Things are looking up in Montana. We are very fortunate to have such supporting representatives on pharmacy issues. Please thank Senator Tester for co-sponsoring S1951 and S1954. As of Monday Sept 24, 2007, Senator Tester co-sponsored Senatot Baucus’s pharmacy legislation S1954 ”Pharmacy Access improvement Act (PhAIM) of 2007” and S1951 “The Fair Medicaid Drug Payment Act”. You may view this legislation on GrizRph.com, In The Spotlight.
In addition, please call or e-mail Congressman Rehberg, to ask him to co-sponsor HR3140 “The Saving Our Community Pharmacies Act of 2007”. This is the final remaining piece of the pharmacy legislation puzzle. We can’t quit now with so much that we’ve gained. Rehberg’s office has already heard from all the usual pharmacists and individuals concerned about pharmacy legislation and are waiting to hear from more of those pharmacists and individuals deep in the trenches.
Let Congressman Rehberg know how devastating it would be to your pharmacy to be reimbursed on average 36% below acquisition cost for the medications you have spent time and money on filling, not to mention special packaging. Then please take it one step further and explain how this will affect your patients, whom you take so well care of, by either having to reject Medicaid patients or having to close your doors due to low reimbursement. Please, it just takes a few minutes…Contact Congressman Rehberg.
Read all about HR3140 at GrizRPh.com, In the Spotlight. In addition, please thank Congressman Rehberg for all his previous support of pharmacy by co-sponsoring all the other important pharmacy legislation in the House... such as HR1474 and HR971.
These are all very crucial pieces of pharmacy legislation and we should be very thankful to have such supporting representatives. If you haven’t done so, please call or e-mail their offices to thank them at www.grizrph.com/repcontact.htm.
LIST OF CURRENT FEDERAL PHARMACY LEGISLATION
As of 9/30/07
Sincerely,
Eric Shields, Pharm D
Sunday, September 30, 2007
Thursday, August 16, 2007
Summaries for S.1951 and S.1954
Please visit In the Spotlight to read very clear and concise summaries on these two very vital bills, as well as other vital bills regarding CMS and AMP!
Special thanks to APhA, Thomas R. Clark, RPh, MHS Director of Policy & AdvocacyAmerican Society of Consultant Pharmacists, and Jim Smith, Executive Director of Montana Pharmacy Association for breaking these bills down and/or sharing them with us!
Special thanks to APhA, Thomas R. Clark, RPh, MHS Director of Policy & AdvocacyAmerican Society of Consultant Pharmacists, and Jim Smith, Executive Director of Montana Pharmacy Association for breaking these bills down and/or sharing them with us!
Sunday, August 12, 2007
Act Now..S.1954; S.1951 and H.R.1474 and H.R.1340
Finally…Hope, but a lot of work must be done before our goals of protecting pharmacy and preserving patient access to community pharmacies is accomplished.
Community pharmacies fill the void in health care by offering special services and medication packaging to further our health care system. Without our services and extra time providing theses services, many patients would be noncompliant and/or uneducated about the medication they or their loved one take; not to mention all pharmacists are the “first line against pharmaceutical and prescribing errors”. The list of services community pharmacies provide is numerous and is vital to our community, but unfortunately these services are being overlooked by our government wrapping all pharmacies into the same category with the mind set that all pharmacies, including PBM mail order pharmacies, have the same costs, services, and reimbursements. As we know this is clearly NOT TRUE!
Thanks to our very own Senator Baucus and Iowa’s Senator Grassley, they are putting their best foot forward by introducing the Pharmacy Access improvement Act (PhAIM) of 2007 (S.1954). This bill provides common sense fixes to the Medicare PartD program including 14 day electronic fund transfer for prompt reimbursement and paper claims within 30 days. Currently pharmacies are lucky to get paid by PBM’s in 30 to 60 days with the average pharmacy having to borrow $70,000 to hundreds of thousands of dollars just to make ends meet. In addition, PBM’s get paid monthly IN ADVANCE by Medicare, yet PBM’s “enjoy a considerable interest-earning float on tax-payers dollars intended to reimburse community pharmacies for serving their patients” said Roberts, RPh, of NCPA. During the year 2006, 1,152 community pharmacies were ‘shuttered or sold’ according to the NCPA-Pfizer Digest. The only thing new introduced into the pharmacy system was Medicare Part D, otherwise, community pharmacies would have continued their steady growth rate.
Similarly, H.R.1474 labeled the “Fair and Speed Treatment of Medicare Prescription Drug Claims” is making headway with a total of 190 bipartisan supporters. Please ask Congressman Rehberg to support H.R.1474 (GrizRPh News April 13th) as well as H.R.3140 (GrizRph News July 26th). Both these bills are similar to bills in the Senate, but we truly need to give every thing we’ve got to make this work since CMS has already made there statements to NOT CHANGE reimbursement which will be devastating to our pharmacies if these or similar bills do not pass. Rehberg’s staff is aware of these bills but they need to here from us…the pharmacists, technicians, and pharmacy owners in the trenches who see the devastating affects of Medicare and soon to be Medicaid on a daily basis with low and slow reimbursement. It just takes a few minutes to pick up the phone or email...yes, your opinion matters greatly!!! In numbers, we can stop these devastating affects to pharmacy!
