Medicaid Prescription Drug Rebate program: A review

A helpful reminder of what rebates are for drugs covered under State Medicaid Agencies. ICER reports in their California, based on a helpful summary from the Kaiser Family Foundation: For brand name drugs, the [Medicaid] rebate is 23.1% of Average Manufacturer Price (AMP) or the difference between AMP and “best price,” whichever is greater. Certain…

Do narrow networks save money?

According to a recent paper by Wallace (2023), the answer is ‘yes’, but it does so in a highly inefficient manner. Using 2008-2012 Medicaid data from the New York State Department of Health, the author find that: Leveraging the random assignment of over 50,000 Medicaid enrollees in New York, I present causal evidence that narrower…

Factors impacting state variation in health care spending

A Health Affairs Forefront article by Johnson and Dieleman (2022) published last week using the Centers for Medicare and Medicaid Services’ (CMS’s) State Health Expenditure Accounts (SHEA) data. A previous study looked at these data through 2014, but the recent publication updates this analysis through 2019. The authors first use a age- and sex-standardized health…

Who pays more for hospital and physician services: commercial payers, Medicare or Medicaid? And how much more?

Many people might know that generally the answer is commercial health plans have the most generous reimbursement compared to government plans. However, a key question is how much more do they pay? Commercial vs. Medicare rates A January 2022 report by the Congressional Budget Office finds that commercial payers reimburse hospitals at 223% of Medicare…

Impact of drug coverage on mortality

Clayton 2019 is an interesting study on the impact of drug spending on Medicaid beneficiary mortality levels. The author uses variation in the roll out of Medicaid drug coverage by state across different Medicaid eligible groups in order to isolate plausibly exogenous variation in drug expenditures. Using this approach, Clayton finds that: …a $1 increase…

Dual Eligibles’ Medicaid Policy Database

Poor, elderly individuals who may qualify for both Medicaid (for being poor) and Medicare (for being elderly, blind, disabled or have ESRD). In these cases, Medicaid serves as a supplemental insurer, covering Medicare coinsurance and deductibles. The generosity of this supplemental coverage for so-called ‘dual-eligibles’ varies across states. These differences in Medicaid payments arise from…