New Jersey Assembly Bill A5588

New Jersey 2022-2023 Regular Session

• Introduced: 6/8/23
• Refer: 6/8/23

Caption

Requires prescription drug services covered under Medicaid program to be provided via fee-for-service delivery system.

Impact

The bill stipulates that reimbursements for covered medications will be determined based on the lower of several established price metrics, such as the National Average Drug Acquisition Cost (NADAC) and the provider's usual charges. By implementing this system, the bill seeks to ensure that pharmacies receive fair compensation for their services while also controlling the overall expenditure of the Medicaid program. This switch is projected to yield significant savings for the state, enhancing the financial sustainability of Medicaid drug services.

Summary

Assembly Bill A5588 requires that prescription drug services covered under New Jersey's Medicaid program be administered using a fee-for-service delivery system, transitioning away from the existing managed care model. The proposed legislation aims to standardize drug reimbursement calculations for various outpatient drugs. This change is anticipated to streamline reimbursement processes and potentially lower costs associated with prescription drugs for Medicaid beneficiaries in New Jersey.

Contention

Opponents of the bill may express concerns regarding the transition from a managed care model to a fee-for-service system, particularly emphasizing the potential impacts on timely access to medications and overall healthcare delivery. However, proponents argue that adopting fee-for-service has demonstrated cost savings in other states, such as West Virginia and New York, suggesting that similar benefits could be expected in New Jersey. Such moves could lead to a legislative debate about which model provides better patient outcomes and cost efficiency in the long term.