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State Seal Commonwealth of Kentucky Governor Ernie Fletcher’s Communications Office
Governor Fletcher Announces Kentucky To Join Medicaid Purchasing Pool
Press Release Date:  December 3, 2004

Gwenda Bond 
Gil Lawson


Medicaid Safety Improvements Start Dec. 4

FRANKFORT, Ky.  - Governor Ernie Fletcher announced today plans for Kentucky to join a multi-state drug purchasing pool to negotiate better discounts and lower the cost for the Medicaid program.

The Governor also announced that beginning Saturday, Dec. 4, the Kentucky Medicaid program will start offering better safety features to protect patients who are getting medications through its new pharmacy benefits administrator, First Health Services.

Kentucky is facing a $526 million shortfall for the 2004-2005 fiscal year in its Medicaid program, a joint state-federal health care program for low income families and people with disabilities. The Fletcher Administration and the Cabinet for Health and Family Services have been working on a Medicaid Modernization plan to improve the quality of care and to bring about cost savings.

Governor Fletcher said Kentucky would be joining eight other states (Michigan, Vermont, New Hampshire, Nevada, Maine, Hawaii, Arkansas, and Montana) in the National Medicaid Pooling Initiative, the nation’s only Centers for Medicare and Medicaid Services-approved pool of its kind. Kentucky expects to save $42.2 million annually by participating.

“This will help Kentucky hold down the rising cost of pharmaceuticals by increasing the states supplemental rebates,” Governor Fletcher said. “It will also help Kentucky avoid doing what other states have had to do -- which is remove vulnerable and needy persons from the Medicaid rolls and reduce services.”

Kentucky filed plans today to seek approval from the federal government to participate in the pool, which began in April and currently has a combined purchasing power of $2 billion. Once approved, Kentucky will authorize First Health Services, the state’s pharmacy benefits administrator, to pool drug purchases with the other states. Kentucky’s Medicaid program spent approximately $750 million for drugs last year.

Other regulatory changes have been filed to increase efficiency and allow First Health to administer pharmacy claims. Combined with the purchasing pool, these initiatives are estimated to save $69.2 million a year.
First Health Services is also administering a new pharmacy claims system that will go into effect Dec. 4. It will provide patients and providers more tools to warn for dangerous drug interactions or dangerously high doses for Medicaid recipients.

“These are some of Kentucky’s most vulnerable citizens and we want to ensure they are receiving quality care when they go to the drug store to get their medications,” Governor Fletcher said. “This system will ensure that we’re taking the best care of our people.”

The Kentucky Medicaid program retains control over the pharmacy program while First Health Services provides the technology and expertise to improve quality.

Some 33,000 Medicaid members receive eight or more prescriptions a month. Some could be taking dangerous combinations of drugs that could lead to hospitalization. A recent review of Medicaid members taking medications for mental illnesses found that hundreds are taking dosages that far exceed the U.S. Food and Drug Administration’s recommended levels.

Health and Family Services Secretary James W. Holsinger Jr., M.D., has been explaining some of the Medicaid Modernization initiatives to legislative committees, provider groups and groups representing Medicaid members. The plan includes benefit management, disease management and technology improvements in the $4.3 billion Medicaid program.

“This is the first phase of our Medicaid Modernization project,” Dr. Holsinger said. “We have many other initiatives in the works to improve the quality of care for our Medicaid members.”



Last updated: Thursday, June 02, 2005