Inside This Issue - News
Long AMP battle comes to a close
December 6th, 2010
ALEXANDRIA, Va. – Three years after a federal judge blocked the government from lowering Medicaid pharmacy reimbursement rates, the issue will be officially over this month.
The Centers for Medicare & Medicaid Services (CMS) issued a final rule last month, which will withdraw provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer price (AMP) model on December 15.
The trade associations representing the nation’s community pharmacies say that if the original reimbursement scheme had gone into effect, drug stores across the country would have lost millions of dollars a day and many would have been forced to close their doors.
A spokeswoman for the National Association of Chain Drug Stores says a report by PricewaterhouseCoopers, commissioned by NACDS and the Food Marketing Institute, estimated that the cuts would have forced the closing of 11,000 pharmacies — or 20% of all stores.
Since they got U.S. District Court Judge Royce Lamberth to issue a preliminary injunction on December 14, 2007, to block the government’s reimbursement plan, NACDS and the National Community Pharmacists Association say community pharmacies have been spared $5.75 billion — or $5.5 million a day — in cuts.
“As we have said all along, this legal strategy was an important last resort while we pursued the only long-term solution: new legislation,” the NACDS spokeswoman says, noting that the health care reform law passed earlier this year played a key role in getting CMS to withdraw its plan.
Still, NACDS warns that while the battle may be over, the war continues.
“The current political dynamics and the implementation phase of health care reform requires our continued proactive footing,” the spokeswoman says.
NACDS has identified several issues that will impact community pharmacies in 2011. Chief among them, the association points out, will be continuing to ensure that state and federal lawmakers understand the role of pharmacy in controlling health care costs, along with ensuring that payments to pharmacies are not slashed as legislators continue to search for ways to reduce spending.