THERE ARE MORE than 23,000 independent pharmacies, and 75,000 pharmacists in the United States. In 2006, after five years of stability, 1,152 pharmacies, about 5 percent of the nation’s pharmacies, closed. The only major change in the system was the addition of Medicare Part D.
Several bills designed to help community pharmacies with Part D provisions are up for discussion before the Legislature. Groups such as the National Rural Health Association, National Community Pharmacist Association and National Federation of Independent Business are backing these bills.
The legislation would accelerate reimbursement to pharmacies for Medicare Part D claims, eliminate pending cuts by Medicaid in reimbursement for dispensing generic prescription drugs, and would help pharmacies effectively bargain with pharmacy benefit managers who administer prescription drug plans.
“There is a heightened sense of urgency when it comes to the bills designed to fix the problem of slow payment with Medicare and low payment with Medicaid,” said Paul David Moore, president-elect of the NRHA. “The 2006 launch of the Part D program coincided with the closure of 5 percent of community pharmacies. The launch of the changes in Medicaid in 2008 could cause an even greater drop in the number of community pharmacies. This unfortunate development for rural Americans can be brought to a screeching halt, but Congress must act before they adjourn this year.”
Two bills, The Fair and Speedy Treatment of Medicare Prescription Drug Act of 2007 (HR 1474) and The Pharmacy Access Improvement Act (SB 1954), require that electronically submitted Part D claims be paid by Medicare within 14 days by electronic funds transfer. The bills require that paper claims be paid within 30 days.
A study by the University of Texas on 2 million claims found that 50 percent of reimbursements were returned more than 30 days after filing and 17 percent were returned by 60 days.
The House and Senate are also considering bills that would address the Centers for Medicare and Medicaid Services.
The Saving Our Community Pharmacies Act (HR 3140) establishes what its sponsors call a new and fair pharmacy reimbursement benchmark reflective of actual retail costs and includes provisions to drive generic drug use that increase taxpayer savings. While the Fair Medicaid Drug Payment Act of 2007 (S. 1951) is focused on improving the average manufacturers price (AMP) formula criteria for determining the averages and raises the maximum amount of potential reimbursement.
Charlie Sewell, senior vice president for government affairs of the NCPA, said pharmacies are being reimbursed at 36 percent below generic prices, a factor that could put 10,000-12,000 more out of business. Some combination of the two bills is needed to ward off more damage, he said.
Companion bills in the House and the Senate, jointly called the Community Pharmacy Fairness Act of 2007 (HR 971 and SB 2161), create a narrow exemption to current antitrust law that allows community pharmacies to negotiate as a group. Pharmacy groups contend that large, publicly held pharmacy chains already have this type of bargaining advantage.
“The small independent community pharmacies need better leverage, something that the larger chains already enjoy,” Sewell said.
The National Federation of Independent Business (NFIB) is also getting in on the action by pushing for H.R. 1474 to be included in the Medicare package, being considered before Congress adjourns this year.
“We understand that many issues affecting Medicare are being discussed as Congress completes its work for 2007. The FAST Act will provide the certainty necessary for all America’s small and independent pharmacists to meet their business obligations – and the needs of the communities who depend on their services,” said Dan Danner, NFIB executive vice president for public policy.
“We are turning up the heat on Congress,” Sewell said. “We hope to light enough of a fire to get them to do something.”