In recent months, controversy over the Ohio Medicaid program has provided a rare window into some of the fees paid to pharmacy benefit managers and the subsequent effect on prescription drug costs. Now, an audit finds a new twist: A managed care plan that contracted with the state program collected $20 million through a curious arrangement that has raised concern among state officials.
Specifically, the Buckeye Health Plan is one of a handful of managed care plans hired by Ohio Medicaid to provide prescription drug benefits. The plans, in turn, contracted with two PBMs — CVS Caremark (CVS) and Optum Rx — to do much of that work. However, the plans were recently told to end the contracts over pricing practices that cost the state tens of millions of dollars.
But there was another detail that, until now, went unnoticed. Buckeye contracted with CVS, but also hired yet another company called Envolve, which is a pharmacy benefits administrator, to provide ostensibly distinct services. Both Buckeye and Envolve, as it turns out, are owned by Centene, a health insurer that works with government health care programs.
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