Nick Mueller says he’s had delays in getting his asthma inhaler since Cenpatico took over Southern Arizona’s public behavioral-health care system.

Tucson behavioral-health providers say they have seen surging pharmacy spending since Cenpatico Integrated Care took over Southern Arizona’s public behavioral-health care system. At the same time, the number of prescriptions written for behavioral-health patients appears to have declined in the past year.

Three local behavioral-health agency leaders say the limited pharmacy data they have from Cenpatico indicate average monthly pharmacy spending on their patients soared by 53 to 83 percent this year.

“I’ve never seen anything like that level of increase in that short a period of time,” said Rod Cook, chief financial officer at COPE Community Services, where pharmacy spending has gone up 74 percent.

Cenpatico and AHCCCS, the state’s Medicaid agency, attribute the spending rise to a drug-company rebate program that has resulted in more brand-name prescribing this year.

Pharmacy spending for the three behavioral-health providers — COPE, La Frontera Arizona and CODAC Health, Recovery & Wellness — was up significantly compared with average monthly spending during the last full year with Pima County’s previous regional behavioral-health authority, the nonprofit Community Partnership of Southern Arizona, called CPSA.

The three providers are Tucson’s largest behavioral-health agencies and usually act as the starting point for patients seeking public behavioral-health services.

The comparison between Cenpatico and CPSA expenditures has weaknesses: The providers requested pharmacy data from Cenpatico but got back only selected monthly spending data for different time frames — three, two or one month. For example, CODAC’s increase of 53 percent was based on just one month of spending data from Cenpatico.

Before Cenpatico took over the region’s public behavioral-health system last year, Tucson providers got block payments to cover pharmacy costs for their patients, and providers could closely monitor spending trends. Now Cenpatico and its sister company U.S. Script — a pharmacy benefit manager — handle the pharmacy benefit directly, subtracting expected pharmacy costs in advance from monthly payments sent to contracted providers. That means providers no longer have spending data in-house.


Pharmacy spending factors include doctors’ prescribing habits, drug innovations that result in better but more costly medications, drug company pricing, medical inflation and fees paid to a third-party pharmacy benefit management company.

The impact of fees paid to the pharmacy benefit manager is unclear: The Star obtained a copy of Cenpatico’s contract with its sister company U.S. Script through a public records request, but the compensation that U.S. Script receives was redacted.

Cenpatico is one of three regional behavioral-health authorities that contracts with the state’s Medicaid agency, the Arizona Health Care Cost Containment System, or AHCCCS, to administer behavioral-health insurance to low-income people on Medicaid. That coverage is funded by state and federal dollars that AHCCCS funnels to regional behavioral-health authorities, which distribute funds to contracted behavioral-health providers.

Cenpatico, a subsidiary of the publicly traded insurance giant Centene Corp., took over the behavioral-health contract for the eight-county Southern Arizona region in October 2015. Before that, nonprofit CPSA handled the Pima County contract for 20 years.

Sen. Dave Bradley, D-Tucson, said a full explanation for significant spending increases is crucial to ensure accountability for how public dollars are spent.

“The more transparent you can be, the better,” said Bradley, who has worked in behavioral health for 35 years. “Maybe it’s simply the increased cost of medications, but if you leave this cloaked, it’s hard for people to come to the same conclusions you’re coming to.”


AHCCCS Deputy Director Beth Kohler said the increase in pharmacy spending is likely explained by a national drug-company rebate program.

Drug companies give rebates to government agencies like AHCCCS in the hopes of getting their medications on the agency’s preferred drug list. That’s resulted in more brand-name drugs on AHCCCS’ preferred drug list, but the rebate funds should more than offset any spending increases, Kohler said. Savings from the rebates go directly to AHCCCS, so they aren’t reflected in Cenpatico’s bottom line.

Kohler said she’ll know more once AHCCCS fully analyzes its contracted companies’ financial records later this year to determine whether it should adjust what it pays contracted managed care organizations, she said.

