NACDS prepares members for the unthinkable

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WASHINGTON — Given the high stakes, the National Association of Chain Drug Stores made sure that pharmacy’s voice was heard in the wrangling over the nation’s debt ceiling and its members were prepared in the event that no deal was reached.

NACDS sent a letter to President Obama and congressional leaders that spotlighted critical pharmacy services provided through federally funded programs such as Medicare, Medicaid and TRICARE.

“We recognize that you are faced with an incredibly difficult task as the White House and Congress develop a comprehensive plan for debt reduction,” NACDS said in the letter. “However, we urge you to avoid cost-cutting initiatives that actually would bring about the unintended consequences of driving up health care costs in other areas, and at levels that are higher than the perceived savings.”

As the heated negotiations between the president and lawmakers continued late last month, NACDS warned members that failure to resolve the issue would threaten retailers’ Medicare, Medicaid and TRICARE reimbursements.

If no deal was in place by August 2, the date the administration said the government would not have enough money to meet all of its obligations, pharmacy reimbursements for Medicare Part B drugs would likely be immediately delayed, according to Carol Kelly, NACDS’ senior vice president for government affairs and public policy. Compensation for such durable medical equipment as diabetes testing supplies would also be held up.

For Medicaid, states receive quarterly payments from the Centers for Medicare and Medicaid Services (CMS). The next payment is due on September 1. Assuming an agreement on the debt ceiling is reached by then, Medicaid payments should continue uninterrupted, but delays are possible, Kelly said.

CMS payments for the Medicare Part D benefit for seniors are made directly to plans, which in turn reimburse pharmacies. Plans receive monthly prospective payments for each enrollee, which are later adjusted for factors such as low-income or long-term institutionalized members. Since plans will have received their August payment, “we expect pharmacies would continue to be paid, at least during the month of August,” Kelly said.

The Department of Defense’s TRICARE program provides drug benefits for armed forces members, veterans and their families. The department does not make prospective payments to Express Scripts, TRICARE’s pharmacy benefit manager. While the department has not received information on how to move forward in the event of a default, “we anticipate that pharmacy reimbursement would be delayed,” Kelly said.

At presstime, rival bills from House Republicans and Senate Democrats were being considered by Congress, but neither was given any chance of passing the full body.

One positive development for drug chains was the revelation that the government could probably continue to pay its bills for several days after the deadline. Wall Street banks and a research organization estimated that the government would not run out of cash until August 10. Still, analysts warned that predictions of when funds would dry up were inexact and every day without an agreement would increase the likelihood of a default.


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