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Ohio Medicaid Got Rid of Big Middlemen. Says it Paid Pharmacies a lot More — and Saved $140M

Pharmacy middlemen working in Ohio on behalf of huge health conglomerates have long claimed they keep down drug costs. But a report released last week calls that into question. The Ohio Department of Medicaid had been burned in the past by the big middlemen. And pharmacies across the state for years had said their Medicaid reimbursements were so scant that it was hard to stay in business. So the Medicaid department in 2022 gave the big pharmacy benefit managers — or PBMs — the boot and created a new system of paying for drugs.The result: Dispensing fees paid to pharmacies were boosted more than 1,200% on average — and the new setup still achieved savings of $140 million over a two-year period, according to a study done by Milliman, the Medicaid department’s actuarial firm. At the same time, the system managed to sign up nearly every pharmacy in the state, the report said. That makes medicine more accessible to Medicaid patients, who often lack access to reliable transportation.“Bottom Line: The (new system) delivers on its goals of accountability, transparency, and fairness – While doing so at a significantly lower administrative overhead cost to taxpayers,” the Medicaid department said in a cover letter to lawmakers that accompanies the study.

 

Why Treating Behavioral Health Like ‘Small Potatoes’ Is Costing Payers Big

Payers could be better aligning their incentives with behavioral health patients and providers by giving parity more room to breathe within their organizations. Payers often bury the duty of ensuring behavioral health-physical health parity in a compliance or legal department. Such a structure prevents the necessary cultural and strategic alignment that payers need to establish to ensure that parity’s objective of increased access and diminished barriers to care becomes a reality, Brett Hart, vice president of behavioral health and mental health parity at Blue Cross Blue Shield of Minnesota. Referring to a now famous Milliman study, Hart pointed out that patients that experience behavioral health challenges account for a disproportionate amount of spending on services. Specifically, the study found that 27% of an observed population with behavioral health issues accounted for 56.5% of all health care spending. Depending on the condition, behavioral health patients had health care spending that was 2.8 to 6.2 times higher than those without behavioral health conditions. 

 

Final NatCon25 Discount - Last Chance to Save $100

Time is running out to save $100 on your NatCon25 registration! Register by Monday, April 21, to take advantage of this special discount and be entered into our Experience Philly Fully giveaway. Five lucky winners will score a Philadelphia CityPASS, which grants them free admission to the city’s top attractions. It’s the perfect way to explore Philly after three days of nonstop learning and networking!

 

Community Leaders Raise Alarm Over Medicaid Ahead of Budget Vote

More than 700,000 low-income Ohioans could lose Medicaid coverage if the federal government reduces its funding. Sandra Black, a single mother caring for her medically complex daughter, relies on Medicaid expansion for health insurance after leaving her job to become a full-time caregiver.

A provision in the governor’s proposed budget would automatically end coverage if the federal contribution drops below 90%. Advocates like Teresa Lampl from the Ohio Council warn this "trigger" could have devastating impacts unless it's revised to allow flexibility.

While the House added a transition period to help people find alternative coverage, Lampl says it's not enough without changing the trigger language. With the Senate still finalizing its version, families like Sandra’s are urging lawmakers to protect vital coverage.

 

Invitation to NAMI's Statewide Advocacy Luncheon - May 6, 2025

Dear Ohio Council Members:

I hope this message finds you well. I’m reaching out personally to invite you to a very special event hosted by NAMI Ohio, the state’s largest mental health advocacy organization. As you may know, we are committed to supporting individuals and families affected by mental illness, representing over 500,000 Ohioans, and providing essential services to approximately 40,000 people each year through our free programs, educational resources, and outreach.

On May 6th, we’ll be hosting our Statewide Advocacy Day Luncheon at the Ohio Statehouse, and it would be a true honor to have you join us. This event will bring together over 200 volunteers and leaders from across the state for an afternoon of personal testimonies, updates on the state budget, and celebration of our advocacy efforts in action. It’s a powerful opportunity to connect, learn, and share in the work we’re doing to make a real difference.

Please join us on May 6th at 11:00 AM in the Ohio Statehouse Atrium. We’ll be enjoying a delicious catered lunch by Milo’s and sharing stories with advocates from all corners of Ohio.  Kindly RSVP and REGISTER HERE to let us know you’ll be joining us.

Reach out with any questions.

Thanks, Luke Russell, Executive Director

 

 
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