Medicaid Cuts Are Final and Devastating
The Centers for Medicare & Medicaid Services (CMS) have set their rules on July 6th 2007 and made them public on July 9th 2007 for viewing. Unfortunately, this rule still doesn’t provide a clear definition of Average Manufacturers Price (AMP), which is used in Medicaid’s reimbursement to pharmacies. Despite numerous attempts from pharmacists, and pharmacy organizations, Medicaid must use the new Federal Upper Limit (FUL), the maximum amount states can pay pharmacies for generic Medicaid drugs, that will be based on 250% of the lowest generic medications AMP.
This rule is part of the Deficit Reduction Act of 2005, mandating CMS to reduce Federal and State Medicaid costs by 8.4 billion dollars over the next 5 years. “More than 90% of the cuts will be borne on the backs of community pharmacy as a result of the new AMP that cuts Medicaid reimbursement to pharmacies for generic drugs” as stated in an ACP*CN Media broadcast. In addition, this total does not include loss of bonuses and wages to hard working pharmacists and staff even though prescription numbers and total gross sales increase due to such a great loss in total profit.
Studies have shown that the current AMP model is devastating to pharmacies. The Government Accountability Office (GAO) identified the reimbursement on average is 36% less than the acquisition costs for generic medications. In congruence, the Department of Health and Human Services Office of Inspector General (OIG) stated that the average pharmacy acquisition cost for 19 of 25 high-expenditure generics are higher than what Medicaid would have reimbursed the pharmacy posing a huge loss to the pharmacy.
NCPA President John Tilley, RPh stated that “the new Medicaid AMP formula tells community pharmacies that fair and accurate reimbursement for helping economically disadvantaged patients is not a priority for the federal government.” Similarly, NCPA executive vice president and CEO Bruce Roberts, RPh stated “If the current policy is fully implemented, community pharmacies will be forced to make the impossible choice of turning their backs on vulnerable patients by dropping out of the Medicaid program or continuing in a program that threatens to bankrupt their businesses.”
Other organizations such as ACP*CN are also concerned about the new ruling stating that “this ill-conceived rule issued by CMS leaves pharmacies in the dark about how under-reimbursed they will be for generic Medicaid Drugs” and that “patient access to their neighborhood pharmacist is under assault, as the country’s healthcare delivery system teeters on the edge of destruction.” In addition, APhA has addressed the same issues regarding CMS’s ruling on AMP stating that “Pharmacists across the country may be penalized for serving Medicaid patients by the Centers for Medicare and Medicaid Services’ (CMS) new regulation for pharmacy reimbursement in the Medicaid program.”
You may view the 600 page pdf CMS ruling complete with comments from individuals and organizations and responses from CMS on GrizRPh News…they’re quite interesting. In addition please visit the following websites for additional information and full articles from: ACP*CN (http://www.acpcn.org/); NCPA (www.ncpanet.org/); and APhA (www.aphanet.org/). Please View this and more at GrizRPH.com (www.grizrph.com/).
The Centers for Medicare & Medicaid Services (CMS) have set their rules on July 6th 2007 and made them public on July 9th 2007 for viewing. Unfortunately, this rule still doesn’t provide a clear definition of Average Manufacturers Price (AMP), which is used in Medicaid’s reimbursement to pharmacies. Despite numerous attempts from pharmacists, and pharmacy organizations, Medicaid must use the new Federal Upper Limit (FUL), the maximum amount states can pay pharmacies for generic Medicaid drugs, that will be based on 250% of the lowest generic medications AMP.
This rule is part of the Deficit Reduction Act of 2005, mandating CMS to reduce Federal and State Medicaid costs by 8.4 billion dollars over the next 5 years. “More than 90% of the cuts will be borne on the backs of community pharmacy as a result of the new AMP that cuts Medicaid reimbursement to pharmacies for generic drugs” as stated in an ACP*CN Media broadcast. In addition, this total does not include loss of bonuses and wages to hard working pharmacists and staff even though prescription numbers and total gross sales increase due to such a great loss in total profit.
Studies have shown that the current AMP model is devastating to pharmacies. The Government Accountability Office (GAO) identified the reimbursement on average is 36% less than the acquisition costs for generic medications. In congruence, the Department of Health and Human Services Office of Inspector General (OIG) stated that the average pharmacy acquisition cost for 19 of 25 high-expenditure generics are higher than what Medicaid would have reimbursed the pharmacy posing a huge loss to the pharmacy.
NCPA President John Tilley, RPh stated that “the new Medicaid AMP formula tells community pharmacies that fair and accurate reimbursement for helping economically disadvantaged patients is not a priority for the federal government.” Similarly, NCPA executive vice president and CEO Bruce Roberts, RPh stated “If the current policy is fully implemented, community pharmacies will be forced to make the impossible choice of turning their backs on vulnerable patients by dropping out of the Medicaid program or continuing in a program that threatens to bankrupt their businesses.”
Other organizations such as ACP*CN are also concerned about the new ruling stating that “this ill-conceived rule issued by CMS leaves pharmacies in the dark about how under-reimbursed they will be for generic Medicaid Drugs” and that “patient access to their neighborhood pharmacist is under assault, as the country’s healthcare delivery system teeters on the edge of destruction.” In addition, APhA has addressed the same issues regarding CMS’s ruling on AMP stating that “Pharmacists across the country may be penalized for serving Medicaid patients by the Centers for Medicare and Medicaid Services’ (CMS) new regulation for pharmacy reimbursement in the Medicaid program.”
You may view the 600 page pdf CMS ruling complete with comments from individuals and organizations and responses from CMS on GrizRPh News…they’re quite interesting. In addition please visit the following websites for additional information and full articles from: ACP*CN (http://www.acpcn.org/); NCPA (www.ncpanet.org/); and APhA (www.aphanet.org/). Please View this and more at GrizRPH.com (www.grizrph.com/).
In addition, Please read the following full paged articles pertaining to CMS's AMP rulings:
.
.
.
.
.
Please feel free to share or comment on any part of CMS's AMP or any part of GrizRph.com... by using the Contact Link. Thank you.
.
Please use RPh Messenger to receive emails on updates FREE!
. Sincerely,
.
Eric Shields, PharmD
GrizRPh.com
No comments:
Post a Comment