NCPA Backs Reps. Boyda and Moran’s Letter to CMS Seeking Delay in Implementation of Medicaid Pharmacy Reimbursement Cuts

To: POLITICAL EDITORS

Contact: Robert Appel, Senior Vice President of Communications of the National Community Pharmacists Association, +1-703-838-2682, bob.appel@ncpanet.org

ALEXANDRIA, Va., May 23 /PRNewswire-USNewswire/ — The National Community Pharmacists Association (NCPA) voiced its support for a letter sent Monday by Reps. Nancy Boyda (D-Kan.), Jerry Moran (R- Kan.), and 107 other members of the House urging the Centers for Medicare & Medicaid Services (CMS) Acting Administrator Leslie Norwalk to impose a six-month delay in implementing Medicaid pharmacy reimbursement cuts for generic prescription drugs. The formula, based on a new calculation of Average Manufacturer Price (AMP), is part of $8.4 billion worth of cuts enacted under the Deficit Reduction Act of 2005. A full 95 percent of the cuts to the Medicaid program target retail pharmacies and the patients they serve. The CMS directive is slated to begin July 1, but the letter urges CMS to push that date back until Dec. 31 to allow time for Congress to correct this situation.

According to a Government Accountability Office report, the CMS- defined AMP would result in community pharmacies being reimbursed 36 percent below their acquisition cost for generic drugs. As a result, community pharmacies, especially in rural and underserved communities, might be forced to stop providing Medicaid coverage or even go out of business.

“This is a severe situation for community pharmacies — one that could affect communities across the country,” said NCPA executive vice president and CEO Bruce Roberts, RPh. “CMS has been unreceptive to modifying its proposed AMP reimbursement formula to one that reflects, at a minimum, the actual acquisition costs of community pharmacies. Reps. Nancy Boyda and Jerry Moran are showing leadership in trying to make the best of a bad situation by seeking a six- month delay in the launching of this flawed policy. Their recommendation to CMS gives states time to ensure patients are able to get their health care needs met at community pharmacies.”

Boyda and Moran’s letter offers a practical rationale for the delay by saying, “It is crucial that the 56 Medicaid Agencies (states and territories) have enough time to translate nationwide CMS rules into a workable and realistic system for their state- specific program. State Medicaid directors tell us that it takes four to six months to run complex rules into changes in state programs.”

The letter also indicates that states most likely will offset the reimbursement cuts by recalibrating their state-paid dispensing fees.

Administrator Norwalk and Health and Human Services (HHS) Secretary Michael Leavitt have received a total of five letters from the House and Senate questioning the fairness of the AMP formula. The letters ask questions about the potentially catastrophic consequences of the policy, while others seek remedies to avoid that outcome. In each instance, neither CMS nor HHS has done anything but offer pro forma written responses. With AMP scheduled for implementation in 40 days, the reality is that proper preparation needs to be undertaken at the state level to limit the damage.

“It is amazing that CMS has avoided the hard truths about the unintended consequences of its ill-advised AMP formula,” said NCPA president John Tilley, RPh, a pharmacy owner from Downey, Calif. “The clock is ticking on a government-induced health care crisis. Community pharmacies that so many Americans rely upon will not be able to survive under a reimbursement rate that is below cost. A fix at the federal level is desperately needed. If a delay is given, Congress will have time to address the situation so that patients can continue to have access to their medicines at community pharmacies.”

To view the Boyda/Moran letter, go to:

http://www.ncpanet.org/pdf/leg/letter-amp20070518house.pdf.

The National Community Pharmacists Association, founded in 1898, represents the nation’s community pharmacists, including the owners of more than 24,000 pharmacies. The nation’s independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation’s retail prescription medicines. To learn more, go to http://www.ncpanet.org.

SOURCE National Community Pharmacists Association

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