NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every other Friday.

Latest developments on Medicaid AMP-based FULs | NCPA Executive Update | January 29, 2016

by NCPA | Jan 29, 2016

Still Digging Out After the Storm

Dear Colleague,

Doug Hoey

Deciding to act the day before an actual blizzard hit the East Coast, the Centers for Medicare & Medicaid Services unleashed a blizzard of paper last week: a 658-page final rule on Medicaid Average Manufacturer Price-based Federal Upper Limits. Since Medicaid accounts for about 17% of the average independent's prescription drug business, I'd like to talk to you a bit about what NCPA is doing in this critical area.

First off, our Government Affairs team did a quick analysis, and Jan. 22 we emailed you a Special Alert with some of the positive provisions we saw. The Alert was posted in our blog The Dose with a link to the rule so you can wade through it yourself. We also reminded you of the rule being issued in eNews Jan. 26 and Jan. 28.

Secondly, we are doing a deeper dive into the weeds and will send out our summary of the rule to members soon. In fact, just last night the draft AMP-based FULs based on the final rule were released, and we are analyzing them now. We will submit formal comments to CMS as appropriate within the 60-day deadline.

In addition, we will host a NCPA Members Forum on Wednesday, Feb. 24 at 2 p.m. ET with a CMS official who will review the final rule and discuss what it means for independent community pharmacy. But I also wanted to mention something that caught my eye as we continue to plow through the rule.

"Our proposal to revise the term dispensing fee to professional dispensing fee," said CMS, "is designed to reinforce our position that the dispensing fee should reflect the pharmacist's professional services and costs to dispense the drug product to a Medicaid beneficiary."

CMS indicated that the costs states should consider include those associated with a pharmacist's time in checking the computer system for information about an individual's coverage, performing drug utilization review and preferred drug list activities, measurement or compounding of covered outpatient drugs, filling the container, beneficiary counseling, providing the completed prescription to the Medicaid beneficiary, delivery, specialty packaging and overhead associated with maintaining the facility and equipment necessary to operate the pharmacy.

This is a very positive development, reinforcing our view that a pharmacist's professional services are valuable, necessary, and should be compensated under Medicaid by the individual states. Implementation is something to monitor closely and build on for other government and private payers.

Like the two feet of snow that came down last week, this is heavy stuff. Listening to some of the internal NCPA discussions on this topic barely sounded like English with all of the acronyms and industry jargon. Fortunately, the NCPA team speaks the same language as the policy makers. They understand our points and we believe they took them seriously. NCPA along with NACDS filed a lawsuit several years ago, for example, to block a previous proposed rule because the AMP formula under consideration wouldn't have covered pharmacy acquisition costs.

Medicaid reimbursement rates are important and our recent members survey affirmed that MAC issues (and DIRs) are the membership's top two priorities. This makes them the NCPA staff's top priorities, too. We are working on them and will continue to keep you posted.


Doug Hoey