SAN DIEGO -- With the implementation of the permanent Medicare Part D drug program less than four months away, Medicaid-related pharmacy reimbursement questions remain a big hurdle for retailers, said speakers at the National Association of Chain Drug Stores Pharmacy and Technology Conference here last week.
Medicaid reimbursement policy is a "super issue," said Mark de Bruin, senior vice president, pharmacy services for Rite Aid, Camp Hill, Pa., and Pharmacy and Technology Chairman for NACDS, Alexandria, Va. No Medicaid reimbursement policy has been set, and industry leaders need to present a unified voice to Congress on the issue, he told retail pharmacists during the opening address.
"Inappropriate changes to Medicaid pharmacy reimbursement can send pharmacies across the country out of business and plummet levels of patient care beyond anything acceptable," de Bruin said.
The NACDS Policy Council, working closely with the NACDS board of directors and staff, has stepped up to propose its own solution to Medicaid reimbursement reform, de Bruin said. "It's not perfect, but it beats the heck out of letting others create it for us."
Lawmakers have been moving toward mandating reimbursements that they believe better reflect the pharmacy's actual acquisition cost, such as the so-called average sales price, or ASP, de Bruin said. President Bush has proposed ASP plus 6% as the new reimbursement method, including dispensing costs. During a special session for educators and regulators later in the day, John Coster, vice president, policy and programs, NACDS, said this approach is detrimental to retail pharmacies that do not receive the same discounts and rebates on brand-name drugs as purchasers, such as hospitals.
The average sales price approach also discourages generic dispensing, Coster said. "If pharmacies receive a fixed percentage markup from ASP, they receive greater dollar margins when they dispense more expensive, brand-name drugs." Additionally, ASP is not a publicly available and auditable price, so pharmacies will not be able to independently verify it, Coster said.
"For brand-name medications, we've proposed using a published value for product cost, known as Wholesale Acquisition Cost, or WAC, with timely reporting of that information," de Bruin said. WAC is the published price charged by the manufacturer for a wholesaler to purchase the drug.
"On the generic side, we have proposed a system that retains incentives for generic use to keep cost savings through the use of generic medications," de Bruin said.
Working with the National Community Pharmacists Association, Alexandria, and the American Pharmaceutical Association, and the Food Marketing Institute, both in Washington, as well as state pharmacy executives, NACDS has been educating lawmakers and policy makers on how changes to the Medicaid payment system will affect the pharmacy businesses and its patients, said Tony Civello, chairman, president and chief executive officer of Kerr Drug, Durham, N.C., and NACDS' chairman of the board.
"As part of that education, we created a new payment model. If implemented, this model will allow us to continue to provide Medicaid patients with our high-quality pharmacy services. If not, our future is uncertain," Civello said.
A second reimbursement change that will be going into effect with Medicare Part D is medication therapy management. "Perhaps the greatest opportunity facing us today is managing medication use," Civello said.
"The Medicare Modernization Act mandating medication therapy management offers community pharmacy an opportunity to have a significant impact, to improve quality of life and decrease cost of care," Civello said. The act states that prescription drug plans must establish medication therapy management programs for individuals who have multiple chronic diseases and take multiple covered Part D drugs.
"You've heard it said before about MTM under Part D: 'Our nation's largest payer of health care has recognized the value of managing patients' medications.' What an opportunity for pharmacy," de Bruin said.
"But what a missed opportunity if we don't capitalize on it. We know that MTM will not take off right away on Jan. 1, 2006. CMS has stated that they expect MTM services to evolve over time," de Bruin said.
Pharmacists may furnish MTM services, but plan providers, like insurance companies, also have the option of delivering the services.
"A few years from now, somebody will be delivering MTM services to millions of Medicare patients. Let's be certain it's community pharmacists," de Bruin said.