CareSource Moves to Reference-Based Prescription Drug Pricing

Health Insurer Seeks to Lessen the Volatility of Drug Pricing for Ohio’s Independent Pharmacies

(DAYTON, Ohio – October 27, 2020) – CareSource, a nationally recognized nonprofit health plan, announced starting February of 2021, they will begin basing prescription drug reimbursement for small, local pharmacy chains across the state of Ohio on National Average Drug Acquisition Costs (NADAC). Using NADAC pricing, which is surveyed through the Centers for Medicare & Medicaid Services (CMS), as a prescription drug reimbursement benchmark follows the Ohio Medicaid Fee-for-Service prescription drug reimbursement methodology. The announcement was made by Steve Ringel, CareSource Ohio Market President.

“This move magnifies the importance of our commitment to local, independent pharmacies by providing both transparency and stability to our critical access providers in order to help us achieve the highest quality of patient care for our members, particularly in rural and underserved patient populations,” said Ringel. 

“It’s no secret that pharmacists in Ohio have been looking for someone to step forward and redesign the pharmacy benefits model for the better,” said Ernest Boyd, Executive Director of the Ohio Pharmacists Association. “Pharmacy is complicated, and it takes a lot of work and motivation to unwind it and fix it. The Ohio Pharmacists Association applauds CareSource for rolling up their sleeves and building solutions for local providers who serve some of the most vulnerable populations.”

“CareSource’s shift away from a misaligned AWP-based pricing model toward a more transparent and market-driven pricing benchmark is a significant industry moment,” said Antonio Ciaccia, Senior Advisor for Disruptive Innovation and Practice Transformation for the American Pharmacists Association. “This move eliminates unnecessary complexity and helps insulate smaller pharmacies from the inherent dysfunction and erratic nature of status quo marketplace pricing models, and most importantly, it gives pharmacists the ability to focus less on the complicated business model of pharmacy and more on the well-being of the patient.”

“In the end, referenced-based pricing and value-based reimbursement allows pharmacists to focus more on patient care and that benefits all Ohioans,” added Ringel.

The new pricing methodology is the latest in a series of initiatives by CareSource to proactively change the pharmacy reimbursement environment that will allow pharmacists to spend more time taking care of patients. Earlier this year, CareSource launched a value based reimbursement program to incentivize pharmacies to target medication adherence and patient outcomes. Additionally, CareSource began reimbursing pharmacists for clinical services provided to Medicaid patients in Ohio.