Pharmacies Push for Planned Medicaid Rule Changes
The National Community Pharmacists Association and other community pharmacy groups have lobbied Congress to revise provisions of a rule proposed by CMS that the group maintains would prompt pharmacies to end participation in Medicaid, CongressDaily reports (Edney, CongressDaily, 6/15).
The rule, proposed in December 2006 to implement provisions of the Deficit Reduction Act signed by President Bush in February 2006, would reduce reimbursements for prescription drugs for Medicaid beneficiaries.
The rule 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.
Under the rule, the federal government would 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 (California Healthline, 12/18/06). CMS must finalize the rule by July 1.
Community pharmacy groups have worked with lawmakers to draft legislation to revise the rule that would use the retail acquisition cost, rather than average manufacturer price, to determine Medicaid reimbursements for generic prescription drugs, according to Charles Sewell, senior vice president of government affairs for NCPA.
Meanwhile, a report released on Wednesday by the HHS Office of Inspector General indicated that the rule would result in large underpayment of pharmacies.
Under the rule, CMS would reimburse pharmacies at rates higher than their acquisition costs for only six of the 25 generic prescription drugs with the highest Medicaid expenditures, the report found.
Paul Kelly, vice president of federal government affairs for the National Association of Chain Drug Stores, said, "On the strength of this (inspector general) report we're launching grassroots." Kelly said that more than 100 House members and almost half of senators have written CMS to express concerns about the rule.
However, acting CMS Administrator Leslie Norwalk said that any "assessment before it's final is premature," adding, "It is important to take a deep breath and figure out what comes in in September and figure out what the issues are" (CongressDaily, 6/15).