Please contact Congressman Rehberg and urge him to co-sponsor H.R. 3140.
In response to the Centers for Medicaid and Medicare Services (CMS) final ruling on Average Manufacturer Price (AMP), REPS. BOYDA, EMERSON AND 30 HOUSE MEMBERS INTRODUCE COMMON-SENSE FIXES TO MEDICAID PHARMACY REIMBURSEMENT RULE FOR GENERIC PRESCRIPTION DRUGS. See CMS final ruling posted on GrizRPh on July 11th, 2007.
H.R. 3140 “The Saving Our Community Pharmacies Act of 2007” rectifies the current pricing discrepancies and maintains patient- pharmacist relationship by:
• Redefining the pharmacy reimbursement benchmark to accurately reflect pharmacy acquisition costs. Retail Acquisition Cost (RAC) is the median price for each drug based on a quarterly survey of actual invoices subject to audit from a 5% representative sample of pharmacies nationwide. A FUL based on RAC will allow states to pay pharmacies accurately and preserve patient access.
• Excluding all sales to mail order facilities, as well as any pharmacy benefit manager (PBM) rebates and price concessions that are not available to retail pharmacies.
• Properly defining the retail class of trade to only include retail community pharmacies.
• Including provisions to drive generic utilization which would increase taxpayer and government savings.
Read the H.R. 3140 Fact Sheet provided by NCPA.
“The situation is serious, extremely serious,” said Bruce Roberts, RPh, NCPA executive vice president and CEO. “But it is not hopeless. It is not hopeless if we all take action in a well-planned, sustained effort. We’ve got about six months before the pain begins. Let’s use every day.”
Please visit the NCPA Website for more information on H.R. 3140.
Please contact Congressman Rehberg and urge him to co-sponsor H.R. 3140 through the GrizRPh.com Representative Contacts page. If we act now we may be able to prevent the Medicaid AMP Tragedy and save jobs and independent stores nationwide. Please do your part…this may be our last chance!
Thanks to NCPA and MPA for awareness on this issue!
Eric Shields, Pharm.D.
GrizRPh.com
Thursday, July 26, 2007
Wednesday, July 11, 2007
AMP Final Ruling Disasterous for Community Pharmacies
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:
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.
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.
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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
Monday, July 2, 2007
Monthly Newsletter
HR1474, the “Prompt Payment Legislation”, has just recently been co-signed by Congressman Rehberg. This issue was previously mentioned on April 13, 2007 that you can find at GrizRPh News in the GrizRPh Archive . Thanks to all those that phoned and/or emailed Congressman Rehberg…Strong Work!!!! HR1474 was introduced to the House by Congressman Berry (AR), Jones (NC), Herseth (SD), and Wicker (SD), which is the Fair and Speedy Treatment (FAST) of Medicare Prescription Drug Claims Act of 2007. The plan calls for a 14 day turn around interval for payment (much like Medicaid) and would be very beneficial to ALL pharmacies!!!!! We need to thank Congressman Rehberg for showing his interest in continually helping pharmacists and pharmacies statewide. You can do so by visiting his email page or picking up the phone to say: “thank you for co-sponsoring HR1474 (the “Prompt Payment Legislation) and preserving the future of Montana Pharmacists”. All representative contact information can be easily accessible at www.grizrph.com/repcontact.htm .
In other news…the Montana Pharmacy Association has been working very hard to bring us all up to speed on a variety of topics including: a letter to Senator Baucus to introduce a bill to the Senate on prompt legislation such as HR1474. In addition, it would be very helpful to also include topics such as the “Community Pharmacy Fairness Act” (HR 971 as previously discussed on GrizRPh.com on April 5, 2007), which you can view at http://grizrph.blogspot.com/ … and click on April in GrizRPh Archive.
