Pharmacy associations praise New York Medicaid victory

WASHINGTON — The New York State legislature recently wrapped up its 2015 budget negotiations with a favorable outcome for community pharmacy: It rejected an executive branch proposal to change how New York’s Medicaid program reimburses pharmacies for prescription medications.

If enacted, the proposal would have cut payments to pharmacies by $82 million annually, according to estimates, by setting the price for drugs based on a three-month rolling average acquisition cost.

Following news of the victory, state pharmacy associations released a statement praising Governor Andrew Cuomo and the state legislature for keeping Medicaid pharmacy reimbursement at the present level.

“We appreciate the rejection of another deep cut to pharmacies in the final state budget,” said Charles Catalano, president-elect of the Pharmacists Society of the State of New York. “Every pharmacy sector in the state was united, and our collective voice was heard. Through this action the Governor and State Legislature have preserved patient access to essential pharmacy care in New York.”

After years of decreases, another pharmacy cut had been looming. Throughout 2012, the NYS Health Department conducted cost surveys and, on the basis of its statistical analyses, proposed a new below-cost reimbursement level. Pharmacy associations expressed strong concerns that the Department’s analyses of the cost data were highly flawed, excluding real pharmacy expenses and factoring in costs from large, out-of-state, mail-order operations, the associations said. In mid-March, the associations supported this claim with a report prepared by Josef Schmee, an independent statistician from Union University, that was reviewed and endorsed by faculty members from St. John Fisher College of Pharmacy and St. John’s University.

In a follow up, the National Association of Chain Drugs, who worked collaboratively with its state partners in New York on advocacy efforts, spoke with Mike Duteau, VP of business development and strategic relations for Kinney Drugs and president of the Chain Pharmacy Association of New York, about the victory and his role as a media spokesperson on the collaborative effort.

“Had this severely flawed Medicaid reimbursement model been implemented, the impact on pharmacy and our patients would have been catastrophic. Reimbursing pharmacies substantially below cost for prescriptions is not a sustainable business model. This could have resulted in greatly decreased patient access, loss of jobs for pharmacy employees and even pharmacy closures. As healthcare providers, we have an obligation to protect those patients we care for and the communities we serve,” Duteau told NACDS.

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