Are there potential cost savings available to Michigans Medicaid program from the use of mail-order pharmacies?
Conclusion: We concluded that MSA could potentially reduce its maintenance drug expenditures if it implemented a mail-order program. However, MSA would have to obtain contractual provisions with a mail-order pharmacy (MOP) that are materially better than the mail-order pharmacy contracts we reviewed to realize significant savings. We performed a computer analysis of MSA’s data for 126 maintenance drugs to determine if MSA could realize potential savings by implementing a mail-order program. These 126 drugs accounted for $99.8 million (35.5%) of MSA’s $280.8 million total prescription drug expenditures during calendar year 1993. We compared MSA’s paid claim expenditures for these 126 drugs with two MOP scenarios based on Michigan Department of Civil Service MOP contractual provisions for State employees. One scenario resulted in a savings of $355,254 (1.6%) and the other scenario resulted in a loss of $614,460 (2.8%). (Finding 8) While conducting our audit procedures for this audit obje
