Honorable David Dewhurst, Lieutenant Governor, Senate
Honorable Joe Straus, Speaker of the House, House of Representatives
Ursula Parks, Director, Legislative Budget Board
SB1106 by Schwertner (Relating to the use of maximum allowable cost lists under a Medicaid managed care pharmacy benefit plan.), Conference Committee Report
The bill adds new requirements related to outpatient pharmacy benefits provided through Medicaid managed care regarding the use of maximum allowable cost lists. Managed care organizations (MCOs) contracted with the Health and Human Services Commission (HHSC) develop their own reimbursement rates and methodologies for their contracted providers. The maximum allowable cost lists used by MCOs and any subcontracted pharmacy benefit managers are considered proprietary and are not available to HHSC. Without access to the maximum allowable cost lists, HHSC cannot determine the impact of the provisions in the bill related to those lists.
HHSC does not expect the provisions to increase the amounts MCOs are required to reimburse pharmacy providers under Medicaid managed care, but if they did those increases would result in increases to the capitation rates paid to the MCOs, which would have a significant fiscal impact to General Revenue Funds and Federal Funds. Estimated capitation payments under Medicaid managed care total $2.4 billion in All Funds in fiscal year 2014 and $2.7 billion in All Funds in fiscal year 2015. Each one percent increase in those capitation payments would increase All Funds expenditures by $24 million in All Funds, including $10 million in General Revenue Funds, in fiscal year 2014 and $27 million in All Funds, including $11 million in General Revenue Funds, in fiscal year 2015.
529 Health and Human Services Commission
UP, CL, MB, LR, NB