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01/20/2020 06:49 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=29024
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: March 27, 2019 04:12 PM
From: Representative Jonathan Fritz
To: All House members
Subject: Authority to Audit Subcontracts with Pharmacy Benefit Managers
 

In the near future, I will be introducing legislation allowing for a full-scale audit of subcontracts with pharmacy benefit managers (PBMs) in Medicaid.

Almost 90 percent of Pennsylvania Medicaid patients are served by managed-care companies that contract with the state. In turn, those companies contract with PBMs for their pharmacy programs to decide which drugs will be covered and how much to reimburse the pharmacies that fill the prescriptions. According to the Department of Human Services, Pennsylvania taxpayers paid nearly $3 billion to PBMs for Medicaid enrollees in 2017.

Since contracts between managed-care companies and PBMs are not signed directly with the state and are instead subcontracts, there is no provision requiring that they be made available for anyone to review, including the Department of the Auditor General. Therefore, we do not know how this money is being used, regardless of the fact that these are taxpayer dollars. I believe there is a need for greater transparency, which is why I am introducing this legislation to ensure taxpayer dollars are being handled effectively and efficiently.

I hope you will join me in cosponsoring this important legislation.



Introduced as HB944