Express Scripts last week reached a $9.3 million settlement with 29 states resolving claims that it engaged in deceptive business practices by encouraging doctors to switch patients to different brand name drugs that would produce higher rebates for the giant PBM and were more expensive to plans and patients. As part of the settlement, the company is required to "significantly" change its business practices.The settlement is the third entered into in recent years by various groups of states and the country's largest PBMs aimed at cleaning up the industry. In February, Caremark agreed to pay $38.5 million and reform its business practices. In April 2004, Medco agreed to pay $29.3 million and end its malpractices.These settlements are not related to cases that certain PBMs have settled with the Department of Justice. In October 2006, Medco paid $155 million to settle civil fraud and kickback claims. In September 2005, AdvancePCS, now a Caremark subsidiary, resolved similar allegations with a $137.5 million payment. Both PBMs also were required to enter into extensive corporate compliance agreements with the government.
by the National Community Pharmacists Association
Friday, June 6, 2008
Thursday, June 5, 2008
Impact of AMP on states: report by Price Waterhouse Coopers
PriceWaterhouseCoopers claims that 11,105 pharmacies will close due to the Average Manufacturer Price (AMP) provisions in the Deficit Reduction Act of 2005 (DRA).
The Medicaid program pays retail pharmacies a dispensing fee plus a reimbursement rate meant to cover the cost of acquiring the drug from the manufacturer for Medicaid prescriptions. The federal government imposes a federal upper limit ("FUL") on reimbursement rates for certain generic drugs that states generally adopt under their Medicaid programs. The Deficit Reduction Act of 2005 ("DRA") generally decreased FULs by changing their calculation method, but litigation has prevented the new reimbursement levels from being implemented. The changes in the Medicaid reimbursement rates under the DRA would dramatically lower pharmacy reimbursement rates. The decline in the profitability of pharmacies participating in Medicaid could result in thousands of pharmacies closing, making pharmacies less accessible to Medicaid participants. If reduced accessibility of pharmacies made beneficiaries less likely to utilize prescription drugs, their health could be adversely affected.
The National Association of Chain Drug Stores and the Food Marketing Institute engaged PricewaterhouseCoopers to analyze the potential impact of the DRA on pharmacies by state.
Montana: DRA cuts could cause 51 pharmacies to close (24.6% of our rural pharmacies), affecting 324 direct jobs and 688 jobs across the entire state economy.
Please read the Full Report
The Medicaid program pays retail pharmacies a dispensing fee plus a reimbursement rate meant to cover the cost of acquiring the drug from the manufacturer for Medicaid prescriptions. The federal government imposes a federal upper limit ("FUL") on reimbursement rates for certain generic drugs that states generally adopt under their Medicaid programs. The Deficit Reduction Act of 2005 ("DRA") generally decreased FULs by changing their calculation method, but litigation has prevented the new reimbursement levels from being implemented. The changes in the Medicaid reimbursement rates under the DRA would dramatically lower pharmacy reimbursement rates. The decline in the profitability of pharmacies participating in Medicaid could result in thousands of pharmacies closing, making pharmacies less accessible to Medicaid participants. If reduced accessibility of pharmacies made beneficiaries less likely to utilize prescription drugs, their health could be adversely affected.
The National Association of Chain Drug Stores and the Food Marketing Institute engaged PricewaterhouseCoopers to analyze the potential impact of the DRA on pharmacies by state.
Montana: DRA cuts could cause 51 pharmacies to close (24.6% of our rural pharmacies), affecting 324 direct jobs and 688 jobs across the entire state economy.