Please visit the Montana Pharmacy Association Homepage (http://www.rxmt.org/ ) to view this letter as well as: good rates on liability insurance for any individual pharmacist needing it…especially for the Montana PharmAssist program, and good news on Medicaid AMP…6 month extension at GrizRPh News or rxmt.org, and Tamper-Resistant Prescriptions to be Required for Medicaid Reimbursement as of October 1, 2007. The emergency supplemental appropriations bill (Public Law No: 110-28) that was recently passed includes a provision that effective October 1, 2007 Medicaid outpatient drugs will be reimbursable only if non-electronic written prescriptions are executed on a tamper-resistant pad. Please read more at http://www.rxmt.org/ for complete information.
Please Contact GrizRph.com for any concerns, or issues that you would like to share. GrizRPh.com is designed to be an interactive network where pharmacists and others may share information in which to speak in one voice. Please share your thoughts, ideas and concerns on how to better your network to achieve these goals. Thank you.
Sincerely,
Eric Shields, Pharm.D.
GrizRPh.com
In other news…the Montana Pharmacy Association has been working very hard to bring us all up to speed on a variety of topics including: a letter to Senator Baucus to introduce a bill to the Senate on prompt legislation such as HR1474. In addition, it would be very helpful to also include topics such as the “Community Pharmacy Fairness Act” (HR 971 as previously discussed on GrizRPh.com on April 5, 2007), which you can view at http://grizrph.blogspot.com/ … and click on April in GrizRPh Archive.
Please visit the Montana Pharmacy Association Homepage (http://www.rxmt.org/ ) to view this letter as well as: good rates on liability insurance for any individual pharmacist needing it…especially for the Montana PharmAssist program, and good news on Medicaid AMP…6 month extension at GrizRPh News or rxmt.org, and Tamper-Resistant Prescriptions to be Required for Medicaid Reimbursement as of October 1, 2007. The emergency supplemental appropriations bill (Public Law No: 110-28) that was recently passed includes a provision that effective October 1, 2007 Medicaid outpatient drugs will be reimbursable only if non-electronic written prescriptions are executed on a tamper-resistant pad. Please read more at http://www.rxmt.org/ for complete information.
Please Contact GrizRph.com for any concerns, or issues that you would like to share. GrizRPh.com is designed to be an interactive network where pharmacists and others may share information in which to speak in one voice. Please share your thoughts, ideas and concerns on how to better your network to achieve these goals. Thank you.
Sincerely,
Eric Shields, Pharm.D.
GrizRPh.com
Sunday, July 1, 2007
CMS and Medicaid AMP...6 month extension!!!
CMS Delays Implementation of Medicaid Pharmacy Rule for Six Months
[Jun 20, 2007]
CMS on Monday delayed for six months implementation of a proposed rule that would reduce Medicaid reimbursements to pharmacies for generic prescription drugs, Dow Jones reports (Wisenberg Brin, Dow Jones, 6/19). The rule, mandated by the Deficit Reduction Act of 2005, seeks to ensure that Medicaid can obtain prescription drug discounts similar to those obtained by private entities, such as pharmacy benefit managers.
Under the rule, pharmaceutical companies would have to offer Medicaid the lowest price offered to any purchaser -- which includes any "rebates, discounts or other price concessions" offered to PBMs or mail-order pharmacies. The rule also would redefine "average manufacturer price" for brand-name and generic prescription drugs. States use average manufacturer prices to calculate Medicaid reimbursement rates for prescription drugs. Rule would require the federal government to post average manufacturer prices on a Web site that consumers could access.
In addition, the rule would limit the federal share of the cost of prescription drugs when at least three generic alternatives are available. States would retain their current authority to determine Medicaid reimbursement rates to pharmacies. HHS said that the rule could reduce revenue for small pharmacies "in low-income areas where there are high concentrations of Medicaid beneficiaries." Small pharmacies could "mitigate the effects" of the rule through the purchase of lower-cost prescription drugs, HHS said. The National Community Pharmacists Association and other community pharmacy groups have argued that the rule would prompt pharmacies to end participation in Medicaid (Kaiser Daily Health Policy Report, 6/15).
CMS is scheduled to publish the final rule on July 2. Drug makers in late October are to report their September AMPs, and the adjusted Medicaid reimbursement rates for generic drugs are expected to take effect Dec. 30, according to CMS (Dow Jones, 6/19).
