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Bentley Establishes Alabama Medicaid Pharmacy Study Commission

By Brandon Moseley
Alabama Political Reporter

MONTGOMERY—On Thursday, Alabama Governor Bentley (R) signed Executive Order 40 which establishes the Alabama Medicaid Pharmacy Study Commission. According to the Governor’s announcement the commission members will review the Alabama Medicaid pharmacy delivery and reimbursement system. The commission is tasked with comparing Alabama’s handling of Medicaid pharmaceutical benefits with programs in other states and will study options to reduce Alabama Medicaid’s pharmacy costs while still maintaining a quality Medicaid program.

The Commission will include, the State Health Officer (who will chair the commission), the acting Alabama Medicaid Commissioner, the Chairman of the Alabama Senate Health Committee, the Chairman of the Alabama House Health Committee, the Chairman of the Alabama Senate Ways and Means General Fund Committee, and the Co-Chairman of the Alabama House Ways and Means General Fund Committee. The Governor will also appoint a hospital administrator, a pharmacist who has his or her own independent pharmacy, a doctor, and other member(s) of the committee as believe needed by the Governor.

Many of ‘Alabama Political Reporter’s sources believe that the state could benefit from contracting with a pharmacy benefit manager (PBM). A PBM is a private company that set up a network of pharmacies that accept the PBM’s terms and provide prescription medication to beneficiaries. PBMs are responsible for processing and paying prescription drug claims and developing and maintaining the drug formulary. They negotiate deals with the drug manufacturers for additional savings. More than 210 million Americans receive their drug benefits through PBMs. Some independent pharmacists are concerned that if Alabama Medicaid goes to a PBM that they will be left out of the network in favor of larger chain pharmacies, such as Wal-Mart, Publix, CVS, Wallgreens, and Winn Dixie.

The commission is expected to present their findings to Governor Bentley by December 1, 2013.

Also on Thursday, Gov. Bentley signed Senate Bill 340 into law. SB 340 is set to reform Medicaid by increasing efficiency through transferring risk to Regional Care Organizations (RCOs) while improving care for Medicaid beneficiaries by moving from a fee for service system to a managed care system. The state is working with healthcare providers to set up the regions which are scheduled to be announced in October.

Medicaid reform has been a long-term goal for Governor Bentley. In 2012 the Governor established the Alabama Medicaid Advisory Commission to evaluate the financial stability of Alabama Medicaid. The Alabama Medicaid Advisory Commission preceded SB 340 which is based on the recommendations of the Commission. It is anticipated that some sort of Medicaid Pharmacy benefit reform legislation will be introduced in the 2014 legislative session based on the commission findings. SB 340 called for studies of the Medicaid pharmacy benefits, long-term care benefits, and dental benefits to be prepared in 2015 for the 2016 legislative session.

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State Health Officer Dr. Donald Williamson served as chair of the Alabama Medicaid Advisory Commission and similarly will head the Alabama Medicaid Pharmacy Study Commission. Dr. Williamson said on Thursday, “I want to thank Governor Bentley, Senator Reed and Representative McClendon for their support of Alabama Medicaid.”

Acting Alabama Medicaid Commissioner Stephanie Azar will also serve on the new commission as well as Representative Jim McClendon (R) from Springville and Senator Greg Reed (R) from Jasper.

Commissioner Azar said, “The transformation that will take place over the next few years will be significant. Medicaid is ready to take on this challenge and help the state move forward to create a program that will help support the long-term sustainability of Alabama Medicaid. I want to thank Governor Bentley, Senator Reed, Representative McClendon and Dr. Williamson for their leadership on this important issue and for their commitment to the health and well-being of Medicaid recipients in this state.”

Brandon Moseley
Written By

Brandon Moseley is a senior reporter with over nine years at Alabama Political Reporter. During that time he has written 8,297 articles for APR. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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