April 14, 2026 · Medicaid Committee · 4,179 words · 6 speakers · 37 segments
Chairman Romanchuk, Vice Chair Huffman, Ranking Member Liston, members of the committee, thank you for the opportunity to provide sponsor testimony on Senate Bill 313. Senate Bill 313 makes important changes to Ohio law by requiring insurance and Medicaid coverage for scalp cooling systems, most commonly known as cold capping, for individuals receiving cancer chemotherapy treatment. Scalp cooling works by lowering the temperature of the scalp, restricting blood flow to that area, reducing the amount of chemotherapy which reaches the hair follicle cells and thus helping to prevent or reduce hair loss. This involves the use of a special cap or set of caps cooled to very low temperatures and worn for a period of hours before, during, and after chemotherapy treatment. It is important to emphasize that scalp cooling is not a cosmetic treatment. It's a medically recognized supportive care intervention. Hair loss is one of the most emotionally distressing side effects of cancer treatment and can significantly impact the patient's mental health, self-image, and overall quality of life. Studies show that up to 14% of women decline chemotherapy because they fear losing their hair. Expanding access to cold capping can help remove this barrier to life-saving treatment. And it's not only refusing the care, but it also could be delaying the care, because we can all come up with reasons why we want to look our best. we have a family wedding or a vacation or a job interview. So that delay in this treatment by factoring in the loss of hair could actually make things a lot worse. Many insurance companies already cover wigs for cancer patients, but also requiring coverage for scalp cooling, patients are given more choice and control over their care. While effectiveness can vary based on the individual, scalp cooling therapy offers a promising option for patients looking to preserve this piece of their identity. Beginning in January 2026, Medicare started covering automated scalp cooling. This coverage includes initial cap fitting and patient education, as well as pre-infusion and post-infusion cooling. Senate Bill 313 builds on this progress by ensuring broader, more consistent access to the supportive treatment. Similar legislation has already been passed in New York, Louisiana, and West Virginia, and is currently pending in at least 10 other states. And I want to take this opportunity to thank my constituent for bringing this to my attention, Jessica Huffman. She was actually instrumental in getting this passed in West Virginia, and it's now known as Jessica's Law in West Virginia. And another side note is since this legislation was introduced a while back, I've received so many unsolicited comments and positive support for this bill, just because people have seen what it is and they know they've been through it or they know someone that's been through it, and they understand the value of it. And in fact, this last weekend, I was talking to a friend of mine, and his daughter was receiving cancer treatment, and he had the means to pay for it. I asked him if it worked, and he said, it wasn't perfect, but it made a huge difference. So it is a very positive impact for those folks that are having to go through this. Thank you for allowing me this opportunity to provide sponsored testimony for Senate Bill 313. I'll be happy to answer any questions.
Thank you, Senator. Are there any questions? Senator Huffman.
What's your discussion been with the Department of Medicaid? Because most of the time, once Medicare falls in line, private's been signed, they tend to be a year or so behind. Have you had any discussions?
I haven't had any discussions with the Department yet.
Okay.
Are there further questions? Seeing none, thank you for your testimony.
Thank you.
This will conclude the first hearing of Senate Bill 313. Next, we'll do the minutes. The minutes should be on your iPad if you will take a look at that. And if there are any questions or changes, seeing none, is there any objections to the meeting or the minutes rather? Minutes are approved. Next, we will hear testimony for Senate Bill 387. Senator Blessing, you may proceed when you're ready.
