US Medicaid drug bill "pay and chase" failing

The "pay and chase" system of settling US Medicaid drug bills, underwhich the program pays the bill and then gets the money back from the private insurer which owes it, is failing, says a new report from the Office of the Inspector General of Health and Human Services.

The system was introduced as a seemingly more efficient way to collect money for prescription drugs but, out of $440 million owed in 32 US states in 1999, only $73 million was ever collected, says the study. It calls on the HHS to investigate whether states which do not have permission to use "pay and chase" are in fact doing so, and says that those which do use it should monitor the funds which they manage to recover. It also calls for legislation to give Medicaid up to three years to recover such money and to make clear that pharmacy benefit managers are third-party Medicaid payers.