the negative impact carve out would have on the quality of care Medicaid recipients enrolled in managed care plans now receive.

“Medicaid enrollees suffer real consequences from having multiple sources of coverage that may not communicate with each other and the state suffers from the cost associated with unnecessary duplication of administrative activities and lack of coordination between coverage providers,” said Thomas L. Johnson, Executive Director of Medicaid Health Plans of America.

Witnesses also challenged the administration’s projected savings. Sherry Knowlton, Senior Vice President and General Manager of AmeriHealth Mercy Health Plan, asked Committee members to focus on the projected savings, noting that those projections have risen dramatically in the past three years.

“As a former Deputy Secretary for Medical Assistance, I appreciate the need to contain costs in the Medicaid program. However, if the only reason to do Pharmacy Carve Out is to achieve savings, I would think the Legislature would want to be certain that those savings are attainable,” Knowlton said.

“We believe that segregating pharmaceutical care from medical care is the wrong direction for the Commonwealth. It is not true reform. It is a regressive action that will drive up both short term and long term medical costs,” William S. George, President and CEO of Health Partners testified.

Michael Blackwood President & CEO of Gateway Health Plan, added, “Coordinating all the physical health needs of members within one organization has many advantages and Medicaid MCOs successfully do that now. On this, all parties agree. Why fragment a unified system which delivers quality to Medicaid recipients in HealthChoices and voluntary counties? The Congressional Budget Office agrees in a recent report that it is better to unify pharmacy with MCOs.”