NCPA Urges CMS Not to Approve Mississippi Medicaid Proposal Endangering Patient Access to Pharmacy Prescription Drug Services

Alexandria, Va. - April 14, 2010

The National Community Pharmacists Association (NCPA) has sent a letter to the Centers for Medicare and Medicaid Services (CMS) strongly opposing Mississippi's plan to reduce pharmacy reimbursements by 15% for the remainder of this fiscal year. The approval is required by the federal government in its partnership with states to provide health care services to economically disadvantaged and disabled Americans. The letter echoes the sentiment expressed by the Mississippi Independent Pharmacies Association (MIPA), which has taken the lead in opposing the cuts and has filed a request to amend an existing lawsuit to prevent the cuts from occurring. 

"The still-troubled economy is causing the Medicaid rolls to grow across the country, which is why cuts that could squeeze some pharmacies and other health care providers to the financial breaking point are bad public policy," said Bruce T. Roberts, RPh, NCPA executive vice president and CEO. "If that happens, Medicaid patients would likely lose access to prescriptions drugs and seek more expensive health care options like doctor's offices and emergency rooms, or even possible hospitalization if their health deteriorates enough. That's why NCPA joins the Mississippi Independent Pharmacies Association in opposing Mississippi's plan to dramatically cut pharmacy reimbursements." 

What follows is a copy of the letter: 

Cindy Mann, Director
Center for Medicaid and State Operations
Centers for Medicare and Medicaid Services
200 Independence Avenue, S.W.
Washington, D.C. 20201

Dear Director Mann, 

The National Community Pharmacists Association (NCPA) is writing to request that the Centers for Medicare and Medicaid Services (CMS) not approve the proposed State Plan Amendment submitted by the Mississippi Division of Medicaid that would reduce pharmacy payment by 15% for the remainder of FY 2010. These rate reductions are to be achieved through a decrease in the rates paid for ingredient costs. The state of Mississippi has proposed this reduction to pharmacy reimbursement as well as similar reductions to reimbursement for other Medicaid providers to offset a state budget shortfall. 

NCPA represents the pharmacy owners, managers and employees of more than 22,000 independent community pharmacies across the United States. The nation’s independent pharmacies, independent pharmacy franchises and independent chains dispense nearly half of the nation’s retail prescription medications. At the present time, there are 415 independent community pharmacies that employ over 4,000 people in the state of Mississippi. 

Under CFR 447.331, states are required to reimburse pharmacy providers for the estimated acquisition cost of the drug plus a reasonable dispensing fee. The State has failed to demonstrate that there has been a 15% across the board reduction in the estimated acquisition cost of prescription drugs in the state of Mississippi. The State by its own admission is attempting to implement these blanket Medicaid reductions to balance a budget shortfall that could be remedied by the implementation of a variety of other methods at its disposal. In addition, Mississippi did not provide adequate notice and a sufficient comment period with regard to this state plan amendment in direct violation of 42 U.S.C. 1396a(a)(13)(A)(2000) which provides in relevant part: "A state plan for medical assistance
must...provide...for a public process for determining rates of payment..." The notice of plan adoption was filed with the Mississippi Secretary of State on March 31, 2010 with the rule to be become effective the next day, April 1, 2010.

CMS approval of this or any similar state plan amendment would set a dangerous precedent. If states are permitted to temporarily cut Medicaid provider reimbursement levels at any time the state would like to conserve money for other purposes, state Medicaid programs are going to have increased difficulties attracting and retaining qualified providers. The Medicaid Act at 42 U.S.C. 1396a(30)(A) provides that an agency's payments "must be sufficient to enlist enough providers so that services under the plan are available to recipients at least to the extent that those services are available to the general population." Pharmacy providers that are aware that the Mississippi Medicaid Agency may simply cut reimbursement levels to deal with a budgetary issue will be less likely to participate in the Medicaid program which could have serious repercussions in the future with regard to beneficiaries' access to care. Restricting Medicaid beneficiaries' access to pharmaceutical care could have dire consequences—leading to an increase in the need for medical care and emergency room admissions—at significant cost to the state. 

NCPA strongly recommends that CMS reject proposed Mississippi State Plan Amendment (SPA2010-024) and send a strong message that states may not simply cut Medicaid provider payments in violation of federal regulations in order to remedy a state budgetary situation that could be dealt with in a variety of alternate ways. Thank you for allowing us the opportunity to comment and please do not hesitate to contact us for any additional information or to dialogue further on this matter. 


John M. Coster, Ph.D, R.Ph.
Senior Vice President, Government Affairs
National Community Pharmacists Association

The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at

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