LANSING – A major potential change to how the state allows for the management of prescription drugs for Medicaid patients is raising worries with the state’s Medicaid HMOs.

For 17 years, each of the Medicaid HMOs has had managed its own prescription services for the Medicaid patients in its system. As part of a rebidding process that will take effect next year, the state intends to have one manager for all prescriptions for all Medicaid patients in Michigan.

Besides worrying about revenues they could lose, the HMOs say the change could make patient management less efficient since they won’t be able to directly and quickly coordinate care based on a patient’s medications.

The change is difficult to discern in Governor Rick Snyder’s proposed 2015-16 executive budget. The state held a conference call with the HMOs on Wednesday to outline some aspects of the change, and then late on Thursday the Department of Community Health issued a press release outlining the proposal.

But HMO executives wasted no time in telling state officials of their concerns. A top official with DCH said Thursday the policy was the right one to pursue, but he recognized it would cause problems for the HMOs. One HMO executive had told the official that his entire pharmacy staff of 25 people would have to be laid off if the change took effect.

In announcing the planned change, DCH said going to one contracted pharmacy entity will allow the state to save money through greater pharmaceutical discounts and overall administrative efficiencies.

DCH also said it was planning the change because it had heard from the health care community that the current system has created “challenges” in administering care for patients.

But Rick Murdock, executive director of the Michigan Association of Health Plans, said the proposed change would create a “new silo” in the state that would delay information on a patient’s condition and whether other treatments need to be modified.

It also would make it more difficult for some of the plans to remain viable, he said. While a huge amount of money flows through the system to care for Medicaid patients, Murdock said, the margins that the HMO’s operate under are extraordinarily thin and have been getting worse.

HMOs once operated on margins of about 2 percent, Murdock said. They are now averaging margins of 0.8 percent.

“I think this is not a direction the governor wants to go in,” Murdock said. Not a single plan executive in the state supports the proposal.

The request for proposals for the state’s Medicaid contract is expected to be released in May, and the new contract is expected to be effective on January 1.

HICA: Governor Rick Snyder’s proposal to increase the assessment hospitals have to pay as part of the Health Care Claims Assessment was blasted by the Economic Alliance of Michigan as potentially hurting the state’s economic growth.

The proposed increase in the assessment would be passed on to companies and customers, the alliance said in a release. Automotive manufacturers alone spend millions of dollars on hospitals and the HICA tax now, the group said. It called for the state to cut health care costs instead to allow for companies to invest more into economic development.

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