Chairman Romanchuk, Vice Chair Huffman, Ranking Member Liston, and members of the Senate Medicaid Committee, I appreciate the opportunity to present my sponsor testimony on Senate Bill 387. This legislation seeks to ensure better alignment for coverage of critical mental health testing between the Ohio Medicaid program and the managed care organizations contracted by the state in the Medicaid program. Senate Bill 387 requires MCOs operating in Ohio to provide a pathway to coverage for pharmacogenomic testing when certain criteria are met. Ohio Medicaid fee-for-service has covered this testing for nearly a decade. However, a significant disparity exists within the managed care program. In fact, I'm aware of an Ohio-based company that has submitted approximately 5,000 claims over the last two years to Ohio contracted MCOs for its test that is covered by both Medicare and Ohio Medicaid fee-for-service and received exactly zero paid claims. That is not a pathway to coverage. It is a blanket denial for services covered within Ohio Medicaid by the MCOs. This type of inequity in access to these tests is detrimental to the mental health of Ohioans. Today, Ohio is grappling with rising levels of mental illness, worsened by a shortage of mental health providers and facilities, particularly in rural and underserved communities. This testing is primarily performed by frontline primary care workers, excuse me, primary care providers already struggling with the lack of resources to effectively treat depression and anxiety. Mental health care providers urgently need tools and solutions to address this growing crisis and assist their patients in recovery. Medication is the most common form of depression treatment, yet only a little more than one-third of patients reach remission on their first medication. Pharmacogenomic tests, which only need to be administered once in a patient's lifetime, evaluate genetic variants that affect how a drug is metabolized. Patients that hyper-metabolize the drug will never have enough in their system to reach efficacy without a dosage adjustment. Conversely, patients that hyper-metabolize the drug experience adverse events. Pharmacogenomic testing is supported by a large-scale randomized clinical trial independently performed in the VA that demonstrates its effectiveness in getting patients to remission quicker. For one of these tests, a recent meta-analysis of all Level 1 evidence showed that use of this testing can increase the likelihood of remission by 41 percent compared to treatment as usual. Swift stabilization of psychiatric patients by avoiding prolonged medication trials can prevent psychiatric hospitalizations unnecessary trips to state detention facilities and allow Ohioans to return to their lives and work sooner When mental health is managed effectively overall health care management improves For example, controlling severe depression enhances the management of comorbid conditions like diabetes or heart disease. Senate Bill 387 would ensure equitable access to this critical mental health testing for Ohioans by, one, requiring MCOs to cover pharmacogenetic tests for depression and anxiety when coverage has been established in Medicare and subject to the requirement that the treating physician is considering a drug that has a known gene-drug interaction. Two, allowing prior authorization while also addressing known barriers that insurers are known to place on laboratory tests that could frustrate or even entirely prohibit coverage for this testing. And lastly, providing strong penalties in the case of noncompliance. Pharmacogenomic mental health tests have already been covered by the federal Medicare program for over a decade and are covered under Ohio Medicaid fee-for-service as well as by many state Medicaid programs and some large commercial insurance carriers. This bill does not require regulated insurers to cover all pharmacogenomic tests for mental health. It closes the gap in equitable coverage that already exists for those tests that have met the high bar of achieving Medicare coverage. This is an issue that is important to the treatment of mental health for many Ohioans and deserves thorough debate in the legislature. Thank you for your consideration of Senate Bill 387. I'm happy to answer any questions from the committee.
Thank you, Mr. Chairman. Thank you, Senator Blessing. Thank you, Mr. Chairman. This will conclude the first hearing of Senate Bill 387. Excellent. All right. Thank you. Next, we will hear testimony for Senate Bill 386. Senators, proceed when you're ready.
