NACDS, NCPA to CMS: Consistency, Coordination Necessary to Remedy Flawed Medicaid Reimbursement Process

Published Online: Monday, July 15, 2013
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Alexandria, Va. July 15 2013 - Following the release of the most recent draft three-month rolling average Federal Upper Limits (FULs) by the Centers for Medicare & Medicaid Services (CMS), the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA) submitted a joint letter to CMS addressing the agency's effort to provide fair and accurate Medicaid pharmacy reimbursement.

With the expansion of Medicaid services in the Affordable Care Act on the horizon, NACDS and NCPA urged CMS to make clear to states that in order to maintain patient access to pharmacies, it is critical that dispensing fees be reviewed and adjusted to take into consideration the true cost of dispensing prescription medications to Medicaid patients.

"If the draft sets of FULs are implemented, it could result in the loss of access to community pharmacies for Medicaid patients. This could result in negative health consequences and sharply increased Medicaid costs for other health interventions if Medicaid patients cannot obtain their prescription medications," the groups stated in the letter.

The groups expressed support for CMS' proposed three-month rolling average of Average Manufacturers Price (AMP) to calculate FULs to help reduce variability and improve predictability, but also sought clarification to ensure a consistent, fair and accurate approach to pharmacy reimbursement.

"NACDS and NCPA advocate for the use of a rolling average to calculate Federal Upper Limits. However, CMS appears to be suggesting that multiple FUL lists would be calculated each month, using different factors, and states could select a FUL list to be used for pharmacy reimbursement, as long as total pharmacy reimbursement 'remain within the FUL in the aggregate.' If CMS elects to calculate and publish multiple FUL lists, additional clarity around the use of FUL lists will be necessary," the letter stated.

In addition to their most recent letter, NACDS and NCPA have long-addressed their fundamental concern with the use of AMP as a pharmacy reimbursement benchmark citing inconsistencies in how it is calculated. The pharmacy groups have also consistently urged CMS to await final rulemaking before AMP-based FULs are used to calculate pharmacy reimbursement.

In November 2007, both pharmacy groups filed a lawsuit that challenged CMS' prior implementation of the AMP model in the Deficit Reduction Act of 2005. In December 2007, a federal judge issued a preliminary injunction against that rule. NACDS and NCPA withdrew their lawsuit in December 2010 after CMS formally withdrew provisions of the AMP rule related to the definition of AMP, calculation of FULs and the definition of "multiple source drug."

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