The National Community Pharmacists Association has expressed concern over an Oregon state plan amendment that would renege on a pact the state previously reached with the Centers for Medicare & Medicaid Services (CMS) and cut Medicaid pharmacy reimbursement for the second time this year.


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NCPA to CMS: Nix Oregon proposal to cut Rx reimbursement

July 25th, 2011

ALEXANDRIA, Va. – The National Community Pharmacists Association has expressed concern over an Oregon state plan amendment that would renege on a pact the state previously reached with the Centers for Medicare & Medicaid Services (CMS) and cut Medicaid pharmacy reimbursement for the second time this year.

NCPA explained that earlier this year CMS approved an Oregan state plan amendment (SPA) proposal that lowered pharmacy reimbursement by basing it on the pharmacy's average acquisition cost (AAC) instead of the average wholesale price (AWP). That cut was mitigated by an accompanying rise in its dispensing fee to better reflect pharmacy costs. And in discussions with the pharmacy community, CMS has indicated that a shift to an AAC-based reimbursement methodology should be considered simultaneously with an enhanced dispensing fee.

In a letter to CMS, NCPA stated it was "cautiously optimistic that a switch to AAC could be an appropriate method on which to base pharmacist reimbursement as long as such a proposal would be considered simultaneously with an enhanced dispensing fee."

However, NCPA's letter noted that Oregon's latest SPA would cut the new dispensing fee and set a "dangerous precedent."

In effect, the association said, states could win CMS approval for a shift to the lower, AAC-reimbursement benchmark by also agreeing to hike pharmacy dispensing fees. Then the state could later pare the dispensing fee, further reducing pharmacy overall reimbursement and potentially jeopardizing Medicaid patients' access to pharmacies — some of which may be compelled to exit the Medicaid program instead of dispensing at a financial loss.

"Independent community pharmacists are the backbone of the Medicaid drug benefit and often serve rural and urban areas that have few, if any, other pharmacy providers," stated B. Douglas Hoey, executive vice president and chief executive officer of NCPA. "Local pharmacists can help states reduce their Medicaid costs by promoting low-cost generic drugs, where appropriate, and through face-to-face counseling on the proper use of medication. Unfortunately, this proposal is a step in the wrong direction and turns a blind eye toward the health needs of Medicaid patients. For these and other reasons, CMS should not approve it."

NCPA said that currently there are 160 independent community pharmacies in Oregon.

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