California redefines pharmacy benefits using fee-for-service programs

The California state government is changing Medi-Cal beneficiaries, away from managed-care plans to fee-for-service (FFS) programs, possibly affecting Rancho Cucamonga residents.

This transition will standardize Medi-Cal pharmacy benefits by expanding a pharmacy network to encompass around 97% of in-state drugstores. It should give California more negotiating power when dealing with drug manufacturers on rebates. Under FFS programs, the Department of Health Care Services (DHCS) will reimburse pharmacies for the cost of acquiring prescription drugs. Health insurance companies could add a Logo Design to their electronic documents, detailing a patient’s payment information.

The DHCS used to administer Medi-Cal by paying managed-care plans to cover a portion of the price of prescriptions. Despite establishing a system of care for its members, these beneficiaries were restricted to only obtaining drugs from inside their pharmacy network. The upside was that members had access to quality providers, particularly on the preventive and primary care end.

The DHCS was granted a five-year contract to a branch of Magellan Health, to regulate statewide pharmacy coverage, effective January 2021. The problem is that this forces members to call two separate numbers for getting the status on their health plans. However, Medi-Cal is no longer responsible for pharmacy benefits, moving its operations to a centralized function in Sacramento.

The new FFS program offers coverage for activities like processing outpatient drug claims, drug rebate administration, and authorizing customer transactions. In the future, there might be local interventions to supply medication to individuals on Medicaid plans.

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