NCPA Warns Medicaid Officials on Pharmacy Reimbursement Changes

Share |

Alexandria, Va. - June 21, 2012 The National Community Pharmacists Association (NCPA) expressed "serious concern" over federal Medicaid officials' handling of proposed changes to pharmacy reimbursement in a pair of letters sent recently to officials with the U.S. Centers for Medicare & Medicaid Services (CMS). NCPA's letters come in response to efforts by CMS to implement two potentially major reimbursement changes that could diminish patients' access to pharmacies.

"Independent community pharmacies are the backbone of the Medicaid prescription drug benefit and help reduce costs through expert medication counseling," said B. Douglas Hoey, RPh, MBA. "They serve more elderly and low-income individuals than other pharmacies and are the primary source of pharmacy services in urban and rural areas. Pharmacists are committed to working with federal and state policymakers to develop a fair and reasonable Medicaid pharmacy reimbursement model. Unfortunately, recent signals out of CMS raise serious concern that future Medicaid pharmacy reimbursement could be inadequate to the point of forcing community pharmacies out of the program altogether. That could significantly diminish pharmacy access for Medicaid recipients and other patients, even as the program may be expanded to cover millions more Americans in the future."

Revising federal upper limits (FULs) for generic drug reimbursement: CMS has released nine lists of draft FULs which, if implemented, would force large financial losses on small business community pharmacies by reimbursing them below their costs of acquiring many common drugs. CMS' most recent proposed FULs could decrease reimbursement for medications by up to 46 percent.

NCPA's letter asserts that some states have begun to lower their pharmacy reimbursement based on these flawed, draft FULs. So to alleviate further confusion, NCPA calls on CMS to stop publishing draft FULs until a regulation is final. Thereafter, CMS should collect several months of data to determine if the FULs reflect pharmacy purchasing costs.

Dozens of Members of Congress have written to CMS regarding its insufficient, proposed FULs.

National Average Drug Acquisition Cost (NADAC) Survey: CMS' planned average acquisition cost survey of pharmacies raises similar concerns. While the agency has already begun asking pharmacies to submit invoices documenting their drug acquisition costs, NCPA's letter notes that many obvious questions remain unanswered and should be resolved. For example, it remains unclear what sources and methodology would be used to calculate NADAC values; how many survey responses represent a valid statistical sample from a geographic area; how CMS will define chain and independent pharmacies; and what documentation is needed to justify a weekly adjustment (as opposed to monthly) in NADAC values to reflect market changes in drug costs.

NCPA's letters reiterated that CMS should make clear that, in order to reimburse pharmacies fairly and preserve patient access, states must increase their dispensing fees to pharmacies whether states use NADAC or FULs. In addition, CMS has provided no insight as to how the FULs and NADAC will work together.

Copies of NCPA's letters to CMS are available here and here.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to or read NCPA's blog, The Dose, at

Ask Your Family Pharmacist TM