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Louisiana health department returns pharmacy management to Medicaid managed-care plans, citing policy misalignment
Summary
The Louisiana Department of Health said on Sept. 22 it will transition pharmacy management back to six managed-care organizations effective Oct. 1 after concluding the single-PBM contract did not align with departmental goals for member care and program cost control.
The Louisiana Department of Health announced the state will transition pharmacy management for Medicaid away from a single PBM back to the six Medicaid managed-care organizations, with a go-live date of Oct. 1, under testimony by LDH undersecretary Drew Maranto during the advisory council meeting on Sept. 22.
Maranto, identified in his testimony as undersecretary and interim Medicaid director, said the department decided to reverse the single-PBM approach after concluding that the original contract and implementation did not place the department in a strong operational position. "As of April, the department made a decision to transition away from the single PBM that we were currently using and send that function back to the 6 managed care plans," Maranto said. "I am happy to report there has been a tremendous amount of work to get this done, in just a few months. And so that go live is October 1."
Maranto said the single-PBM contract began Oct. 28, 2023, under a prior procurement and that the department found misalignment between the PBM contract terms and the state's goals for member outcomes and cost management. He and Department of Health Secretary Bruce Greenstein both described structural problems: Greenstein said the contract "held no risk to the cost, but the plans maintained the risk," and that the imbalance contributed to rapidly rising drug spending during fiscal 2025.
Maranto said the department's immediate priority was to execute the transition without disrupting pharmacy access for members and to make sure members receive new cards and understand plan changes. He said the department will continue work on longer-term managed-care contracting decisions as the current managed-care contracts approach expiration.
Ending: LDH asked for cooperation from managed-care plans and other stakeholders during the near-term transition and said the department will outline next steps for managed-care procurement and pharmacy benefit design in coming weeks.
