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Legislative committee discusses Medicaid reform

The Senate Finance Subcommittee on Medicaid convened this week at CareSource headquarters in Dayton. CareSource is an independent non-profit, Medicaid managed care organization serving roughly 950,000 Ohioans statewide.

The hearing was one of a series of meetings scheduled since passage of the state budget, which did not include expansion of Medicaid to roughly 275,000 uninsured individuals within 138 percent of the federal poverty level. Some legislators have indicated they will not vote for expansion without substantial reforms to the current system.

Panel testimony was provided by representatives from each of the plans serving the state’s Medicaid population through the Medicaid program and the dual eligible program that begins in the first quarter of 2014. The conversation largely focused on Medicaid reforms that have been successful in recent years—reforms such as care management and coordination, savings from carving pharmacy benefits back into the program, payment reform, and quality payments focused on outcomes.

David Amerine, Vice President for Regulatory Affairs at Buckeye Community Health Plan, shared the plan’s success in maximizing generic drug utilization in the therapeutic class Proton Pump Inhibitors since 2011 when pharmacy benefits were integrated back into managed care. According to the most recent claims data, the use of a generic prescription yields a savings of $71.00 per prescription. The plan has increased generic usage in this therapeutic category 10 percent over the past two years, resulting in substantial savings.

Dr. Craig Thiele, Chief Medical Officer for CareSource, told the committee higher healthcare costs do not directly correlate to better health outcomes. He highlighted work with the administration to implement innovative strategies moving payment models toward paying for quality outcomes, rather than paying for volume of services. Dr. Thiele discussed a program CareSource has implemented called Medication Therapy Management (MTM), which pays pharmacists for successfully delivering a service that reduces the volume of unnecessary, duplicative or inappropriate medications. The program has yielded $3.5 million in cost savings over the first year and saved an estimated $10 million in medical cost avoidance.

Legislator outlines proposed changes to renewable and energy efficiency standards

Senator Bill Seitz (R-Cincinnati) recently provided a glimpse of what to expect when he drops a substitute bill making changes to the state’s renewable and advanced energy portfolio standard this fall.

The revised code currently requires that 25 percent of the electricity sold by each utility or electric services company be generated from alternative energy sources by 2025. Additionally, utilities are required to implement energy efficiency programs to achieve a 22 percent reduction in usage by 2025. Seitz said his bill will not make changes to these benchmark requirements.

Seitz does intend to remove the requirement in current law that one half of the renewable energy benchmark must be generated at facilities located in Ohio. He said a recent Seventh Circuit Court of Appeals decision indicates the preference in current law violates the Commerce Clause in the U.S. Constitution. Instead, language will be included that requires that the renewable energy generated is in fact deliverable to the state.

While he will not propose scrapping the energy efficiency standard, Seitz will propose a cap on the amount utilities must spend per year to satisfy the requirements. Additionally, he intends to allow industrial customers the opportunity to opt-out of energy efficiency programs. These large payers of energy efficiency riders argued during committee hearings earlier this year that they are already incentivized to reduce consumption to reduce operational costs.

Substitute bill language will be released this fall. The proposal is expected to face lively debate in the coming months.

For more information, please contact:

Michael Caputo
(non-attorney professional)

Rebecca M. Kuhns
(non-attorney professional)

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