NCPA: Medicaid officials should reject Ohio pharmacy cuts

ALEXANDRIA, Va. A group representing the nation's independent pharmacies said that one state's plan to sharply cut the pharmacy dispensing fee under Medicaid would increase healthcare costs, shirk the state’s statutory duty to give Medicaid recipients equal access to care and harm independent pharmacies.

In a letter to the Center for Medicare and Medicaid Services, the National Community Pharmacists Association urged the agency not to approve a Medicaid state plan amendment submitted by the state of Ohio. The proposal would slash the state’s already low Medicaid dispensing fee from $3.70 to $1.80. The average state Medicaid dispensing fee is $5.02, well below the pharmacy’s $11.01 cost of dispensing, according to an NCPA analysis.

“NCPA is very concerned that the drastic proposed cut in the pharmacy dispensing fee will have a devastating effect on independent community pharmacies,” wrote NCPA SVP government affairs John Coster, Ph.D., R.Ph. “Independent pharmacies serve a significant number of Medicaid beneficiaries and derive on average about 15.5% of their total revenue from such business.”

The cuts could shutter independent pharmacies with a high volume of Medicaid patients, Coster noted, in contrast to large chains. While many patients would be impacted, it appears that Ohio’s plan would particularly create significant disparities in access for Medicaid recipients, in violation of the Medicaid Act under 42 U.S.C. 1396a(30)(A), NCPA said. Another likely byproduct, NCPA suggested, would be an increased need for more such costly healthcare services as emergency room admissions, at significant cost to the state.

Independent community pharmacists can help the state reduce healthcare costs by promoting the optimal use of prescription drugs and counseling beneficiaries to remain adherent to their drug regimens, Coster added. That could reduce the number of hospitalizations and emergency room visits that are ultimately more costly to the Medicaid system than pharmacy reimbursement. The New England Healthcare Institute estimates that $290 billion dollars is wasted annually in inappropriate drug use.