CMS: Medicaid Prescription Drug Reforms Could Save Billions

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Centers for Medicare and Medicaid Services issues final ruling that seeks to rein in the growing cost of prescription drugs.

The Centers for Medicare and Medicaid Services (CMS) has given a final ruling on the Affordable Care Acts (ACA) reform of the prescription drug rebate and reimbursement systems. The ruling could potentially save the federal and state governments a significant amount of money, according to CMS.

The “Covered Outpatient Drugs” ruling addresses how CMS will ensure that reforms to Medicaid prescription drug payments are effectively implemented. CMS also seeks to monitor the implementation of requirements that increase rebates and set limits on federal reimbursements by providing details on how reimbursements are calculated.

This ruling provides the framework for the Medicaid drug rebate and reimbursement programs. The ruling seeks to ensure that rebates accurately account for market prices, in order to maximize taxpayer savings.

It will also close any loopholes and give pharmacies the incentive to utilize generic drugs by making sure the right reimbursements are given for the cost and give territories more tools manage Medicaid drug costs.

These new reforms have the potential to save state and federal governments approximately $2.7 billion over 5 years.

“Millions of Medicaid beneficiaries rely on prescription medications to manage chronic illnesses or treat acute conditions,” said CMS Deputy Administrator and Director of CMS, Vikki Wachino. “But recently, the cost of prescription drugs has been rising rapidly, creating fiscal pressure and potentially compromising beneficiary access. This final rule makes changes that will save taxpayers billions and ultimately improve beneficiary access to prescription drugs.”

For more information, visit the Covered Outpatient Drugs (CMS 2345-F) (PDF) at Federal Register: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-01274.pdf

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