New laws in two states and a decision to reverse Medicaid reimbursement rate cuts in a third state are being hailed by community pharmacy advocates as victories for the industry.


Medicaid, reimbursement, pharmacy, community pharmacy, National Association of Chain Drug Stores, NACDS, South Carolina, prescriptions, wholesale acquisition cost, Centers for Medicare and Medicaid Services, CMS, average wholesale price, First DataBank, Medi-Span, average manufacturer’s price, AMP, Medicaid dispensing fee, Richard Monks, Steve Anderson, drug therapy management, Ed Rendell, Mississippi Division of Medicaid, Mississippi Independent Pharmacies Association, National Community Pharmacists Association
































































































































































































































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Pharmacy earns key victories in Medicaid

June 28th, 2010

ALEXANDRIA, Va. – New laws in two states and a decision to reverse Medicaid reimbursement rate cuts in a third state are being hailed by community pharmacy advocates as victories for the industry.

Perhaps the biggest of these victories, National Association of Chain Drug Stores executives say, is a provision in the South Carolina budget bill passed June 10 that sets the reimbursement rate for drug prescriptions filled under the state’s Medicaid program at the wholesale acquisition cost plus 12.5%.

The rate, which still has to be approved by the Centers for Medicare and Medicaid Services (CMS), raises the amount pharmacies will be paid by about 4% from the rate of the average wholesale price minus 10% that went into effect last fall as a result of the First DataBank/Medi-Span settlements.

The law also calls for an adjustment to the Medicaid dispensing fee should the federal average manufacturer’s price (AMP) provision become problematic for pharmacies in South Carolina, according to NACDS.

“This truly is a monumental achievement for pharmacy and patients in South Carolina,” NACDS president and chief executive officer Steve Anderson says. “The pharmacy provisions in the law put patients first by preserving their access to pharmacy care.

“The excessive rate cuts originally imposed [under the First DataBank/Medi-Span settlements] placed a significant burden on pharmacies,” he notes. “The increased reimbursement rate will help preserve access to community pharmacies and maintain the vital pharmacist-patient relationship.”

Meanwhile, Pennsylvania Gov. Ed Rendell has signed into law a bill that NACDS says will allow more patients to benefit from the pharmacist’s knowledge of medications by making it easier for pharmacists and other health care providers to collaborate on drug therapy management programs.

Previously, Pennsylvania only allowed institutions such as hospitals and nursing homes to offer collaborative drug therapy management programs.

“With the enactment of this legislation, Pennsylvania has said yes to improving the health and lives of patients and to reducing overall health care costs,” Anderson says. “This new law recognizes the expertise of pharmacists, the accessibility of community pharmacy and the ability of pharmacists to help patients properly manage their health conditions for the well-being of patients and for the good of society.”

Helping patients to properly take the correct medications — commonly referred to as “medication adherence” — is vital for health and cost-effectiveness, NACDS says, citing a July 2009 report by the New England Health Institute estimating that poor medication adherence accounts for as much as $290 billion per year — or 13% of the nation’s total health care expenditures — in unnecessary medical costs.

Pennsylvania is the 33rd state to allow collaborative drug therapy management in a community setting. Nine states allow it in institutional settings only, and eight ban the practice.

The third victory for pharmacy came early in the month when the Mississippi Division of Medicaid announced that it was reversing proposed cuts in Medicaid reimbursements for health care providers.

NACDS says pharmacies would have been especially hard hit under the plan, as their reimbursements would have been cut by 15%.

The association, which joined with the Mississippi Independent Pharmacies Association and the National Community Pharmacists Association to file a lawsuit to block the cuts, says the lower rates would have forced many community pharmacies to limit their participation in Medicaid or drop out of the program.

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