Archives
Medicaid Update. Stay the Course.
Last December Congress passed the Deficit Reduction Act of 2005. The so-called DRA took a back seat to Medicare Part D all during 2006, but it’s terms and provisions have been very much on the mind of the Montana Pharmacy Association all year long.
The DRA makes major changes in the Medicaid program, which serves about 65,000 low income Montanans every month. Medicaid is also very important to Montana’s pharmacies. Over the years, Medicaid has emerged as the most responsible third party payer that Montana pharmacies do business with. Medicaid offers reasonable reimbursement, including an adequate dispensing fee to Montana pharmacies.
Passage of the DRA included changes in the Medicaid pharmacy program, including a transition from using AWP (Average Wholesale Price) as the benchmark, to using AMP (Average Manufacturer’s Price) as the benchmark; and a requirement that states re-calculate the dispensing fee paid by Medicaid. These changes were supposed to be effective January 1, 2007.
Understandably, these Medicaid program changes caused pharmacies a good deal of anxiety all during 2006, even as they were all trying to cope with the implementation of Part D.
The DRA was passed by Congress; but the job of providing the details on key aspects of the DRA—like how to define AMP-- was left to the Center for Medicare and Medicaid Services (CMS) and their rulemaking process. Until states are provided with precise guidance from CMS, the Medicaid pharmacy program in Montana will remain unchanged.
Roger Citron, R.Ph. is the Pharmacy Program Manager at DPHHS Medicaid. He had this to say on November 8th: “Until CMS drafts their rules (which in itself is a drawn out process-with public comment and all) we are neither sure what AMP will be, nor what course of action will be needed on our part. Once we have determined what changes we must make, we will post provider notices accordingly. Finally, no decisions have been made regarding our dispensing fee.
We are still trying to get our hands around AMP and continue to regression test the data provided, but since CMS has not promulgated rules to define how and what manufacturers are to calculate and report, we have not determined a course of action. I understand First Data Bank will continue to report AWP in the short term, so we will continue with our current pricing methodology. Until we get good, concrete information from CMS, we cannot speculate on any changes that may be required on our part. Providers can be assured we are aware of the DRA and AMP and are doing everything possible to evaluate what impact those changes may have upon our provider network and access to services for our clients.”