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Rx coalition: More time needed for AMP-based FULs
April 9th, 2014
ARLINGTON, Va. – Pharmacy trade groups are part of a coalition calling on the U.S Department of Health and Human Services (HHS) to allow a one-year transition period for states to fully implement the Medicaid average manufacturer's price (AMP)-based federal upper limits (FULs) for prescription drugs.
In a letter sent Wednesday to HHS Secretary Kathleen Sebelius, the National Association of Chain Drug Stores, National Community Pharmacists Association, American Pharmacists Association, Food Marketing Institute, Generic Pharmaceutical Association, Healthcare Distribution Management Association and National Alliance of State Pharmacy Associations said patient access to pharmacy services could be impacted if states don't have enough time to make the change.
"Given CMS' [Centers for Medicare & Medicaid Services'] expectation that states adjust both the drug reimbursement and dispensing fees for Medicaid reimbursement by July 2014, we are concerned that many states are not ready to make such a quick transition," the groups stated in the letter. "Therefore we are requesting that CMS allow states a transition period for implementation of the FULs and corresponding dispensing fee changes to be one year from the time the states have everything they need for implementation from CMS."
In November, CMS announced final publication of the National Average Drug Acquisition Costs (NADACs) and indicated that the final AMP-based FULs would be published in July. CMS also stated that the final AMP rule would be released in May.
However, according to NACDS, there are concerns that the final rule release date may be delayed, even though CMS has maintained that the July publication of the final AMP-based FULs is a hard deadline and it expects immediate state implementation of the new FULs.
"While CMS may be ready to implement changes to the ingredient side of the formula immediately in July 2014, states face additional obstacles that hinder their ability to be so expedient," the letter said. "Most states require legislative or regulatory changes, have short legislative sessions this year that do not allow for Medicaid reimbursement changes, will have to do a cost-of-dispensing-fee study prior to implementing a dispensing fee change, and/or will have to file a State Plan Amendment to implement such a change."
The groups that signed the letter noted that they have long held that AMP is an inaccurate benchmark for pharmacy reimbursement, and there's no correlation between the weighted AMP and pharmacy acquisition costs.
In the letter, the organizations also cited a September 2013 letter by the National Association of Medicaid Directors (NAMD) to CMS requesting that the agency provide states with a transition period of up to one year for implementation of AMP-based FULs to protect access to pharmacy services for Medicaid beneficiaries. "We share NAMD’s concern about beneficiary access to pharmacy services," they said in Wednesday's letter.
"While we remain hopeful that CMS will utilize the rulemaking process to implement Medicaid pharmacy provisions in a manner that will ensure that pharmacies are not reimbursed below cost," the groups stated, "we are still concerned with the flawed AMP-based methodology and CMS' timeline for implementing the new AMP-based FULs."