Congress Shows Signs of Doubt Over Medicaid Fee Changes

Feb 27, 2007 3:00 AM

WASHINGTON -- Opposition to proposed changes to the pharmacy reimbursement formula for generic medications in the Medicaid program has been expressed by members of the House and Senate. The formula, which calls for a reimbursement rate of 250% of the manufacturer‘s price for the drug, is meant as a way to implement the Budget Deficit Reduction Act of 2005. The act proposed $8.4 billion in Medicaid cuts over a five-year period. Bipartisan letters, authored by Reps. Marion Berry, D-Ark., and Jerry Moran, R-Kan., and Sen. Max Baucus, D-Mont., and signed by 74 members of Congress, criticizing the reimbursement model, were sent to Leslie Norwalk, acting administrator of the Centers for Medicare and Medicaid Services, Baltimore, last week. The House letter said the "proposed payment formula will be devastating to many community retail pharmacies, Medicaid beneficiaries and the financing of the Medicaid program itself." Both letters cited a recent Government Accountability Office study that found that the proposed regulations would force pharmacists to accept Medicaid reimbursement for generic drugs that is, on average, 36% below their acquisition cost. The letters were seeking a delay in the adoption of the new payment formula, which is set to take effect July 1. -- Wendy Toth