Passage of reform ushers in new era

WASHINGTON, D.C. —After a year of often-bitter debate and increasing polarization between Democrats and Republicans over the proper role of government in the U.S. healthcare system and insurance industry; after furious lobbying by pharmacy groups and other healthcare stakeholders; and after the seemingly spontaneous but sometimes orchestrated rise of the citizens’ backlash movement known as the Tea Party, change has come. The most sweeping reform of the U.S. healthcare system and insurance industry in more than four decades is law.

Now it’s time, said President Obama at a jubilant bill-signing March 23, to replace “the overheated rhetoric” of the healthcare debate with “the reality of reform.”

Enactment of the massive legislation has come at a cost: a deepening divide among lawmakers and between Americans on both sides of the issue. But whether or not the opponents of health reform tone down their rhetoric and the Obama administration is able to craft coherent and cost-effective policy from the new law, the “reality of reform” is inescapable. In its wake, changes large and small are coming to retail pharmacy.

The reform package will have profound effects on the healthcare marketplace, and opponents already are preparing to challenge its constitutionality in court. The overhaul will expand health coverage to an estimated 32 million uninsured Americans, prevent insurance companies from denying coverage for pre-existing conditions and fund creation of a “health exchange” through which Americans can shop for insurance. It also will allow parents to keep their children on family policies until age 26.

In coming years, the law also will require all Americans to buy insurance, and most employers to provide coverage. Subsidies, tax credits and other incentives will help defray the cost for lower-income Americans and small employers. To offset its nearly trillion-dollar projected cost, the law establishes new cuts in Medicare fee-for-service payments and new taxes on “premium” insurance plans from employers.

For pharmacy retailers, the House bill retains pharmacy-friendly elements long sought by the industry. Among them: higher payments for Medicaid prescriptions based on the average manufacturer’s price of a generic drug. “The legislation includes important changes in the definition and method of calculating AMP, as compared with the Deficit Reduction Act of 2005,” noted the National Association of Chain Drug Stores. “These changes, long advocated by NACDS and pharmacy allies, are essential to achieving a better approximation of pharmacies’ costs for purchasing generic drugs. The bill also would ensure federal upper limits are set using a multiplier of ‘no less than’ 175%—much higher than the levels set under the [DRA].”

The new law will end some recently imposed curbs on the sale of durable medical equipment and diabetic supplies by retail pharmacies, and provide a conditional exemption for pharmacies from the DME Medicare accreditation requirements. Also coming: new transparency requirements on pharmacy benefit managers. The law also will fund pilot programs to demonstrate the viability of medication therapy management by pharmacists, as well as improvements to the Medicare Part D MTM benefit.

Pharmacy leaders endorsed some aspects of the health and insurance overhaul. Bruce Roberts, EVP and CEO of the National Community Pharmacists Association, called those provisions “welcome steps toward improving the delivery of prescription drug services to patients across America.” However, he said, “other challenges remain, and the implementation process will require our input to ensure the transition is a smooth one.”

NACDS president and CEO Steve Anderson also declared support. “Pharmacy’s provisions have been maintained,” he noted. “Some very supportive leaders on Capitol Hill stepped up and kept these issues in the mix, and we appreciate their pro-patient, pro-pharmacy commitment. As we have said all along, advancing NACDS’ priorities will require continued vigilance…into a regulatory process,” Anderson added. “This, in many ways, is still the early stage of our campaign to advance pharmacy’s value and viability as the face of neighborhood health care.”