In letters to the Centers for Medicare & Medicaid Services (CMS), the National Community Pharmacists Association has expressed "serious concern" over federal Medicaid officials' handling of proposed changes to pharmacy reimbursement.


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NCPA warns CMS about Rx reimbursement changes

June 21st, 2012

ALEXANDRIA, Va. – In letters to the Centers for Medicare & Medicaid Services (CMS), the National Community Pharmacists Association has expressed "serious concern" over federal Medicaid officials' handling of proposed changes to pharmacy reimbursement.

NCPA said Thursday that the two letters — to Cindy Mann, director of CMS' Center for Medicaid and CHIP Services, and to Barbara Edwards, director of the Disabled and Elderly Health Programs Group — come in response to the agency's efforts to implement two potentially major reimbursement changes that could reduce patient access to pharmacies.

Those changes are the revision of federal upper limits (FULs) for generic drug reimbursement and the National Average Drug Acquisition Cost Survey (NADAC).

According to NCPA, CMS has released nine lists of draft FULs that, if implemented, would result in large financial losses at small-business community pharmacies by reimbursing them below their costs of acquiring many common drugs. The agency's most recent proposed FULs could slash reimbursement for medications by up to 46%, the association noted.

In its letter to Mann, NCPA said that some states have begun to lower their pharmacy reimbursement based on these draft FULs. As a result, the association has urged CMS to cease publishing draft FULs until a regulation is final and, after that, the agency should collect several months of data to determine if the FULs reflect pharmacy purchasing costs.

NCPA explained in its letter to Edwards that the NADAC survey brings up similar concerns. Although CMS has started asking pharmacies to submit invoices documenting their drug acquisition costs, many questions remain unanswered and should be resolved, the association pointed out. For example, the association said, it's unclear which sources and methodology would be used to calculate NADAC values; how many survey responses represent a valid statistical sample from a geographic area; how CMS will define chain and independent pharmacies; and what documentation is needed to justify a weekly adjustment (as opposed to monthly) in NADAC values to reflect market changes in drug costs.

NCPA also reiterated in the letters that to reimburse pharmacies fairly and maintain levels of patient access, CMS must make it clear to states to boost their dispensing fees to pharmacies, whether states use NADAC or FULs. The association added that CMS has given no insight on how the FULs and NADAC will work together.

"Pharmacists are committed to working with federal and state policymakers to develop a fair and reasonable Medicaid pharmacy reimbursement model. Unfortunately, recent signals out of CMS raise serious concern that future Medicaid pharmacy reimbursement could be inadequate to the point of forcing community pharmacies out of the program altogether," NCPA chief executive officer B. Douglas Hoey said in a statement. "That could significantly diminish pharmacy access for Medicaid recipients and other patients, even as the program may be expanded to cover millions more Americans in the future."

Hoey noted that independent pharmacies are a linchpin of the Medicaid prescription drug benefit and help rein in costs through medication counseling. "They serve more elderly and low-income individuals than other pharmacies," he stated, "and are the primary source of pharmacy services in urban and rural areas."

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