By Mike Shields
KHI News Service
WASHINGTON, D.C., July 24 A Democratic congresswoman from Kansas and a Republican from Missouri have teamed on a plan that is getting high marks from small-town pharmacists worried they”ll be driven out of business by a new Medicaid reimbursement formula scheduled to begin in January.
2nd District Kansas Congresswoman Nancy Boyda has been joined by Missouri”s
8th District Congresswoman Jo Ann Emerson on the proposed legislation which would require that Medicaid reimburse pharmacists using a formula based on the retail costs of drugs instead of the wholesale cost.
According to a December 2006 report by the Government Accountability Office pharmacists would be paid 36 percent less than actual cost to purchase the Medicaid program”s 77 most expensive and most used drugs, if the new rule is implemented. That report showed the anticipated new formula is a recipe for bankruptcy, said pharmacists and their advocates as they lined up with the congresswomen for a morning press conference.
“Thank God, Congresswomen Boyda and Emerson are willing to stand up,” said Brian Caswell, a pharmacist from Baxter Springs.
The Republican and Democrat congresswomen each represent a district where constituents are disproportionately older and reliant on the services of small-town pharmacies. They and others said that in rural districts with no nearby hospital or clinic, pharmacists are often the first and sometimes the only health-care providers available.
In accordance with the Deficit Reduction Act of 2005, the federal Centers for Medicare and Medicaid Services (CMS) promulgated the final rule on its new wholesale reimbursement formula in July. Boyda, Emerson and more than 100 fellow members of Congress, including three others from Kansas, signed onto a protest letter to CMS. The agency agreed to postpone enforcement of the new rule until January.
“Why did this happen in the first place,” Boyda asked rhetorically. “This so-called savings comes straight out of the pockets of pharmacies, not by going to root of the problembut by going straight at the people dispensing and taking care of our rural communities. It”s remarkable that it could even be allowed to be part of the discussion.”
The Boyda-Emerson bill, which has 30 co-sponsors but has not yet been assigned a number, would nullify the new rule, replacing it with the congresswomen”s planned formula based on a pharmacist”s retail costs.
The Deficit Reduction Act prohibits changes that can”t otherwise be paid for. Boyda and Emerson said their bill would encourage use of generic drugs, thereby saving taxpayers money though exact sums weren”t yet calculated by the Congressional Budget Office.
Emerson and others said that the Medicaid program is behind the curve in the percentage of brand-name drugs it dispenses instead of considerably cheaper generic drugs.
“For every 1 percent (of prescriptions) you move into generics, it”s in the neighborhood of
$300 million that you save,” said Charles Sewell of the National Community Pharmacists Association. “Clearly, we should be seeing hundreds of millions in savings.”
Boyda said she thought it would be good political strategy to try to include the bill in the legislation reauthorizing the State Childrens Health Insurance Program. The SCHIP bill has been approved by the Senate Finance Committee and is being eyed by House Democrats as a vehicle for a number of health-care initiatives, though President Bush has threatened to veto that measure because it more richly funds the popular program than he has recommended.
Medicaid is the government health insurance program that covers the poor. Emerson said her 28-county district in southeast Missouri is one of the poorest in the country. Caswell said at his pharmacy about 50 percent of the business is from Medicaid beneficiaries. Baxter Springs is in southeast Kansas.
Congress has been seeking ways to control Medicaid prescription drug spending. According to GAO, the program”s total spending on outpatient prescription drugs grew from $4.6 billion in fiscal year 1990 to $40 billion in fiscal year 2004, accounting for almost 15 percent of total Medicaid costs.
– Mike Shields is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
mshields@khi.org
or at 785-233-5443, ext. 123.