Illinois negotiating pharmacy for reimbursement changes
Faced with protests, the Illinois Department of Public Aid has backed away from its plan to implement an emergency rule in November that would change the Medicaid reimbursement formula for pharmacy and reduce dispensing fees.
The protest came from the American Society of Consultant Pharmacists (ASCP), which said cuts would be devastating to seniors seeking medication and that the new rule was created with no input from the state’s pharmacists. The rule was to go into effect Nov. 27.
"We’re talking with the industry to discuss what was proposed, working toward a compromise plan. We can’t talk about what the final result is likely to be and can only say that we hope to resolve it as soon as possible," Matt Powers, agency administrator for medical programs, tells State Health Watch.
According to an ASCP action alert to its members, the proposed changes included:
• reimbursing brand name drugs at wholesale acquisition cost plus 8% plus a $3 dispensing fee;
• reimbursing generic drugs with a $3.58 dispensing fee and the lowest of either federal upper limit, state maximum allowable cost, average wholesale price minus 12%, or wholesale acquisition cost plus 12%;
• reimbursing over-the-counter items at 125% of average wholesale price.
Mr. Powers says the agency is talking with industry officials about using something other than the average wholesale price. It also is discussing instituting a dispensing fee from the current flat and floating fee that is correlated to the cost of drugs and is seen as inconsistent in its application.
While the agency’s goal, according to Mr. Powers, is to "see the prescription drug appropriation line behave not as aggressively as it has been," the agency also wants to achieve consistency with other major payers in Illinois, including state government and with commercial contracts.
ASCP officials say the department expected to save $15 million in the remaining six months of fiscal year 2001 under the changes, plus $30 million in fiscal year 2002 with the change in dispensing fee. During that same period, the association told its members, the agency expected to save another $40 million with the change in reimbursement formula.
"Public Aid hinges [its] argument to implement these changes on the fact that drug expenditures continue to escalate. However, this is contrary to recent studies showing that this is not due to dispensing fees to pharmacists, but because of increased utilization of medications, greater numbers of covered individuals, and increases in drug product prices," according to the alert.
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