CINCINNATI The new Medicaid pharmacy payment model has arrived, and pharmacy leaders fear its long-term impact could be a severe drop in profitability as the Centers for Medicare & Medicaid Services adopts a new reimbursement formula. In response, the National Association of Chain Drug Stores and other stakeholders have shifted many of their efforts to stave off the worst effects of the new regulations to the states.
Those efforts are showing results. Working through its state government affairs division, NACDS is helping to conduct "value of pharmacy" tours of local pharmacies for state legislators as part of a broad grass-roots campaign to spotlight the importance of the profession and the potential damage that could be wrought by the Deficit Reduction Act, and by the new Medicaid reimbursement regulations CMS adopted in response to the DRA.
One official spearheading those efforts is Dale Masten, NACDS regional government affairs manager for Ohio and the Southeast. Working with the Ohio Pharmacy Association, Masten and other pharmacy representatives invited state Rep. Lynn Wachtmann to tour two drug stores operated by Walgreen Co. and Meijer in Defiance, Ohio.
"At a briefing we were doing on the Deficit Reduction Act, I mentioned it to him and he was very interested … and we set it up," Masten recalls. "I think it was very beneficial. It makes a huge difference to see pharmacists delivering patients drug therapy management, or advising them at the counter on how to take their medications.
"There’s so much that a pharmacist does that a lot of times a general assembly member just doesn’t know about," he added. "It’s just a whole broad education for them on the impact the Deficit Reduction Act can have, on the role pharmacists can play, and on the technologies that are out there in the pharmacy."
As a result of the Wachtmann visit, Masten continued, "I think he has a much better understanding of what a pharmacist goes through, and that it’s not just counting pills."
Wachtmann is former chairman of the Senate Health Committee and is now vice chairman of the House Health Committee, so is influential in advancing a health policy agenda.
Wachtmann’s interest in pharmacy affairs—an interest promoted by his tours of Walgreens and Meijer—may make a big difference in the way the new Medicaid payment model plays out for Ohio pharmacies. In June, following his visit, the state legislature passed a bill to ease the impact of the Medicaid cuts to pharmacies when the new regulations take full effect next year. The governor quickly signed the bill into law as part of Ohio’s budget process.
"Rep. Wachtmann spoke out quite loudly on the ‘hold harmless’ legislation that was passed with the budget," said Masten. That legislation, he added, requires the state’s Medicaid program to study the effects of the Deficit Reduction Act within 30 days of the CMS rule implementation next Jan. 30.
Within 10 days of that study’s completion, Masten said, Medicaid in Ohio will be required to boost dispensing rates to offset the impact of the new federal payment guidelines for pharmacies, pending approval of the state’s reimbursement plan by CMS.
"It’s budget neutral, because whatever savings Medicaid incur as a result of these lower reimbursements, that amount is used to increase pharmacy funding," he said.
NACDS, Masten added, "worked very closely with the Ohio Pharmacists Association and the Ohio chain drug companies" to enlist the support of lawmakers. "It was a great coalition…in working with the [state] Medicaid [office] and helping to draft this legislation," said Masten.
"I’ve already talked to another state representative who’d like to do the same thing" by seeing pharmacies in action face-to-face, he added. "Clearly, Rep. Wachtmann … is educating his colleagues on the importance of pharmacy."
Pharmacy groups like NACDS and NCPA, along with state pharmacy associations, local pharmacy retail operators and other groups, are also finding some success in other states in convincing state lawmakers to help close the payment shortfall most pharmacy leaders anticipate once the new Medicaid payment regulations go into effect. "A glaring example is in North Carolina, where chains and independents mustered up 9 or 10,000 letters and e-mails that went to the North Carolina General Assembly, and that helped avert a 5 percent reimbursement reduction for Medicaid," said Masten. "So I think working closely with legislatures can really help."