Pennsylvania House Republican Caucus
08/28/2024 | Press release | Distributed by Public on 08/28/2024 13:13
DHS Fails to Implement Cost Saving Measures Required by Law, Cutler and Grove Say
Aug. 28, 2024
Harrisburg - The following statement is issued on behalf of House Republican Leader Bryan Cutler (R - Lancaster) and House Republican Appropriations Chairman Seth Grove (R - York) following a troubling report from State Auditor General Timothy DeFoor on Pharmacy Benefit Managers driving up the cost of Medicaid:
House Republicans have worked in a bipartisan way to reduce the cost of prescription drugs by eliminating spread pricing and reigning in Pharmacy Benefit Managers (PBM) fees. Auditor General Timothy DeFoor's report reveals more government waste on an issue which should have been resolved, a troubling trend in state government.
Act 120 of 2020 by Rep. Doyle Heffley (R - Carbon) eliminated the practice of spread pricing and required transparency on transmission fees charged by the PBMs to pharmacies. The Auditor General's report shows that the Department of Human Services (DHS) failure to fully follow Act 120 is costing taxpayers millions of dollars. In response to the report, DHS acknowledged that they have the ability to audit PBMs; however, they chose to push that responsibility to the managed care organizations (MCOs).
Further, while transmission fees charged by the PBM are required to be disclosed and applied at the time of adjudication of a pharmacy claim, they are not deducted from the MCO reported costs utilized to calculate capitated payments, allowing PBMs to further inflate the cost of prescription drugs and profit at the detriment of the Commonwealth's taxpayers.
House Republicans have been at the forefront of the fight to restrain secretive costs implemented by PBMs, first through Act 120, Act 98 of 2022, and most recently from Rep. Valerie Gaydos (R - Allegheny) with Act 77 of 2024. With inflation driving the cost of everything up over the last three years - including prescription drugs - it is crucial that we take immediate steps to save money. Auditor General Timothy DeFoor has identified several recommendations that DHS should urgently consider not only to comply with existing law but to further address transparency and ballooning costs in Medicaid.
Press Inquiries:
Rep. Cutler: Mike Straub [email protected] or 717-260-6397
Rep. Grove: Charlie O'Neill [email protected] or 267-303-7028
Representative Seth Grove
196th District
Pennsylvania House of Representatives
Media Contact: Charlie O'Neill
717.260.6121
[email protected]
RepGrove.com / Facebook.com/RepSethGrove
House Republicans have worked in a bipartisan way to reduce the cost of prescription drugs by eliminating spread pricing and reigning in Pharmacy Benefit Managers (PBM) fees. Auditor General Timothy DeFoor's report reveals more government waste on an issue which should have been resolved, a troubling trend in state government.
Act 120 of 2020 by Rep. Doyle Heffley (R - Carbon) eliminated the practice of spread pricing and required transparency on transmission fees charged by the PBMs to pharmacies. The Auditor General's report shows that the Department of Human Services (DHS) failure to fully follow Act 120 is costing taxpayers millions of dollars. In response to the report, DHS acknowledged that they have the ability to audit PBMs; however, they chose to push that responsibility to the managed care organizations (MCOs).
Further, while transmission fees charged by the PBM are required to be disclosed and applied at the time of adjudication of a pharmacy claim, they are not deducted from the MCO reported costs utilized to calculate capitated payments, allowing PBMs to further inflate the cost of prescription drugs and profit at the detriment of the Commonwealth's taxpayers.
House Republicans have been at the forefront of the fight to restrain secretive costs implemented by PBMs, first through Act 120, Act 98 of 2022, and most recently from Rep. Valerie Gaydos (R - Allegheny) with Act 77 of 2024. With inflation driving the cost of everything up over the last three years - including prescription drugs - it is crucial that we take immediate steps to save money. Auditor General Timothy DeFoor has identified several recommendations that DHS should urgently consider not only to comply with existing law but to further address transparency and ballooning costs in Medicaid.
Press Inquiries:
Rep. Cutler: Mike Straub [email protected] or 717-260-6397
Rep. Grove: Charlie O'Neill [email protected] or 267-303-7028
Representative Seth Grove
196th District
Pennsylvania House of Representatives
Media Contact: Charlie O'Neill
717.260.6121
[email protected]
RepGrove.com / Facebook.com/RepSethGrove
Share