Medicaid PBMs Save Money, Cause Headaches

Three million New Yorkers on Medicaid have recently started getting prescription drugs a new way — and healthcare watchdogs say there are still hiccups.

Since October, two-thirds of New York's 4.5 million Medicaid recipients have been required to go through managed care drug companies, known as Pharmaceutical Benefits Managers, to fill prescriptions.

The Legal Aid Society surveyed all 23 of the state’s new managed care drug plans. Most of the plans offered some basic information about how their official prescription drug list works. But 75 percent of the PBMs couldn’t explain to consumers how to get special approval for medications not on the list – and how to appeal rejections.

Lorraine Sepulveda, who testified at a state Assembly hearing on the new system, said she called the new system’s help line, but she initially couldn't get her son’s medication.

“They basically told me I need approval, and the lady didn’t know how I go about getting it — and that I need to get a generic brand,” Sepulveda said. “And there is no generic brand for his medicine.”

She eventually got the psychiatric drugs for her son, but not before he went a full week without them. 

The head of the state’s Medicaid division said there have been modest glitches in getting the new system up-and-running, but that overall there have been relatively few complaints.

Medicaid Director Jason Helgerson also testified the plan is already working fiscally and is helping reduce New York’s $4 billion-a-year prescription drug bill. Helgerson told the committee that the new PBMs are on track to  save the state more than $50 million in the first year.

”We have to do a good job implementing it, but we definitely think this is an important part of getting the Medicaid program to a sustainable footing moving forward,” Helgerson said.