Iowa Medicaid Audit Reveals PBM Tactics Obscuring Drug Costs, Overcharging Taxpayers
An audit of Iowa's state Medicaid records found that pharmacy benefit managers (PBMs) used complex strategies for prescription drug claims, potentially overcharging taxpayers. One large PBM reportedly generated over $100 million between 2019 and 2021 by adjusting payments to pharmacies without fully passing savings to state-managed care plans. The review identified what were described as 'creative accounting maneuvers' that obscured money flow and circumvented bans on certain controversial pricing practices now illegal in Iowa and other states.
An audit of state Medicaid records in Iowa has uncovered methods reportedly used by pharmacy benefit managers (PBMs) to obscure prescription drug costs and overcharge taxpayers.
The review focused on Iowa's state Medicaid program, scrutinizing records from 2019 through 2021. It indicated that one significant PBM appeared to have made more than $100 million. This was allegedly achieved by modifying the amounts paid to pharmacies without relaying all the savings to managed care plans working on behalf of the state, according to Iowa officials.
Auditors identified what they termed "creative accounting maneuvers" that not only made it difficult to trace the flow of money but also seemed to evade prohibitions on a controversial pricing practice. This practice is now outlawed in Iowa and several other states.
The findings from Iowa's audit are consistent with conclusions from similar reviews conducted in a few other states, highlighting ongoing concerns surrounding PBMs within the pharmaceutical supply chain.
According to STAT News, this underscores persistent controversy concerning these crucial middlemen.
