SR0329 102ND GENERAL ASSEMBLY

SR0329 LRB102 18696 MST 27167 r

SENATE RESOLUTION

WHEREAS, The Medicaid program in Illinois has an immense and growing impact, both in terms of taxpayer dollars and in the effect it has on citizens across the State; and

WHEREAS, State resources for healthcare services are scarce, and many healthcare providers, including pharmacists, are discontinuing services or ceasing operation, leading to a profoundly detrimental impact on our communities and the expansion of pharmacy deserts; and

WHEREAS, Enrollment under the Illinois Department of Healthcare and Family Services' Medical Assistance Programs (Medicaid) exceeds three million; and

WHEREAS, A sizable portion of the Medicaid population is currently enrolled, often mandatorily, in Managed Care Organizations (MCOs), making outlays to MCOS, measured in billions of dollars, one of the largest resources used in the State; and

WHEREAS, 12,500 licensed pharmacists in Illinois provide medications and patient care services to assure the rational and safe use of all medications; and

WHEREAS, Pharmacists, as front-line health care providers, answered the call to aid during the ongoing COVID-19 pandemic and have taken on additional responsibilities of care and practice in order to best serve the public health needs of the citizens of the State of Illinois; and

WHEREAS, A significant number of pharmacists respond to the charge of their community to establish a pharmacy to provide access to care for their patients; and

WHEREAS, Pharmacies generate additional taxable revenue for the State and yet are continuously under-reimbursed below their cost on medications dispensed to meet their patient's needs; and

WHEREAS, A number of states have performed audits on managed Medicaid programs and the utilization of tax dollars, and states, such as Ohio, have found over $208 million in collected fees to the benefit of pharmacy benefit managers in a one-year period, in addition to other operational and business practice concerns; and

WHEREAS, Attorneys General, Auditors General, Comptrollers, and Insurance Directors have investigated, fined, or instituted court proceedings into the business practices of Pharmacy Benefit Managers (PBMs) in the states of Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wyoming, and in the District of Columbia; and

WHEREAS, The landmark December 2020 United States Supreme Court decision in Rutledge v. PCMA brought PBM operational and business practices and especially the reimbursement methodologies for pharmaceuticals into further question, including Chief Justice Roberts calling their business practices 'byzantine'; and

WHEREAS, There has been little information disseminated to the General Assembly in terms of how State resources are being spent on MCOs and on the overall healthcare outcomes for individuals enrolled in these MCOs; and

WHEREAS, It is paramount that the General Assembly stay engaged in Medicaid funding and corresponding healthcare outcome issues and be prepared to make legislative and administrative recommendations; therefore, be it

RESOLVED, BY THE SENATE OF THE ONE HUNDRED SECOND GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that the Auditor General, with the assistance of the Comptroller as necessary, is directed to conduct an audit of Medicaid MCOs, including contracted and previously contracted pharmacy benefit managers, which includes a comparison of State expenditures between MCOs and the Medicaid fee-for-service program; and be it further

RESOLVED, That the audit shall examine pharmacy benefits managers that contract with managed care organizations for the purpose of determining the amount of State and federal funds used to reimburse managed care organizations, pharmacy benefits managers, and pharmacies and the dollar amount of funds received by each respective party for fiscal year 2017, 2018, 2019, 2020, and 2021 with respect to the following issues:

(1) The amount paid to a pharmacy provider per each individual claim, including ingredient cost and the amount of any copayment deducted from the payment;

(2) The transmission fees charged by a pharmacy benefit manager to a pharmacy provider;

(3) The amount charged by the pharmacy benefit manager to the medical assistance managed care organization per claim, including all administrative fees and processing charges associated with the claim;

(4) Rebates paid by the pharmacy benefit manager to the managed care organization and any payment from a pharmaceutical manufacturer to a PBM;

(5) The Auditor General shall be provided with access to the following documents and information by either the managed care organization, the pharmacy benefits manager, or the pharmacy:

(a) Contracts between the managed care organization and the pharmacy benefits manager;

(b) Contracts between the pharmacy benefits manager and pharmacies receiving reimbursement;

(c) Full encounter claims data showing the amount the managed care organization paid the pharmacy benefits manager;

(d) Full encounter claims data showing the amount that was paid to the pharmacies by the pharmacy benefits managers;

(6) Information requested from the pharmacy benefits manager or the pharmacy via questionnaire by the Auditor General; and

(7) Any additional information or data required by the Auditor General or Comptroller to determine the actual reimbursement to the managed care organizations, pharmacy benefits managers, and pharmacies; and be it further

RESOLVED, That the audit shall further examine reimbursement issues for Medicaid MCOs, including contracted pharmacy benefit managers, for fiscal years 2017, 2018, 2019, 2020, and 2021 and should:

(1) Provide an overview of the distribution of and payment for pharmaceuticals in the medical assistance managed care program;

(2) Review the reimbursement practices of pharmacy benefit managers to pharmacies, including out-of-state pharmacies and pharmacies affiliated with pharmacy benefit managers;

(3) Review the reimbursement practices of managed care organizations to pharmacy benefit managers;

(4) Investigate and compare the reimbursement rates paid by pharmacy benefit managers to independent pharmacies and to chain pharmacies and to out-of-state pharmacies and to pharmacies affiliated with pharmacy benefit managers;

(5) Study the best practices and laws adopted by other states to address concerns with pharmacy reimbursement practices of pharmacy benefit managers; and

(6) Review any other data the Auditor General or Comptroller deems necessary to complete the audit; and be it further

RESOLVED, That the audit shall further examine reimbursement with a comparison, in aggregate on both a dollar level and per prescription basis, of what the Illinois Department of Healthcare and Family Services paid directly through its Medicaid Fee-For-Service (FFS) program versus what was charged through the MCO's to the Illinois Department of Healthcare and Family Services for Medicaid managed care prescriptions; such a comparison shall include the cost comparison to the top 200 drugs covered by the Illinois Medicaid prescription drug benefit FFS program, including all dispensing and other professional fees paid to Medicaid pharmacy providers, including comparison to out-of-state and pharmacies affiliated with pharmacy benefit managers; and be it further

RESOLVED, That the Auditor General shall publish only aggregate data in the report; any information disclosed or produced by a pharmacy benefit manager or a medical assistance managed care organization for the purposes of this audit shall be confidential; and be it further

RESOLVED, That on or before December 1, 2021, the Auditor General shall provide the results of the audit to the General Assembly; and be it further

RESOLVED, That the Illinois Department of Healthcare and Family Services and any other State agency having information relevant to this audit cooperate fully and promptly with the Auditor General's Office in its conduct; and be it further

RESOLVED, That the Auditor General commence this audit as soon as possible and report his findings and recommendations upon completion in accordance with the provisions of Section 3-14 of the Illinois State Auditing Act.