Pharmacists can help reduce 
Medicaid costs

BY B. Douglas Hoey, RPh, MBA

As states grapple with tight budgets, rising Medicaid costs and the anticipated expansion of Medicaid following the Supreme Court’s decision to uphold the Patient Protection and Affordable Care Act, policy-makers should consider how community pharmacists can help reduce expenses. In addition, new evidence offers a fresh reminder of the perils of managed care in Medicaid and the need for proper oversight of managed care entities.

Recently, Bloomberg government released a study of managed care plans in the nation’s five most populous states. It found the plans are delivering substandard care, characterized as “significantly and consistently worse than the national median.” It added that lower-quality care can lead to higher health spending through more costly medical interventions.

This comes on top of earlier questions about Medicaid managed care. The New York Times has drawn national attention to the diminished pharmacy access of Texas patients after a new managed care plan slashed pharmacy reimbursements by some 80%, forcing some pharmacies to close in the Rio Grande Valley. Separately, the state of Connecticut banished private insurance companies from its Medicaid program, citing “a diminishing confidence in the value of what they are providing.” In the Sunshine State, an examination by Georgetown University’s Health Policy Institute of Florida’s managed care pilot program found “no clear evidence that the pilot programs are saving money, and if they are, whether it is through efficiencies or at the expense of needed care.”

Alternatively, community pharmacists can help reduce Medicaid costs in a number of ways:

  • Drive greater use of low-cost generic drugs. Community pharmacies are already leading the way to maximize the appropriate use of generic medications — the most effective means to lower prescription drug costs without harming patients. Medicaid could save more than $600 million for every 1% increase in generic use. The Massachusetts fee-for-service Medicaid program has the highest generic dispensing rate in the nation, at 79.3%. If all other states achieved that rate, the Medicaid program could save $5.14 billion. States may forfeit savings from generic drugs if they rely on mail-order pharmacies owned by pharmacy benefit managers, commonly a part of managed care. PBM-owned mail pharmacies dispense generics 10% less often than local pharmacies, partly because they receive large manufacturer rebates for dispensing brand-name drugs.

Incorporate medication therapy management. Pharmacists provide one-on-one attention and prescription counseling to Medicaid beneficiaries with often-complicated health conditions and medication regimens. One percent of all beneficiaries account for 25% of expenditures. Expanding the use of low-cost MTM programs can help make a much greater dent in the $290 billion annual cost to the health system of poor medication adherence. Plus, community pharmacies afford patients access to low-cost immunizations and health screenings, in addition to receiving their prescriptions.

A state utilizing or implementing managed care into Medicaid should, at minimum, adopt some common-sense steps:

  • Transparency. Properly implementing aggressive transparency measures into contracts will result in savings that stay in the state, not funneled to an out-of-state corporation.

Patient choice and pharmacy competition. Allow all community pharmacies eligible to participate in federal health plans to participate in a state plan’s pharmacy network provided that the plan’s costs will be comparable or the same. This also assures that patients have choice and more taxpayer dollars remain in-state at local businesses.

Ensure fair compensation. While reducing costs, reimbursement must be fair and reflective of all aspects of providing prescriptions to Medicaid patients so that community pharmacies can continue to participate in the program. This should include accounting for Medicaid patients unable to afford their co-pay. In rural communities in particular, an independent pharmacy may be the only one for miles around, and loss of access can be devastating to patients.

Community pharmacists are committed to being part of the solution to reduce Medicaid costs. Managed care programs will not deliver the promised savings unless proper oversight is conducted and patient access to quality care is maintained.

B. Douglas Hoey is CEO of the National Community Pharmacists Association.


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Anna90 says:
Aug-30-2012 01:27 am

Medicaid costs are expensive enough today, lots of people get worry about their finances where there comes time to buy medicines. Reducing costs will can help make medicines more affordable, and that's very good because people usually spend lots of money on medicines and even apply for additional cash to buy some products. Pharmacy competition also plays an important role. All the pahrmatices want attract more consumers and successfully sale their products, but reducing costs can make the competition much stronger.



AMP progress validates pharmacy’s resolve

BY Steve Anderson

They say hindsight is 20/20. With the Supreme Court’s ruling on healthcare reform, the luxury of looking back shows that the National Association of Chain Drug Stores and allies took the right course to battle the pharmacy Medicaid cuts of the Deficit Reduction Act. What we learned should inspire pharmacy to remain tenacious in its continued advocacy on this issue and in confronting all other challenges.

No stone was left unturned as NACDS, the National Community Pharmacists Association and others waged an all-branches-and-all-levels-of-government strategy to attack the pharmacy cuts in the DRA that resulted from the average manufacturer price model. That is a good thing, as the cuts would have jeopardized access to pharmacy patient care, resulting in poorer health and increased long-term health costs.