Please read the Full Report
Sunday, June 1, 2008
Democrats to write their own bill for Medicare/ Medicaid Fix
05/21/2008
Baucus: No Bipartisan Deal For Medicare Payment Fix
by Anna Edney
Senate Finance Chairman Max Baucus has ruled out the possibility of reaching a bipartisan compromise on legislation to prevent Medicare physicians from taking a pay cut, saying today Democrats would move forward with their bill that will include offsets staunchly opposed by the White House. "It seems clear to me that we're not going to get agreement in time to meet the deadline," Baucus said after a meeting with Finance Committee members. The pay cut is set to take effect July 1. Republicans offered Democrats a counterproposal, but Democrats appear to have walked away from the table without giving the GOP an answer, a Republican aide said. The Republican offer included $10 billion in private Medicare Advantage cuts as well as marketing restrictions for the private plans and beneficiary improvements totaling $3 billion, a GOP aide said. Baucus was unsure how much his bill might cost, but previously estimated between $15 billion and $18 billion.Baucus said that the bill, which he will work on over Memorial Day recess, will prevent the 10 percent physician pay cut for 18 months and include an increase. Baucus was not sure what the pay increase would be but characterized it as "a little bump." The bill will be paid for through cuts in Medicare Advantage private fee-for-service and indirect medical education, offsets that are likely to draw a veto. The private fee-for-service plans are paid more than traditional Medicare plans to provide extra benefits, while indirect medical education payments are made to teaching hospitals but considered duplicative. The administration refuses to greenlight cuts to any private plans. "They're afraid of the White House," Senate Finance Health Subcommittee Chairman John (Jay) Rockefeller, D-W.Va., said of Republicans. "All they think about is will this get vetoed or not. They never think about will this help patients [and] beneficiaries."Baucus said the Democrats' bill will include electronic prescribing requirements and changes to an asset test for low-income beneficiaries to qualify for prescription assistance. The bill also will have a provision that pharmacy groups pushed for to require pharmacy benefit managers to reimburse pharmacies for Medicare prescriptions more quickly than the current payment period of 30 days or sometimes longer. Baucus expects the Democrats' bill to bypass the committee and go straight to the floor. Finance ranking member Charles Grassley said today he still will attempt to reach a compromise. If that does not happen, Grassley said, Republicans will offer their own proposal.
Baucus: No Bipartisan Deal For Medicare Payment Fix
by Anna Edney
Senate Finance Chairman Max Baucus has ruled out the possibility of reaching a bipartisan compromise on legislation to prevent Medicare physicians from taking a pay cut, saying today Democrats would move forward with their bill that will include offsets staunchly opposed by the White House. "It seems clear to me that we're not going to get agreement in time to meet the deadline," Baucus said after a meeting with Finance Committee members. The pay cut is set to take effect July 1. Republicans offered Democrats a counterproposal, but Democrats appear to have walked away from the table without giving the GOP an answer, a Republican aide said. The Republican offer included $10 billion in private Medicare Advantage cuts as well as marketing restrictions for the private plans and beneficiary improvements totaling $3 billion, a GOP aide said. Baucus was unsure how much his bill might cost, but previously estimated between $15 billion and $18 billion.Baucus said that the bill, which he will work on over Memorial Day recess, will prevent the 10 percent physician pay cut for 18 months and include an increase. Baucus was not sure what the pay increase would be but characterized it as "a little bump." The bill will be paid for through cuts in Medicare Advantage private fee-for-service and indirect medical education, offsets that are likely to draw a veto. The private fee-for-service plans are paid more than traditional Medicare plans to provide extra benefits, while indirect medical education payments are made to teaching hospitals but considered duplicative. The administration refuses to greenlight cuts to any private plans. "They're afraid of the White House," Senate Finance Health Subcommittee Chairman John (Jay) Rockefeller, D-W.Va., said of Republicans. "All they think about is will this get vetoed or not. They never think about will this help patients [and] beneficiaries."Baucus said the Democrats' bill will include electronic prescribing requirements and changes to an asset test for low-income beneficiaries to qualify for prescription assistance. The bill also will have a provision that pharmacy groups pushed for to require pharmacy benefit managers to reimburse pharmacies for Medicare prescriptions more quickly than the current payment period of 30 days or sometimes longer. Baucus expects the Democrats' bill to bypass the committee and go straight to the floor. Finance ranking member Charles Grassley said today he still will attempt to reach a compromise. If that does not happen, Grassley said, Republicans will offer their own proposal.
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