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Comparison of T-MSIS Prescription Drug Payment Data to Actual Pharmacy Reimbursements for Medicaid Managed Care

Effective oversight of growing prescription drug costs in Medicaid requires accurate and consistent data. Managed-care organizations (MCOs) are responsible for the majority of Medicaid enrollment and prescription drug reimbursements. The Centers for Medicare and Medicaid Services (CMS) established the Transformed Medicaid Statistical Information System (T-MSIS) to provide CMS, States, and other stakeholders with accurate and reliable Medicaid claims and encounter data to safeguard the Medicaid program. However, States' managed‑care drug claims data reported in T-MSIS may not uniformly represent drug payments across the Medicaid program. The data may contain the amounts MCOs or their pharmacy benefit managers (PBMs) paid to pharmacies or the amounts MCOs paid to their PBMs, which could include certain PBM fees known as "spread." CMS and States have expressed concerns that the use of spread pricing by PBMs lacks transparency and may inflate Medicaid drug costs. This evaluation will identify how States report managed-care drug payment data to T‑MSIS and determine the extent to which these data represent pharmacy reimbursements. Furthermore, we will identify how States ensure the accuracy of their T-MSIS managed-care drug claims data and use these data to oversee managed-care prescription drug expenditures and the PBMs' spread‑pricing practices.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
December 2020 Centers for Medicare and Medicaid Services Comparison of T-MSIS Prescription Drug Payment Data to Actual Pharmacy Reimbursements for Medicaid Managed Care Office of Evaluation and Inspections OEI-03-20-00560 2022