Medicaid is a joint federal-state program that provides health coverage to certain categories of persons, including children, pregnant women, parents of eligible children, and persons with disabilities. One of its most important benefits is prescription drug coverage. All state Medicaid programs currently provide coverage for prescription drugs, although there are differences in state policies regarding copays, types of drugs that are covered, and the number of prescriptions that can be filled. While Congress and the Centers for Medicare and Medicaid Services set the general rules under which Medicaid operates, each state runs its own program.

Recent years have demonstrated that many states are looking to cut Medicaid provider reimbursements and shift their Medicaid population into managed care. Many state policymakers have been sold on the often-misleading approach that turning over the management of their Medicaid prescription drug benefit program to a contracted entity will result in notable savings. Although many states are considering shifting their Medicaid populations into managed care, NCPA cautions that such a dramatic shift is not necessarily a "cure-all," and in some cases, could result in reduced beneficiary access to services and disruptions in care.

NCPA has made efforts to work with its state partners to ensure that when a state chooses to transition to a managed care model, they do so in a manner that ensures appropriate patient access to pharmacy providers, and proper pharmacy reimbursement models. Community pharmacists know that these goals can be achieved while noting cost savings to the system. States should not simply "sign over" management of the Medicaid prescription drug benefit program and assume their contractor will properly institute a program that best serves a state's Medicaid population and its healthcare providers.

States have also begun to reassess pharmacy reimbursement benchmarks within Medicaid programs themselves. This trend will continue as states now must revisit pharmacy reimbursement as required by the Affordable Care Act and CMS.

CMS is now requiring states to move to a pharmacy reimbursement model based on the acquisition cost of the drug, referred to as an Actual/Average Acquisition Cost or AAC benchmark. Such benchmark data are compiled federally through a national survey standard referred to as the National Average Drug Acquisition Cost, NADAC, or by states who use their own acquisition cost survey method. These benchmarks base their data on pharmacy-submitted invoice pricing figures and theoretically represent a more realistic sample of pharmacy costs. However, a properly determined pharmacy cost of dispensing, or COD, fee is vital to ensuring that an AAC benchmark appropriately reimburses a pharmacy for their costs.

The coming years will prove to be extremely active ones regarding state Medicaid programs revisiting and altering their management of the prescription drug benefit. New and innovative reimbursement benchmarks will be coming on-line and it will be vital for state pharmacy interests to ensure that such programs are developed and instituted properly for the benefit of Medicaid beneficiaries and the pharmacy providers who interact with them each day. Independent community pharmacy is ready and willing to work with CMS to address rising costs in Medicaid programs in meaningful ways without compromising beneficiary access or quality of care.

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