A recent review of overall — not just pharmacy — spending trends among regional behavioral-health authorities shows that Cenpatico, covering Southern Arizona, came in with higher expenditures than Maricopa County’s regional behavioral-health authority, Mercy Maricopa, but lower expenses than Northern Arizona’s, Kohler said.

Dan Ranieri, CEO of La Frontera, said pharmacy records for his agency’s patients indicate that doctors were prescribing slightly more brand-name medications in the past year, but the rate is still very low.

“Based on our review, it’s still well in line with, and in fact probably better than, the national averages,” he said. “I don’t think we have enough data at our level to fully explain the increase.”

The spending increase does not appear to be due to more prescribing by doctors. The number of prescriptions went down over the past year for patients, the three providers said. But compared with CPSA, per-prescription spending has increased by an average of 145 percent under Cenpatico, according to the months of data available.

In addition to psychiatric prescriptions, Cenpatico’s pharmacy expense data included drugs to treat medical conditions for enrollees with serious mental illness, who now get their medical and behavioral-health care covered by Cenpatico. The providers excluded medical prescriptions to make a fair comparison CPSA spending, which did not include medical care for enrollees.


A third-party pharmacy benefit manager oversees prescription benefits for a group of insured people. It typically negotiates with drug companies, manages drug formularies and prior authorizations, and compiles data reports for contracted insurers like Cenpatico or large employers.

Cenpatico contracts with pharmacy benefit manager U.S. Script, which — like Cenpatico — is a subsidiary of St. Louis-based Centene Corp.

Under its contract with AHCCCS, Cenpatico’s potential profits, and losses, are limited to 4 percent of the amount AHCCCS pays the for-profit company each year, projected to be $633 million for this contract year.

U.S. Script, which Cenpatico’s parent company acquired in 2006, has no such limit to its margin.

During the first three quarters of Cenpatico’s first contract year here — the period between Oct. 1, 2015, and June 30, 2016 — Cenpatico brought in $6.3 million in profit, according to its most recent financial report.

Kohler said Cenpatico is incentivized to make sure its contract with its pharmacy benefit manager is cost-effective.

“Even if they are a sister company, spending more obviously impacts their own finances,” she said.


Burgeoning pharmacy spending is on Cenpatico’s radar. A Cenpatico PowerPoint presentation obtained by the Star shows that, between January and September of this year, its pharmacy spending exceeded its $29.4 million pharmacy budget by $22 million.

The initial budget didn’t take into account more costly drugs that may have been added to the preferred drug list due to the drug-company rebate program, said Centene spokeswoman Monica Coury, a former AHCCCS official. Coury said the rebate program fully explains the increase.

“We do not have any concerns about our pharmacy program,” she said in an email. “Obviously, ensuring access to needed medications is a critical part of helping our members manage their own health and avoid costlier settings for their care, like the emergency room.”

But some patients say they’ve encountered more problems accessing their medications under Cenpatico compared with CPSA.

For AHCCCS patients classified as having serious mental illness, Cenpatico now provides both medical and behavioral-health insurance under a new “integrated care model.”

Tucson resident Nick Mueller, 35, said the new medical coverage led to delays in getting his preventive asthma inhaler. For two months this year, Mueller had to go without the inhaler, which he’s used twice daily for almost a decade.

Mueller, who also has depression and anxiety, said he never got an explanation as to why Cenpatico wouldn’t cover the Advair inhaler, even though it was listed on their formulary.

“I went to the pharmacy one day and they said the insurance won’t fill it,” he said. When he called Cenpatico, he was told the doctor’s office hadn’t faxed a prior-authorization form, but his doctor said the forms were sent repeatedly.

The inhaler would have cost Mueller $300 for a month out-of-pocket, which he couldn’t afford. He was eventually approved to get another brand of inhaler.

“I was coughing and wheezing for over two months while I tried to figure it out,” he said.

Contact reporter Emily Bregel at

or 573-4233. On Twitter: @EmilyBregel