Had to take a step back there and get a break. That's right. Chair Romanchuk, Vice Chair Huffman, Ranking Member Liston, and members of the Senate Medicaid Committee, thank you for giving me the opportunity to testify in favor of Senate Bill 386, also known as the Medicaid Savings Act. This bill seeks to save Ohio taxpayers between $450 and $850 million per year by converting administration of the Medicaid program from risk-based medical care organizations to non-risk-bearing administrative service organizations. The intention of the legislation is to invest 100% of the savings generated by this change in administrative structure into preserving and strengthening Ohio's existing Medicaid program, including the critically important and underfunded areas of primary care medicine and dentistry. The state currently contracts with seven insurance companies to manage 90% of its 3 million Medicaid patients, which cost Ohio $15.3 billion in 2024. The remaining 10% of Medicaid patients are receiving services through other service arrangements, which include direct fee-for-service. The average administrative overhead, or medical loss ratio, reported by these seven medical care organizations for managing Medicaid in 2024 was 9.1%, which works out to an aggregate overhead of $1.18 billion. There are currently two successful state interventions in the Medicaid program that have demonstrated conclusively that program overhead can be significantly decreased by switching the administration model from risk-bearing insurance companies to non-risk-bearing administrative service organizations. The first of these involves the state of Connecticut, which in 2011 terminated its contracts with three MCOs and handed over administration responsibilities to three non-risk-bearing administrative service organizations, or ASOs. The impetus for this was the legislature's inability to obtain accurate and honest information from their MCOs about how their overhead costs were structured. This change resulted in program medical loss ratio from 12% to 3%, a 14% drop in per member per year cost, and an overall savings to the state of more than $4 billion over the next 12 years. To place this in context, these savings occurred in a state with one-third the population of Ohio. Clinical improvements that occurred as a result of these savings included the following. Provider reimbursement for services rendered was increased to 71% of reimbursement for Medicare service reimbursement. In Ohio, the current reimbursement ratio is 56%, the seventh worst ratio in the country. Administrative complexity was significantly reduced by consolidating protocols for referrals, procedures, prescribing, and quality improvement monitoring under one roof. And lastly, because of higher reimbursement and less administrative hassle, the number of Connecticut providers willing to accept Medicaid patients into their practices increased. This resulted in more Medicaid patients establishing medical homes with medical and dental providers. Data indicates that this has resulted in decreased numbers of emergency room visits and hospitalizations. An additional finding is a steady increase in the number of early cancer diagnoses and five-year survival rates compared with surrounding states. The second successful Medicaid deprivatization intervention has been taking place in Ohio for the past three years, the deprivatization of Medicaid pharmacy benefit management. The legislature voted in 2019 to cancel the contracts of two for-profit pharmacy benefit managers, CVS Caremark and OptumRx. In response to complaints from the Ohio Pharmacy Association that PBM companies were paying lower refill reimbursement rates to independent and small chain pharmacies than to large chain pharmacies. A subsequent investigation conducted by AG Dave Yost confirmed these allegations, leading to the passage of a reform bill, which established the legal basis for ASO administration of pharmacy benefit management. The Medicaid office subsequently contracted with Gainwell Tech, a national company based in Texas with an office in Dublin, Ohio, to design, implement, and operate the program. Of interest, four members of this committee voted for this deprivatization bill, Senators Romanchuk, Liston, Huffman, and Wilson. The results of this bill are noteworthy. The single PBM system has been operational now for three years. Results from the first two years of operation have been impressive and include, one, the new system has resulted in gross savings to the state of $330 million and net savings of $140 million. Pharmacy reimbursement prescription has increased from a range of 75 cents to $9 per fill to a uniform reimbursement rate for all pharmacists of $9 per fill. Pharmacy participation in the Medicaid program has increased from 65 to 99 The number of pharmacy closures per year across the state has dropped to its lowest level in several decades Bottom line convenient access to pharmacy services is improved for Ohioans in every part of the state. In closing, the Medicaid Savings Act presents Ohio with a clear evidence-based opportunity to reduce administrative waste while reinvesting those savings directly into patient care. Both the experience of Connecticut and Ohio's own success with pharmacy benefit reform demonstrates that transitioning to a non-risk-bearing administrative model can lower costs, improve provider participation, and expand access to essential services. By adopting this approach, Ohio can strengthen its Medicaid program, support its healthcare workforce, and deliver better outcomes for the millions of residents who rely on it. With that, I'll turn it over to my joint sponsor. Thank you.
