A New Approach to Medicaid Reimbursement for Pharmacists

By Kevin Schweers

Community pharmacists and state Medicaid directors are watching a pair of state plan amendments Alabama is expected to propose soon to the U.S. Centers for Medicare and Medicaid Services. 

As community pharmacists arrived for the 2010 Legislation and Government Affairs Conference, members of the National Community Pharmacists Association and the National Alliance of State Pharmacy Associations discussed that and other pharmacy issues with Carol H. Steckel, MPH, Alabama’s Medicaid Director and Chair of the National Association of State Medicaid Directors’ Executive Committee.

Steckel said her office is working toward getting a more accurate picture on both a pharmacy’s acquisition and dispensing costs. That’s at the heart of two plan amendments Alabama is preparing to send to CMS.

The first would reduce the rates at which the state reimburses pharmacies for drugs purchased for dispensing. Payment would be made at average actual acquisition costs for retail pharmacies based on invoices submitted by pharmacies. Getting the methodology right is critical, but no easy task.

The second would increase the dispensing fees paid by the state from about $5.40 to $10.64. The net impact, of course, would vary by pharmacy. NCPA will review the proposed amendments when they become available and may submit formal comments to CMS.

One Alabama pharmacist in attendance predicted the change would amount to a net cut in overall reimbursement for that particular pharmacy, but would likely keep it at a manageable level. Steckel said the state is hopeful for a speedy review by CMS and ideally would like to implement it in August.

Next up for Alabama is developing a medical home approach for beneficiaries and incorporating pharmacists. Steckel acknowledged savings community pharmacists bring into the system through medication counseling and advice. The challenge is to quantify that savings so that they can be shared between the state and the community pharmacist. “It’s a win-win across-the-board,” she said. (On a related note, it’s the rationale behind Mirixa.)

Steckel noted that state-pharmacist partnership will be particularly critical with the implementation of health reform. Medicaid covers about 20% of Alabamans and, by 2014, under the new health reform law, it will cover more lives than Medicare, she said. ”I think pharmacists will play a major role in helping us with that huge influx of people into the system,” Steckel added.

One of the biggest provisions affecting pharmacy in the health reform law is a provision changing the federal upper limit for generic drug reimbursement under Medicaid, establishing it at no less than 175% of a weighted average manufacturer price. Steckel praised the working relationship CMS developed with the states, but could not say how soon she thought CMS might implement the change through the rulemaking process.

“We really do appreciate what you do for our beneficiaries and we’ll look forward to working with you on implementation,” Steckel concluded.

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