Pharmacy group blasts Medicaid pay cut plan

Sparked by a Government Accountability Office analysis suggesting that neighborhood pharmacies could lose more than a third of their Medicaid reimbursement, a national pharmacy group has issued yet another challenge to Medicaid reimbursement policies for pharmacies. According to a newly-issued report prepared by the GAO, which the group says was issued in late December but only released Monday (implying sneakiness on the part of the Administration, they suggest), a new CMS formula for funding drug costs could cut Medicaid payments to pharmacies by 36 percent. The cuts spring from the implementation of the Deficit Reduction Act of 2005, which has had the members of the National Community Pharmacists Association up at arms since its inception. But actually, the battle is much older than that. NCPA has been fighting the use of a key element of the formula, the Average Manufacturer Price (AMP), for several years now.

The formula, which is congressionally mandated, sets a maximum amount states are allowed to pay pharmacies if they want to keep getting Medicaid matching funds, which will be based on a number 250 percent of the lowest AMP for drugs it purchases. Such a standard could impose serious financial hardship on neighborhood pharmacies, pushing some out of business, argues the NCPA, which represents 24,000 pharmacies. "NCPA supports a fair and transparent system to reimburse pharmacists under Medicaid, but not a system that penalizes pharmacists for participating in the program," said the group's executive vice president and CEO Bruce Roberts, RPh. At minimum, NCPA is hoping to see AMP redefined in a way that doesn't slash payments to its members, and is lobbying hard on the Hill to see that happen.

For more information on the Medicaid reimbursement dispute:
- read the group's press release

ALSO: A new bill intended to require federal officials to negotiate with drug companies for lower prices may not pass, but it has a future, one editorial suggests. Column

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