No one could have predicted the complex twists that the battle over the AMP cuts would take after passage in 2006 of the DRA. The fact that a new approach to Medicaid pharmacy reimbursement would be included in a new healthcare-reform law — a law that itself would be the subject of a most unconventional and unexpected Supreme Court ruling — seems to fit the life story of this issue.

AMP’s path involved legal action, due to a lawsuit filed by NACDS and NCPA. It involved action by true friends of pharmacy in Congress who legislated a delay in the cuts. It also involved the use of research, public relations, grassroots mobilization, collaboration with patient advocacy groups, coordination with state government affairs and more.

All of these aspects of the fight led up to the crescendo that we knew all along would be necessary to address the AMP cuts: a change in the law itself. Community pharmacy achieved several improvements to the approach to Medicaid pharmacy reimbursement in one part of the much, much larger healthcare-reform law.

It is imperative that community pharmacy never forget the lesson of what, to this point, has been a six-year battle. Pharmacy worked in united fashion with a sound strategy. It found its voice in communicating the value of pharmacy to external audiences, instead of just preaching to the choir. It did not back down and stood its ground at every pivotal point. It was not deterred by an analysis of the odds, and it was motivated by a passion for patient care that could not be dampened.

However, our effort is far from complete. The implementation phase of the healthcare law will require a great deal of continued engagement by NACDS and its allies. That certainly is true of the executive branch’s implementation of the new AMP provisions. The great AMP debate is not yet over, nor is the larger effort to secure community pharmacy’s rightful place in an approach to healthcare delivery that offers the most promise for patients nationwide.

But when it comes to moving forward, at least pharmacy can find an example of success by looking back at all it already achieved in fighting the AMP cuts and securing much-needed victories for patient care.

Steve Anderson is president and CEO of the National Association of Chain Drug Stores.


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RCEC 2012 upbeat as retail clinics reach tipping point


Call it the Year of the Retail Clinic. 

As the Drug Store News Group and its partners at the Convenient Care Association played host to several hundred in-store based providers in Orlando, Fla., in late July for the fifth annual Retail Clinician Education Congress, several signs began to emerge that the retail clinic model had reached a critical tipping point. Not the least of which is that for the third year in a row, the U.S. Senate had resolved to name the week of Aug. 6 National Convenient Care Week.

“The U.S. Senate’s resolution recognizes the tremendous value of the convenient care option,” CCA executive director Tine 
Hansen-Turton told RCEC attendees. 

DSN has long believed that the practitioners working in America’s retail clinics are on the front lines of a major revolution in health care,” DSN editor in chief Rob Eder told RCEC attendees during his July 30 opening remarks. “The Senate’s resolution and its call on the states to champion the unilateral expansion of retail clinics is an important indication that people in Washington understand and appreciate the role retail clinics can and should play in the future of health care.”

But even before the Senate’s resolution, clinic leaders agreed that in recent months support had been growing for the retail clinic model, beginning with an article published in the May 23 issue of the Journal of the American Medical Association, “Retail Clinics and Drugstore Medicine,” written by a Philadelphia-based physician who came out squarely in support of the model.

The JAMA article was followed soon after by the Supreme Court’s ruling on the Patient Protection and Affordable Care Act in late June, which led to a series of high-profile news articles, including a July 29 story that appeared on page 1 of the Sunday New York Times, “Dr. Shortage to worsen under health reform.” A story that appeared the next day on page 1 of the Los Angeles Times was perhaps a bit more to the point: “Retail clinics grow with healthcare act.”

By Aug. 1, with RCEC 2012 in full swing, the Massachusetts state legislature voted to pass an important healthcare cost containment bill, which was signed into law a week later by Gov. Deval Patrick. Among other important measures designed to save the state $200 billion in healthcare costs over the next 15 years, the new law expands the services of retail clinics in Massachusetts to the full scope of practice for a nurse practitioner, including diagnosis/treatment, management and monitoring of acute and chronic disease, and wellness and preventive services.

Just as Massachusetts has proven to a be model for health reform, it is believed that the state’s response to better manage health costs will likely become a model for other states, vastly expanding the scope of services for retail clinics all across the country. Meanwhile, it is projected that retail clinics will more or less double in number by 2015, according to estimates from Merchant Medicine.

Against this backdrop, the mood was decidedly upbeat among attendees at RCEC 2012. The event featured 15 hours of live continuing education dually accredited for both nurse practitioners and physician assistants, and the presentation of the fifth annual Retail Clinician CARE Awards, which honor the nurse practitioners, physician assistants and pharmacists whose special actions have come to define excellence in retail-based patient care. For the second year in a row, the event also included a special Collaborative Care track of education — six hours accredited for NPs, PAs and pharmacists.

Highlights from the event, along with profiles of this year’s CARE Award winners — and Lifetime Achievement Award winner Shirley Chater, PhD, RN, FAAN, former commissioner of the U.S. Social Security Administration and chair of the Robert Wood Johnson Foundation Executive Nurse Fellows Program’s national advisory committee — will appear in the September/October edition of DSN Collaborative Care.


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