Investor Presentaiton
Objective, Scope, and Methodology
Objective
1. Assess the value PBMs provide to the Medicaid program and identify opportunities for
improvement.
2. Determine whether OHA's contract monitoring practices with CCOS and their PBMs are
adequate. Identify and report on potential conflicts of interest existing within the current CCO
and PBM structure.
Scope
Our audit tested coordinated care retail pharmacy claims from January 2021 to December 2021 and
aggregated rebate and payment information from PBMS and CCOs from January 2017 to December
2021. Our testing did not include prescription drugs given in a hospital setting or administered directly
by a physician.
Methodology
To address our objective, we conducted interviews with multiple stakeholders, including OHA, DCBS,
members of the Legislature, auditors from other state audit offices, staff from U.S. Senator Ron
Wyden's office, community pharmacists, pharmacy industry associations, patient advocacy groups, and
PBM industry representatives. We also reviewed state rules and statutes related to the program and
our objectives.
We obtained final paid Medicaid claims data from OHA and pharmacy claims data from CCOS and their
corresponding PBMS which included fields like recipient ID, date of services, unique transaction number,
admin fees, dispensing fees paid to the pharmacy, ingredient cost paid to the pharmacy, and total
amount paid on the claim. The OHA data was joined to the PBM claims data. To assess the reliability of
the data, we traced a small sample of randomly selected claims to the originating system to provide
reasonable assurance the information we obtained was complete and accurate. Additionally, we
performed a variety of data verification techniques such as comparing control totals, verifying data
formatting, and logic tests. We did not verify the reported amounts paid by the PBMs to pharmacies
and it is possible that other transactions were not captured in our testing.
We judgmentally selected 13 different drugs to test based on the total dollars spent and number of
claims. The testing population was comprised of 18 different NDCs covering those drugs and we used
Oregon average acquisition data from Myers and Stauffer and National Average Drug Acquisition Cost
data to calculate the estimated pharmacy profit or loss. We tested 316,755 coordinated care retail
pharmacy claims covering $101,415,161 in costs.
As part of our audit, we calculated the estimated profit or loss pharmacies made on reimbursements
related to 13 different prescription drugs in 2021. The drugs selected for testing were combinations of
commonly prescribed and drugs with larger total aggregate payment amounts. To do this, we multiplied
the Oregon or national average acquisition cost for each drug by the quantity billed for the appropriate
Oregon Secretary of State | Report 2023-25 | August 2023 | page 33View entire presentation