Idaho settles Medicaid overbilling case for $28M

The Idaho Attorney General has come to terms with several pharmaceutical firms that systematically overbilled the state's Medicaid program for prescription drugs.

The manufacturers, which include Watson Pharmaceuticals, Johnson & Johnson, Merck and 30 other firms, will repay $28 million, reported the Associated Press.

Idaho had reimbursed the pharma firms for their costs, plus a dispensing fee. However, the firms regularly inflated their wholesale prices. Watson, for example, charged the Medicaid program more than 15 times its wholesale cost, according to the AP. Idaho filed suit against the firms six years ago.

As part of the settlement, the drug manufacturers promised Idaho's Medicaid program price opacity, according to the Spokane Spokesman-Review. Previously, such prices were confidential.

Keeping the prices of drugs dispensed through the Medicaid program low and stable is one of the premises of the Affordable Care Act. However, there is a patchwork of regulations on how much states get paid in dispensing drugs, and there is little price transparency for hospitals and other providers that treat Medicaid patients, reported USA Today. The expansion of Medicaid eligibility under the ACA is placing more pressure on keeping prices uniform.

Because the federal government funds such a large part of the Medicaid program in Idaho, it will take nearly half the payment, about $13.6 million, according to the Spokesman-Review.

To learn more:
- read the Associated Press article
- here's the Spokesman-Review article
- check out the USA Today article

Suggested Articles

A select few legacy health organizations could thrive under a ‘Medicare for All’ system, according to a new analysis. 

The Congressional Budget Office estimates a Senate package tackling surprise billing and drug prices will save the government $7 billion.

Mahmee, a startup focused on maternal and infant health, just closed a $3 million funding round that includes Mark Cuban and Serena Williams.