All right. Chair Romanchuk, Vice Chair Huffman, and members of the Medicaid Committee, thank you for the opportunity to speak about Senate Bill 386. All of us involved in Medicaid realize how complicated our system is. We have seven different managed care plans, a complex system of state-directed payment plans, special carve-out populations, and programs across multiple different agencies. In our system, we have a limited view into how money is actually spent by the managed care organizations, despite the transparency that all of us in Medicaid oversight are always looking for. As a result of this complexity, we have health care providers dealing with seven different systems, each MCOs with different processes and approaches, each doctor's office or hospital negotiating different contract terms, navigating different systems for denials, prior authorizations, and even just figuring out what services people can receive. Do we need all of this complexity? Every time Ohio has simplified this system, whether it was with a unified drug list or a single PBM, things have been easier for patients and providers. And as Senator Blessing pointed out, we saved money. So let's stop with the excessive layers of administrative barriers. Let's remove one of the middlemen taking a bite at the health care apple, taking roughly 15% of Medicaid dollars without decreasing costs or improving outcomes. Senate Bill 386 simply does this. It removes managed care organizations from our system and changes Ohio to a fee-for-service model. Ohio would then contract with an Administrative Services Only, or ASO, organization who's paid a set fee to efficiently administer Ohio Medicaid. This would improve transparency, decrease administrative waste, allow improved provider payments, and likely improve health outcomes. This approach is modeled after the Medicaid system in Connecticut, who switched away from managed care in the early 2010s. They've had notable success and many other states are looking at how to replicate this success within their Medicaid programs. In the first year that Connecticut enacted this ASO model, provider participation increased by 33%. They increased primary care physician payments closer to Medicare rates and solidified the concept of a medical home by having primary care doctors do the care coordination. Instead of paying insurance companies to try to organize patient needs, Connecticut asked trusted health care providers to do this. As you can imagine, satisfaction and outcomes improved. Emergency room visits decreased. This is how you actually decreased health care spending. The per person per month spending went down, and it's still notably lower than their regional peers. Connecticut's costs remain just below national average despite being one of the highest cost-of-living states, something that typically drives up labor costs and would predict a more expensive system. Medicaid administrative costs are only 3.8% of their expenditures compared with the estimated 9.6% administrative costs in MCO programs. All this is estimated because we do not have transparency into that. Connecticut's model spends their Medicaid dollars on patient care, not complicated red tape. Did Connecticut identify a magic bullet that will fix challenges in Medicaid, will fix all challenges in Medicaid? Clearly the answer is no. All states will work to make sure reimbursements are correct, costs are controlled, and that outcome measures are met. However, given the federal cuts scheduled in the next few years and the changes to provider taxes and state-directed payment plans that will hit Ohio hard, it's time to question our approach. We need to proactively look at how our program is going to weather these changes and continue to provide care to Ohioans who rely on it. A little more than a decade ago, Ohio switched to our majority-managed care model with the idea that competition and capitation rates would decrease costs for the states and that insurance company would do a better job of care coordination for Medicaid recipients. That simply hasn't happened both here and across the country. We've added complexity without value. We can fix that with Senate Bill 386. Thank you. We look forward to answering any questions that you guys have.
Thank you both for your testimony. Are there any questions? Senator Ingram.
Thank you, Mr. Chair. Thank you for this. I just have one question. and I'm sure there'll be more as we move forward. My concern is, from the federal level, did Connecticut have to do something special as far as a waiver in reporting or something of that nature, or did they just take the administrative services organization type of model and move forward on their own, or do we have to have permission in some sense as to how we report that back to the feds?
Any changes to Medicaid that are substantial would need to have CMS approval with an update to the state plan. That being said, the federal incentives are definitely moving away from the state-directed payment plans that we currently have. So I actually expect that to be – I mean, any changes are complicated. So yes, it'll be complicated, but I do think it more aligns with some of what they're looking at federally. And the bill allows for, essentially, creates a group, a working group, to look at how best to create the transition process. So it isn certainly isn going to be a sudden tomorrow it switches It have to have a process in place And yes the federal government will need to approve it Okay Senator Durenko So the answer is yes
Yes. The working group, what's the timeline?
Through the chair to the center, I don't believe there's a timeline specifically specified within the bill, but I will defer.
