Thread by @Celia_LJ

*Takes deep breath* Ok, time to talk about pharmacy benefit management. I know this sounds boring, but it is *anything but that.* And if you're a state employee, you'll definitely want to know what we learned about your prescription drug plan. So follow this🧵 #ksleg

What we're talking about here are a kind of middlemen who do the paperwork when you pick up your medications. Look at your health insurance card. You'll see your pharmacy benefit manager listed somewhere. Maybe it's CVS or OptumRx or Express Scripts, for example.

I know it seems like "middlemen" can't be too important, but these companies can make more money in a single year than your insurance company does or even the company that makes the drugs. That's why some states (and Congress) have been taking a much harder look at the middlemen.

Several states have audited their Medicaid prescription drug programs and have founds millions, or even hundreds of millions, more than they had realized went to the middlemen whom they had hired to do all the paperwork.

But how is that possible? How could states paying for those drugs not know how much of the money goes to the middlemen versus say, how much goes to the pharmacies that dispense the drugs? Well...

The middlemen are at the center of the money flow for the health plans they serve. They pay the pharmacies. They collect the money (e.g. rebates) from drugmakers, etc. And they consider a lot of the details of their work (such as deals with drugmakers) proprietary/trade secrets.

So believe it or not, the way many employers and Medicaid programs' contracts with middlemen work, it's *really really hard* for them to see what exactly they're paying for.

This is why audits are super important, and this brings us to talking about the health plan that covers state employees and retirees in Kansas, plus family members. About 80,000 people. #ksleg

Our series "Bills of Health" looks at cost of health care. We've looked a lot at hospitals and insurance so far, and now we were interested in how pharmacy middlemen affect health care. And Kansas happens to be a big public employer, subject to KORA. So we started there. #ksleg

So we asked to see the audit that Kansas got of CVS (the pharmacy middleman for the state health plan). What we weren't expecting was that Kansas would respond by redacting large swaths of the audit. #ksleg

The Kansas Department of Administration botched its redactions. So we were still able to read what was under the black text on many (but not all) of the pages. Look at this example. An entire cover page was deemed a trade secret:

The KS Dept of Admin won't let me interview its lawyer about these redactions. The dept said it was shielding trade secrets. But we asked experts in antitrust/commerce law and open records law. Their resounding response? "Um, what the what??????" Read➡️kcur.org/news/2021-10-0…

One antitrust lawyer called it "Orwellian" to construe antitrust law the way Kansas did. “This would allow every state agency to create a trade secret out of all information,” he said. “It gives them an opportunity to make otherwise non-confidential information, confidential.”

The state redacted details like how many prescriptions its employees picked up. The dispensing fees it pays to pharmacies. What discounts CVS promised. That story linked above is all about the legality issues regarding the state's redactions. Now, moving on to the second story...

The 2nd story: What does the audit tell us about CVS' handling of the Kansas employee/retiree health plan? In this case, the resounding response from pharmaceutical experts who read the audit was *also* "What the what?????" kcur.org/news/2021-10-0…

Kansas paid an external auditor $100k. CVS got sway over auditor choice in that the state is contractually required to pick one that CVS agrees to. Experts say the audit was 'poorly' constructed & done. They were flabbergasted to see that CVS got to write the conclusion to it...

They said KS should be really worried about loopholes in its contract with CVS that the auditors didn't dig into. E.g. one contract provision that let CVS keep for itself "administrative fees" related to drugmakers that could add up to more than $1m a year. #ksleg

Experts told me the audit doesn't nail down some of the most important questions that Kansans should want to know, such as whether CVS treats non-CVS pharmacies vs. its own stores fairly. B/c remember, CVS is middleman here. But it also owns a ton of pharmacies.

And so the problem for Kansans from a public accountability standpoint is threefold: (1) The audit was redacted. (2) The audit was rudimentary & problematic, according to experts. (3) CVS, the auditor, and the KS Dept of Admin all turned down interview requests to discuss it.

Contract loopholes and audit problems are things that the @NASHPhealth is trying to help states overcome & avoid. Many of the questions I found in KS are issues that the NASHP is trying to warn states about. NASHP says NOT to give the middlemen sway over choosing the auditors...

And @NASHPhealth worked with law professor @efusebrown to write model contract terms designed to stop the practice of middlemen accepting & keeping money from drugmakers. To do this, states have to get really detailed.

Actually, not just states. @efusebrown recommends all employers negotiate contracts that let them conduct rigorous, independent audits of pharmacy middlemen. And same goes for many of the other model contract provisions she wrote for @NASHPhealth here: nashp.org/model-pharmacy…

And that's where I'll leave this thread for now. Here are the stories. It would mean a lot if you would read them & share them. Thanks for reading this thread. #ksleg
(1) About the audit redactions: bit.ly/3il2qZ2
(2) About the audit itself: bit.ly/3AWL6km