While a one-year budget proposal passed out of the House of Representatives, the governor’s proposed budget was incorporated into the Senate’s version, ultimately becoming the basis for the bill that passed.

Two particular items in the 510-page document may impact physicians and medical practices.

Pharmacy carve-out
HB 1001ss contained a proposal to carve out the Medicaid managed care organization (MCO) pharmacy program and have the Family and Social Services Administration (FSSA) manage it. This idea was advanced to help the state realize $20 million in savings in 2010 and $40 million in 2011.

This provision balanced the budget for Medicaid and prevented the Office of Medicaid Policy and Planning (OMPP) from resorting to any type of physician pay cut or holdback, as proposed in December 2008. (See Jan. 5, 2009 ISMA Reports, page 2, or visit here.)

As a result of the pharmacy carve-out, only one standardized drug list will exist for Medicaid patients, instead of the three currently controlled by the MCOs.

The ISMA and its Physician Medicaid Task Force have pursued the creation of one drug list for several years as a time-saver for those who care for Medicaid patients.

“Having to consult three drug lists has for too long been a hassle and a misuse of time for those of us who care for Medicaid patients,” said David J. Welsh, M.D., ISMA president. “We can now look forward to some consistency when it comes to prior authorization and drug formularies.”

Please take the time to visit here to register your opinion about what drugs should continue to be prior authorized by the Medicaid MCOs. Your input is important to this process.

And about reimbursement
“While physicians will receive no increase in reimbursements for delivery of patient care under Medicaid in the next biennium, there are also no proposed cuts,” said Michael Rinebold, ISMA’s director of Government Relations. “Not every state in the U.S. will be able to say that for the next two years.”

The fact that Medicaid reimbursement will not see cuts becomes more significant considering the state has experienced a $2 billion drop in revenues since December.

Beginning in January 2008, physician reimbursement for select evaluation and management services increased for the first time in 18 years. Bonus checks also were issued based on physicians’ past participation in Medicaid.

Proposed Rx pad program
A proposal in the newly passed budget would give Gov. Mitch Daniels the option of whether or not to implement a program to change how physicians and other prescribers obtain their prescription pad paper.

Under the plan, the state would contract with one source for prescription pad paper that would incorporate dozens of security measures in an effort to reduce prescription fraud throughout Indiana.

New York recently adopted such a program and reported it has saved more than $30 million of state taxpayer dollars. Estimates indicate Indiana would save roughly $17 million in the first year.

The appropriation to administer the Rx pad plan under the Indiana Board of Pharmacy was estimated at roughly $1.1 million per year. Initially, the proposed amount was $4.5-6 million. Physicians and other prescribers would benefit because the paper pads would be supplied at no cost.

The ISMA Government Relations staff will continue to monitor the governor’s plans regarding this program. However, execution of the program during the next two years is doubtful due to the initial start-up costs and the funds necessary to continually operate the program.

Watch ISMA Reports for future updates or news on this provision of the budget.