Proposed Rule Brings Fair Reimbursement One Step Closer

Expected to save taxpayers billions over the next 5 years, the proposed rule would sync reimbursement with what pharmacies actually pay.

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that could save the federal-state Medicaid program $17.7 billion over a 5-year period. The program will change how states reimburse pharmacies for drugs that they purchase for Medicaid patients. Rather than reimbursing states for the drugs based on pharmaceutical company list prices, states would reimburse pharmacies based on the price they paid for the medicines. This idea is based on an existing program that has been used successfully in Alabama.

The CMS proposed rule also includes language that would allow the federal government to help states determine the wholesale price for drugs by creating a national database of wholesale drug prices. Additionally, the rule would increase what drug companies currently pay states for purchased drugs, and drugs purchased through the Medicaid managed care program would be covered by the rebates. The proposed changes were called for in the Patient Protection and Affordable Care Act.

“There’s a rich history of individual pharmaceutical companies getting nailed in court for defrauding state governments in pricing,” says Matt Salo, director of the National Association of Medicaid Directors. The lack of transparency makes it difficult for states that are trying to reduce their pharmaceutical bills.

States have taken a number of actions to reduce prescription drugs expense, including promoting generic medications for patients on Medicaid and limiting beneficiaries’ refills or prescriptions. A Kaiser Family Foundation survey found that almost every state took action last year to decrease spending on prescription drugs.

For pharmacists, this rule could mean fair reimbursement, but until the details are known, pharmacists should keep an eye on this bill. Specifically, pharmacists will want to watch the filing requirements and processes proposed to implement this program and keep in touch with their state representatives as this moves into regulatory review. In addition, starting February 2, 2012, this Proposed Rule can be viewed on the Federal Register Web site. The public comment period ends April 2, 2012, and CMS plans to issue a final rule in 2013.