The National Association of Chain Drug Stores has told federal regulators that it feels proposed changes to Medicaid reimbursement rates will adversely affect patients.


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NACDS: Proposed Medicaid FULs would hurt patients

November 7th, 2011

ALEXANDRIA, Va. – The National Association of Chain Drug Stores has told federal regulators that it feels proposed changes to Medicaid reimbursement rates will adversely affect patients.

In comments submitted to the Centers for Medicare and Medicaid Services (CMS) late last month the association expressed concern that the agency’s draft Federal Upper Limit (FUL) provisions are inadequate and would deny many Medicaid patients access to prescription medications and related pharmacy services.

“We offer these comments in the spirit of implementing a Medicaid pharmacy reimbursement policy that maintains the strong link between chain pharmacies and Medicaid patients,” NACDS senior vice president of government affairs and public policy Carol Kelly wrote in a six-page letter to CMS deputy administrator and director Cindy Mann.

Kelly cited several issues of the draft FULs that concern NACDS.

Relying on average manufacturer price (AMP), she said, is an inaccurate benchmark for pharmacy reimbursement. “AMP is not a price paid in the marketplace,” Kelly said. “Instead, it is a benchmark to determine manufacturer rebates in the Medicaid program.”

In addition, Kelly said NACDS saw a lack of consistent AMP reporting by manufacturers and was concerned about there not being a regulatory process to govern calculation of FULs.

She said the association also had problems with the amount of FULs and stressed the need for the government to provide accurate dispensing fees.

“NACDS believes that the draft FULs, calculated without regulatory guidance and seemingly inaccurate, should neither be made available for nor used as a basis for pharmacy reimbursement,” she said in her letter. “No further draft FUL lists should be published before a final AMP rule is effective.”

NACDS’ battle with CMS over FULs and federal reimbursement rates goes back several years. In 2007 NACDS and the National Community Pharmacists Association won a preliminary injunction in federal court, blocking CMS’ approach to pharmacy reimbursement based on AMP. As a result, CMS eventually withdrew all of its contested rules.

The agency’s AMP-based reimbursement model — created by the 2005 Deficit Reduction Act — was modified by provisions in last year’s Patient Protection and Affordable Care Act and other legislation.

In addition to the FUL list, CMS is expected to issue a proposed rule to implement pharmacy Medicaid reimbursement according to AMP.

Kelly’s letter said that many pharmacies have concluded that the current proposal would make it economically unfeasible to fill Medicaid prescriptions.

“After a comprehensive analysis, one NACDS member company found that more than half of the draft Federal Upper Limits were below the pharmacy’s cost to acquire these products from a wholesaler,” she wrote.

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