NACDS testifies on impact of rules governing Medicare, Medicaid payments

ALEXANDRIA, Va. Looming cuts in Medicaid prescription reimbursements will fail to cover the cost of business for many community pharmacies and could threaten patients’ access to medications, a pharmacy executive testified today before a congressional panel.

Appearing on behalf of the National Association of Chain Drug Stores, H-E-B Grocery Co. executive Dennis Wiesner told the U.S. House Committee on Small Business, Subcommittee on Regulations, Health Care and Trade that federal policies on Medicare and Medicaid pose major challenges for the nation’s pharmacy retailers.

Wiesner, senior director of privacy, regulatory, government and industry affairs and pharmacy managed care for the Texas-based supermarket chain, was one of several experts to testify at the hearing. The panel’s intent today: to examine the impact of regulations and programs from the U.S. Centers for Medicare and Medicaid Services on small health care providers.

Wiesner said NACDS’ roughly 200 member chains are “deeply concerned” about three areas of federal policy. Among them:

• The impact of “unfair Medicaid cuts” for pharmacy services;
• “Program inefficiencies and unfair treatment of retail pharmacy” under the Medicare Part D drug benefit program;
• Threats posed by increasingly difficult requirements for retailers wishing to participate in the Medicare Part B program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies, including new mandates that will require retailers to engage in competitive bidding in order to sell those products under Medicare. These regulations, said Wiesner, are likely to reduce the number of available providers and hamper seniors’ access to vital medical supplies—including diabetic testing kits.

Wiesner called particular attention to the change in Medicaid reimbursements as a result of budget cuts imposed by the Deficit Reduction Act. Efforts by CMS to shift Medicaid payments for generic drugs to a new federal upper limit based on the lowest reported average manufacturer price mark “a significant change” in the way those payments are calculated, he told lawmakers. The result, he added, would be to significantly underpay retailers for dispensing those drugs under Medicaid.

“The DRA cuts to Medicaid reimbursement, and the final rule to implement those cuts, place many retail pharmacies at risk of being forced to eliminate service to Medicaid recipients or close altogether,” Wiesner asserted. Many pharmacies, he testified, “will not survive the AMP cuts due to payments lower than their purchase price for generic drugs.”

Indeed, as many as 20 percent of all U.S. pharmacies could be forced out of business by the cuts, the pharmacy leader warned.

Wiesner also raised alarms about the Part D benefit program, which he said “is still plagued by some design and administrative problems that often create access difficulties for beneficiaries.” Those problems, he said, include unnecessarily long lag times between enrollment and eligibility, lack of access to extended supplies of medicines and “inadequate disclosure of terms for reimbursement” from the prescription drug plans administering Part D benefits.