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 Friday.

We'll Sue If We Must - and This Time We Must | NCPA Executive Update | March 31, 2017

by NCPA | Mar 31, 2017

Dear Colleague,

Doug Hoey

During the debate over the American Health Care Act (the repeal and replace Obamacare bill), I heard one radio talking head say that any efforts to try to fix health care are paramount to getting involved in a land war in Asia—chances of success are minimal.

Last week, that wisdom (borrowed from none other than the 1987 movie "The Princess Bride") seems to have held true as the vote on the AHCA in the House was cancelled (at least for now) because of the strong likelihood it did not have the votes to pass.

Meanwhile, Obamacare, the Affordable Care Act or ACA, continues to survive. One of its provisions has a direct effect on how much Medicaid reimburses you for prescription drugs. Beginning April 1, states not using Medicaid Managed Care are required to choose between reimbursing pharmacies using 175% of Average Manufacturer Pricing (AMP) or the National Average of Drug Acquisition Cost (NADAC) plus a reasonable dispensing fee based on cost of dispensing (COD) survey data.

You may or may not remember the checkered history of using AMP as a reimbursement methodology. It was originally passed by Congress in 2007 but, because of how CMS implemented it, NCPA and NACDS successfully sued. A U.S. District Court issued a temporary restraining order that stopped the implementation for close to a decade. That action by NCPA and NACDS, by the way, saved pharmacies and the patients they serve over $5 billion.

AMP was finally revised in the second wave of the ACA, and last year CMS provided guidance for how it was to be implemented starting tomorrow. And, here we are on March 31, the day before the implementation deadline, and at least one state, we believe, has disregarded CMS' regulation and set its COD at less than half what most other similar surveys have found is the minimum amount pharmacies need to break even.

Washington state is saying it will only pay pharmacies NADAC plus between $4.24 - $ 5.25 (depending on volume) for Medicaid fee-for-service prescriptions. In comparison, there are nine states that had previously adopted a type of "cost plus" payment system—including neighboring states Oregon and Idaho.

The lowest dispensing fee for an average pharmacy out of all of those states is $9.47 in Nevada. In Idaho, it's $11.51-$15.11 depending on prescription volume, and $9.68-$14.01 in Oregon also depending on Rx volume. What's more, an independent study commissioned by NACDS and NCPA found that the COD in Washington is more than double the proposed professional dispensing fee for Medicaid prescriptions in this new rule.

When it comes to pharmacy practice, Washington has been a trailblazer. The state was a leading voice in the movement to allow pharmacists to immunize, as one example. But this time, the state has got it wrong. As a result, NCPA, NACDS, and the Washington State Pharmacy Association have no other choice but to take legal action to stop this wrongheaded move.

Yesterday, the three pharmacy associations filed a lawsuit against Washington seeking to block implementation of the cuts until the state properly follows the CMS regulation for determining an appropriate COD fee.

We don't enter into legal action lightly—it's costly, can be drawn-out and risky—but we are determined to do all in our power to have a successful outcome in Washington state to protect not only our Washington pharmacies, but also to ensure that other states don't follow Washington's lead and ignore CMS' regulations.

Times like this are a reminder that looking after our members and the patients you serve is core to NCPA's mission. Thank you for belonging. We'll keep you posted on this lawsuit's progress.

Doug Hoey

P.S. - Lawsuits require time and money, as you know. Help us help you. Invest in the NCPA Legislative/Legal Defense today.

P.P.S. Don't forget that your members of Congress are home for a two-week recess starting today. Invite them to your pharmacy and tell them about the scourge of retroactive DIR fees and PBM abuses while they're nearby. It's the perfect set-up for our Capitol Hill visits during our Congressional Pharmacy Fly-In April 26-27 here in DC. And yes, we're counting on you to join us for those, too!