Efforts to Monitor Established Service Level Agreements for the Medicaid Pharmacy Benefits Manager Contract - 391-0117-25
Agency Description
The Pharmacy Management Division, Michigan Department of Health and Human Services (MDHHS), is responsible for overseeing the pharmacy benefits manager (PBM) contract. The current PBM contractor, Prime Therapeutics, processes pharmacy claims for the Medicaid Fee-For-Service program, as well as all pharmaceuticals that are carved out of the Managed Care Organization contracts. Prime Therapeutics also administers the drug rebate program, including calculating rebate amounts and invoicing drug manufacturers. The total contract value with Prime Therapeutics is $69 million for the approximate six-and-a-half-year period ended September 30, 2025.
To ensure accountability and performance, MDHHS monitors Prime Therapeutics through 44 service level agreements (SLAs) defined in the contract, which serve as key performance indicators for contract adherence and service quality. Examples of the contract SLAs include the accuracy of the contractor’s claims processing and the availability of the contractor’s online claims processing system used by pharmacies to submit pharmacy claims.
Audit Objectives
- To assess the sufficiency of MDHHS’s efforts to monitor service level agreements established in the Medicaid PBM contract.
Timing
Estimated Release Date: Mid 2026
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