Potential for State Reforms
Because the rule will reduce Medicaid reimbursements to pharmacies for ingredient costs, pharmacies are hoping that states will make up the shortfall by increasing dispensing fees, the Pittsburgh Post-Gazette reports. So far, Iowa and Kansas have agreed to transfer any savings resulting from the new rule to pharmacy dispensing fees. In addition, Texas plans to increase its dispensing fee to at least $7.50, with triggers that could increase the fees to $12.50. The average dispensing fee nationwide is about $4.50.
Pat Epple of the Pennsylvania Pharmacists Association said that the $4 dispensing fee in Pennsylvania is not enough to cover the cost of doing business (Toland, Pittsburgh Post-Gazette, 6/19). Morgan Stanley analyst David Veal in a note to investors said that CMS' six-month delay will move implementation of the rule much closer to the time that many state legislatures reconvene. As a result, the delay "potentially allow[s] lawmakers to boost dispensing fees more immediately to offset the potential reimbursement cuts," Veal said (Dow Jones, 6/19).
*this excerpt was taken from the KaiserNetwork.org on 7/1/07
[Jun 20, 2007]
CMS on Monday delayed for six months implementation of a proposed rule that would reduce Medicaid reimbursements to pharmacies for generic prescription drugs, Dow Jones reports (Wisenberg Brin, Dow Jones, 6/19). The rule, mandated by the Deficit Reduction Act of 2005, seeks to ensure that Medicaid can obtain prescription drug discounts similar to those obtained by private entities, such as pharmacy benefit managers.
Under the rule, pharmaceutical companies would have to offer Medicaid the lowest price offered to any purchaser -- which includes any "rebates, discounts or other price concessions" offered to PBMs or mail-order pharmacies. The rule also would redefine "average manufacturer price" for brand-name and generic prescription drugs. States use average manufacturer prices to calculate Medicaid reimbursement rates for prescription drugs. Rule would require the federal government to post average manufacturer prices on a Web site that consumers could access.
In addition, the rule would limit the federal share of the cost of prescription drugs when at least three generic alternatives are available. States would retain their current authority to determine Medicaid reimbursement rates to pharmacies. HHS said that the rule could reduce revenue for small pharmacies "in low-income areas where there are high concentrations of Medicaid beneficiaries." Small pharmacies could "mitigate the effects" of the rule through the purchase of lower-cost prescription drugs, HHS said. The National Community Pharmacists Association and other community pharmacy groups have argued that the rule would prompt pharmacies to end participation in Medicaid (Kaiser Daily Health Policy Report, 6/15).
CMS is scheduled to publish the final rule on July 2. Drug makers in late October are to report their September AMPs, and the adjusted Medicaid reimbursement rates for generic drugs are expected to take effect Dec. 30, according to CMS (Dow Jones, 6/19).
Potential for State Reforms
Because the rule will reduce Medicaid reimbursements to pharmacies for ingredient costs, pharmacies are hoping that states will make up the shortfall by increasing dispensing fees, the Pittsburgh Post-Gazette reports. So far, Iowa and Kansas have agreed to transfer any savings resulting from the new rule to pharmacy dispensing fees. In addition, Texas plans to increase its dispensing fee to at least $7.50, with triggers that could increase the fees to $12.50. The average dispensing fee nationwide is about $4.50.
Pat Epple of the Pennsylvania Pharmacists Association said that the $4 dispensing fee in Pennsylvania is not enough to cover the cost of doing business (Toland, Pittsburgh Post-Gazette, 6/19). Morgan Stanley analyst David Veal in a note to investors said that CMS' six-month delay will move implementation of the rule much closer to the time that many state legislatures reconvene. As a result, the delay "potentially allow[s] lawmakers to boost dispensing fees more immediately to offset the potential reimbursement cuts," Veal said (Dow Jones, 6/19).
*this excerpt was taken from the KaiserNetwork.org on 7/1/07
The 6 month extention was due mainly to ACP*CN as well as other organizations concerned about the complexity of the rule being put into effect when legislation is not in session and its devasting effect on retail pharmacies. You can view ACP*CN's letter to Leslie Norwalk written on May 18th, 2007.
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