In addition, Senator Baucus also introduced AMP fix legislation “The Fair Medicaid Drug Payment Act” (S.1951) which may save all our hides if implemented!!! Without this bill and other current pharmacy legislation, community pharmacies will be paid by Medicaid, on average, 36% below acquisition cost for medications, which will lead community pharmacies to eventually not participate by turning their backs on Medicaid patients, or close their doors. The Deficit Reduction Act of 2005 is suppose to decrease healthcare costs and national deficit not increase deficit and decrease patient healthcare, compliance, and pharmacy availability! Senator Baucus’s AMP fix focuses on a “300% reimbursement of AMP by COMMUNITY PHARMACIES on a nationwide basis and that FUL (Federal Upper Limits) do not vary monthly upon rebates, discounts or other pricing practices as well as the removal of mail order transactions from its calculations. Please support your pharmacy, and paycheck, by (1) thanking Senator Baucus for both S.1954 and S.1951. (2) Please also ask Senator Testor to Co-Sponsor S.1954 and other Senate pharmacy bills and (3) Please ask Congessman Rehberg to Co-Sponsor H.R.1474 (GrizRPh News April 13th) and H.R.3140 (GrizRPhNews July 26th). Please do your part and phone or email…we can protect pharmacy by standing up and shouting in one voice OR sit back and watch the devastating affects take place! Your choice will matter!!! Thank you for supporting Community Pharmacies as well as ALL PHARMACIES nationwide by writing to your Representatives! Please visit http://www.rxmt.org/ for a concise summary of these bills!
Thank you,
Eric Shields, PharmD
GrizRPh.com
Community pharmacies fill the void in health care by offering special services and medication packaging to further our health care system. Without our services and extra time providing theses services, many patients would be noncompliant and/or uneducated about the medication they or their loved one take; not to mention all pharmacists are the “first line against pharmaceutical and prescribing errors”. The list of services community pharmacies provide is numerous and is vital to our community, but unfortunately these services are being overlooked by our government wrapping all pharmacies into the same category with the mind set that all pharmacies, including PBM mail order pharmacies, have the same costs, services, and reimbursements. As we know this is clearly NOT TRUE!
Thanks to our very own Senator Baucus and Iowa’s Senator Grassley, they are putting their best foot forward by introducing the Pharmacy Access improvement Act (PhAIM) of 2007 (S.1954). This bill provides common sense fixes to the Medicare PartD program including 14 day electronic fund transfer for prompt reimbursement and paper claims within 30 days. Currently pharmacies are lucky to get paid by PBM’s in 30 to 60 days with the average pharmacy having to borrow $70,000 to hundreds of thousands of dollars just to make ends meet. In addition, PBM’s get paid monthly IN ADVANCE by Medicare, yet PBM’s “enjoy a considerable interest-earning float on tax-payers dollars intended to reimburse community pharmacies for serving their patients” said Roberts, RPh, of NCPA. During the year 2006, 1,152 community pharmacies were ‘shuttered or sold’ according to the NCPA-Pfizer Digest. The only thing new introduced into the pharmacy system was Medicare Part D, otherwise, community pharmacies would have continued their steady growth rate.
Similarly, H.R.1474 labeled the “Fair and Speed Treatment of Medicare Prescription Drug Claims” is making headway with a total of 190 bipartisan supporters. Please ask Congressman Rehberg to support H.R.1474 (GrizRPh News April 13th) as well as H.R.3140 (GrizRph News July 26th). Both these bills are similar to bills in the Senate, but we truly need to give every thing we’ve got to make this work since CMS has already made there statements to NOT CHANGE reimbursement which will be devastating to our pharmacies if these or similar bills do not pass. Rehberg’s staff is aware of these bills but they need to here from us…the pharmacists, technicians, and pharmacy owners in the trenches who see the devastating affects of Medicare and soon to be Medicaid on a daily basis with low and slow reimbursement. It just takes a few minutes to pick up the phone or email...yes, your opinion matters greatly!!! In numbers, we can stop these devastating affects to pharmacy!
In addition, Senator Baucus also introduced AMP fix legislation “The Fair Medicaid Drug Payment Act” (S.1951) which may save all our hides if implemented!!! Without this bill and other current pharmacy legislation, community pharmacies will be paid by Medicaid, on average, 36% below acquisition cost for medications, which will lead community pharmacies to eventually not participate by turning their backs on Medicaid patients, or close their doors. The Deficit Reduction Act of 2005 is suppose to decrease healthcare costs and national deficit not increase deficit and decrease patient healthcare, compliance, and pharmacy availability! Senator Baucus’s AMP fix focuses on a “300% reimbursement of AMP by COMMUNITY PHARMACIES on a nationwide basis and that FUL (Federal Upper Limits) do not vary monthly upon rebates, discounts or other pricing practices as well as the removal of mail order transactions from its calculations. Please support your pharmacy, and paycheck, by (1) thanking Senator Baucus for both S.1954 and S.1951. (2) Please also ask Senator Testor to Co-Sponsor S.1954 and other Senate pharmacy bills and (3) Please ask Congessman Rehberg to Co-Sponsor H.R.1474 (GrizRPh News April 13th) and H.R.3140 (GrizRPhNews July 26th). Please do your part and phone or email…we can protect pharmacy by standing up and shouting in one voice OR sit back and watch the devastating affects take place! Your choice will matter!!! Thank you for supporting Community Pharmacies as well as ALL PHARMACIES nationwide by writing to your Representatives! Please visit http://www.rxmt.org/ for a concise summary of these bills!
Thank you,
Eric Shields, PharmD
GrizRPh.com
Thursday, July 26, 2007
"A New Hope"
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
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
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:
.
.
.
.
.
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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