Press Releases
Finance Committee Senators Introduce Legislation to Fix Unfair Medicaid Rules for Kansas Pharmacists
Aug 02 2007
WASHINGTON, DC – Continuing efforts on behalf of community and retail pharmacists to oppose a new Medicaid formula which threatens to restrict access to prescription drugs for millions of Medicaid beneficiaries, U.S. Senators Pat Roberts (R-KS), Finance Committee Chairman Sen. Max Baucus (D-MT), and several other colleagues today introduced The Fair Medicaid Drug Payment Act of 2007.
“American families rely on their pharmacists, and this new formula for Medicaid reimbursement will create significant economic hardships for our local pharmacies, which ultimately threatens patient access to their needed drugs,” Senator Roberts said. “This particularly affects rural areas, and I am taking a stand against it to help our Kansas pharmacists.”
The Fair Medicaid Drug Payment Act of 2007 will stave off some of the most severe cuts threatening retail pharmacies, which will allow pharmacies to continue serving Medicaid patients. The legislation increases the Medicaid payment rate by which pharmacies are reimbursed from 250% of Average Manufacturer Price (AMP) to 300%. This bill also increases generic utilization in Medicaid - which will save Medicaid and its beneficiaries money - by requiring prior authorization of brand name drugs that have generic alternatives and are more expensive to the program. It also restores the well-established definition of a generic drug, which provides that a drug is deemed generic for the purposes of payment if there are three therapeutic alternatives. In addition, this legislation improves the definition of AMP so it will not unduly penalize our community pharmacies.
At issue are the concerns of the new formula that defines how pharmacies will be reimbursed under what is called Average Manufacturer Price (AMP). Congress mandated AMP under the Deficit Reduction Act. It was intended to bring pharmacy reimbursement in line with actual costs. However, earlier this summer, the Office of Inspector General found that the new AMP formula may result in reimbursements to pharmacies that are below pharmacy acquisition costs. The General Accounting Office also found similar results. Both agencies expressed concerns that this situation could adversely affect access to pharmacies for Medicaid patients. In March, Senator Roberts and Senator Salazar sent a letter to the Centers for Medicare and Medicaid Services (CMS) on behalf of community and retail pharmacists to address their proposed rule that if enacted, this legislation would fix.
“Many of my pharmacies in Kansas have contacted me and said they will either be forced out of business or forced to stop serving Medicaid beneficiaries if this new formula is not changed,” Senator Roberts said. “This is clearly not acceptable. Unfortunately under the Deficit Reduction Act we got the formula for Medicaid reimbursement wrong and I hope my colleagues will work with me to make it right.”
Senator Roberts is a senior member of the Senate Health, Education, Labor and Pensions (HELP) Committee and a new member of the Senate Finance Committee.
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“American families rely on their pharmacists, and this new formula for Medicaid reimbursement will create significant economic hardships for our local pharmacies, which ultimately threatens patient access to their needed drugs,” Senator Roberts said. “This particularly affects rural areas, and I am taking a stand against it to help our Kansas pharmacists.”
The Fair Medicaid Drug Payment Act of 2007 will stave off some of the most severe cuts threatening retail pharmacies, which will allow pharmacies to continue serving Medicaid patients. The legislation increases the Medicaid payment rate by which pharmacies are reimbursed from 250% of Average Manufacturer Price (AMP) to 300%. This bill also increases generic utilization in Medicaid - which will save Medicaid and its beneficiaries money - by requiring prior authorization of brand name drugs that have generic alternatives and are more expensive to the program. It also restores the well-established definition of a generic drug, which provides that a drug is deemed generic for the purposes of payment if there are three therapeutic alternatives. In addition, this legislation improves the definition of AMP so it will not unduly penalize our community pharmacies.
At issue are the concerns of the new formula that defines how pharmacies will be reimbursed under what is called Average Manufacturer Price (AMP). Congress mandated AMP under the Deficit Reduction Act. It was intended to bring pharmacy reimbursement in line with actual costs. However, earlier this summer, the Office of Inspector General found that the new AMP formula may result in reimbursements to pharmacies that are below pharmacy acquisition costs. The General Accounting Office also found similar results. Both agencies expressed concerns that this situation could adversely affect access to pharmacies for Medicaid patients. In March, Senator Roberts and Senator Salazar sent a letter to the Centers for Medicare and Medicaid Services (CMS) on behalf of community and retail pharmacists to address their proposed rule that if enacted, this legislation would fix.
“Many of my pharmacies in Kansas have contacted me and said they will either be forced out of business or forced to stop serving Medicaid beneficiaries if this new formula is not changed,” Senator Roberts said. “This is clearly not acceptable. Unfortunately under the Deficit Reduction Act we got the formula for Medicaid reimbursement wrong and I hope my colleagues will work with me to make it right.”
Senator Roberts is a senior member of the Senate Health, Education, Labor and Pensions (HELP) Committee and a new member of the Senate Finance Committee.
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