2022 Pennsylvania Medicaid audit reveals $7M in improper "spread pricing" due to Department of Human Services transparency gap.

Pennsylvania's Auditor General Tim DeFoor reported $7 million in improper "spread pricing" in the state's Medicaid program in 2022, according to a recent audit. The report claims that the Department of Human Services (DHS) allowed this transparency gap, leading to paying more into the Medicaid program than necessary for prescription drugs. Spread pricing refers to the difference between reimbursements a pharmacy benefit manager (PBM) pays a pharmacy for a prescription and the cost it charges the health plan. DeFoor's report recommends adding clearer definitions for transmission fees, spread pricing, and pass-through pricing into state law.