That's correct. But I did want to sort of piggyback on the last question here. And I get where your concern would be with respect to needing a waiver and, you know, some of the partisan back and forth on this. But, you know, given that Connecticut saved four billion dollars over 13 years for this, I think given where the federal government is with respect to debt, But I don't think they would bat an eye if this comes to fruition where they're like, hey, this really is saving a lot of money on this program. I think there might actually be a lot more coordination than we may be seeing today on that. So I just wanted to throw that out there.
Senator?
Thank you, Mr. Chair. And thank you for that, because I do believe that my concern with the big bill and some of what was already transacted with that is that here again, the intent is for any Medicaid savings to go back into Medicaid into Ohio. But my fear is that the more we save, the more they cut. And so are you concerned with that at all, or are we planning to get around that?
So, I mean, it is our intention, obviously, and our testimony to keep this in Medicaid, obviously, and the health care space generally. But, you know, irrespective of how folks feel about, you know, the O triple B.A., you know, it's a federal thing. You know, I would advise you to run for Congress and then you can fix that.
Through the chair to the senator, I always maintain that investing in the right places actually saves everybody money. If we're doing preventive care and focusing on those primary care decreased emergency room visits, then everyone wins. Further questions?
Senator Huffman.
Okay, just checking. I'll ask a couple. Speaking of the working group, is there a reason you didn't create a working group more on the front end to study this, to confirm all of the data that you've presented today and have that discussion prior to introducing a bill?
Sure. So, you know, I guess I am famous here for hating on study committees because we have standing committees to do exactly that. And at some point, you know, you need to move forward. My issue with the study groups is that having sat on them and chaired them, oftentimes the special interests will come in there and try to co-opt it to go the way that they want it to go. But given that Connecticut has seen some success with this, we have seen some success with this with pharmacy benefit managers, I see no reason to belabor the point. We can just go ahead and introduce this, hear it out in an actual committee.
Speaking of Connecticut, they saved allegedly $4 billion over a period of years. What happened to their outcomes?
As we stated in our testimony, outcomes went up. Participation in Medicaid by providers went up. It seems like there really hasn't been a lot of downsides to this, although you were smiling when you said that.
I'm curious how they measure the outcomes. What process did they use before and then after?
Good question. Through the chair. To the chair. As you know, it's really hard to measure outcomes. They use some CMS quality metrics. And because of the transparency, they produce pretty regular reports on those metrics, which allow them to adjust the program. So like any other Medicaid, there's a number, you know, there's a lot of quality metrics, like any other program, but there are a lot of quality metrics that are great, and there's ones that the reports say that they should be refocusing on. So I think as a whole, there's, you know, the reports say that the outcomes have improved by the multiple different metrics that are available. But I think even the ability to see it and see where they're investing and how they can improve it in and of itself is a quality improvement.
How did Connecticut incentivize primary care physicians to take on this extra burden of care coordination?
I was going to say, I mean, to the extent that, you know, MCOs have profits they're pulling in, all that administrative overhead, that all goes away and gets plowed back into the program. I mean, they're going to be paid more. I think that's a strong enough incentive to, you know, do something like this.
Through the chair. They paid them, right? Right now we pay MCOs to do care coordination. That's part of what goes into the per-member per-month rate, as well as we have the state-directed plans to try to improve care. And so if you take those funds and you give them to the providers to actually do that, you have someone that they know and who knows the patient that now has both the financial and the altruistic incentive to do that coordination.
So just to be clear, there would be a CPT code or a code that the physician would use to be reimbursed for their time doing care coordination, or is it just going to be expected to be included in all the rates that would be available?
I will pause and say I believe that there are CPT codes for care coordination. There are certainly time-based codes that can be used, but I think, although I am not positive, that Connecticut actually built it into some of the reimbursement rates with a general expectation. They also use DRG kind of grouping, so diagnostic-related grouping payments, so I don't know the specifics of that.
Okay. Senator Ingram, it looked like you had a question. Probably not.
You look very smart to me. Yes.
Okay, are there any other questions? Seeing none, that will conclude the first hearing of Senate Bill 386, you're welcome. Is there any other business to come before the committee? If not, we are adjourned.