NACDS seeks passage of E-prescribing bill to finance Medicaid reimbursement rule change

Apr 23 2008

National Association of Chain Drug Stores CEO Steven Anderson on Tuesday in a letter asked lawmakers to pass a bill (HR 4296) that would require physicians who participate in Medicare to adopt e-prescribing by 2011 to finance legislation (S 1951, HR 3700) that would revise a new rule related to Medicaid reimbursements to pharmacies, CongressDaily reports (Edney, CongressDaily, 4/23).

The rule, which would redefine the average manufacturer price for brand-name and generic medications, would reduce Medicaid reimbursements for treatments. States use AMPs to calculate Medicaid reimbursement rates for medications. Under the rule, the federal government would post AMPs on a Web site that consumers could access. In addition, the rule would limit the federal share of the cost of brand-name medications when at least one generic version is available. The rule would exclude pharmacy benefit managers and pharmacies in nursing homes and assisted living facilities. According to CMS, the rule would save the federal government and states $8.4 billion over the next five years (Kaiser Daily Health Policy Report, 12/18/07).

NACDS and the National Community Pharmacists Association in November 2007 filed a joint lawsuit against HHS and CMS over the rule, and the U.S. District Court for the District of Columbia in December 2007 issued a preliminary injunction to block implementation of the regulation, which would have taken effect in January.

Legislative Response

The letter said that passage of the e-prescribing legislation, sponsored by Sens. John Kerry (D-Mass.) and John Ensign (R-Nev.), would result in savings of $3 billion, which lawmakers could use to finance legislation -- sponsored by Sen. Max Baucus (D-Mont.) and Rep. Frank Pallone (D-N.J.) and estimated to cost $1.4 billion -- that would revise the rule to address the concerns of pharmacies. Under the rule, Medicaid reimbursements to pharmacies for most generic medications would decrease to 36% less than cost, according to the Government Accountability Office. According to the letter, the rule would force between 10,000 and 12,000 pharmacies to close.

Meanwhile, Charles Sewell, senior vice president of government affairs for NCPA, on Tuesday said that the group will seek a delay in implementation of the rule (CongressDaily, 4/23).