Chain pharmacies proposed a strategy to lawmakers Tuesday to fix impending deep cuts in Medicaid’s prescription drug reimbursement policy, while independent drugstores have conceded the political climate likely will only allow for a delay in the cuts until Congress can focus on a fix next year.
In a letter to lawmakers Tuesday, National Association of Chain Drug Stores CEO Steven Anderson urged them to consider passing legislation mandating electronic prescribing to pay for a solution to the Medicaid cuts.
“Though these bills are not often mentioned in the same breath, the budget realities and healthcare needs of the day make them complementary pieces of legislation,” Anderson wrote.
Paul Kelly, vice president of government affairs for NACDS, said e-prescribing legislation proposed by Senate Small Business Chairman John Kerry and Rep. Allyson Schwartz, D-Pa., would save $3 billion. That would cover the $1.4 billion price tag of identical Medicaid reimbursement solutions introduced by Senate Finance Chairman Max Baucus and House Energy and Commerce Health Subcommittee Chairman Frank Pallone, D-N.J., to change how Medicaid calculates the average manufacturer price to determine mostly generic reimbursement. The estimates come from Kerry and a former OMB analyst, respectively.
Charles Sewell, senior vice president of government affairs for the National Community Pharmacists Association, said Tuesday that independent pharmacies are pursuing a delay given the contentious election-year climate and the potential for a White House veto. The several-month delay would most likely piggyback on a fix for Medicare physician reimbursement cuts that take effect at the end of June.
“We’ve come to the conclusion that a delay is the most likely scenario, and we’ve been told that by members of Congress, especially members in leadership,” Sewell said.
Carol Kelly, senior vice president of government affairs and public policy for NACDS, said the chain drug stores will continue to try to get the most they can this year.
“Predictions always fluctuate during a congressional session, so we remain where we’ve been: focused on a long-term, accurate model for reimbursement under Medicaid,” NACDS spokeswoman Chrissy Kopple said. “We’re in regular discussions with the Hill about the need for a solution and we’re receiving positive feedback.”
The e-prescribing legislation championed by Kerry and Schwartz has met resistance from physician groups that are concerned over implementation mandates. Chain pharmacies “understand and sympathize with the whole medical community,” but e-prescribing would be positive for the entire healthcare system and Medicaid reimbursement must be fixed, Carol Kelly said.
GAO estimates pharmacies would be reimbursed at 36 percent below their cost of acquiring most generic drugs under the Medicaid reimbursement policy in question. The dramatic reduction in reimbursement would put between 10,000 and 12,000 pharmacies out of business, according to Anderson’s letter.
NACDS and NCPA sued the Centers for Medicare and Medicaid Services over the Medicaid regulation. The U.S. District Court for the District of Columbia granted the groups an injunction that blocks the regulation in the meantime.
This article appears in the April 26, 2008 edition of NJ Daily.