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MEDICAID Rx DRUG REIMBURSEMENT POLICY CHANGES SHOULD NOT DISQUALIFY STATES'

Executive Summary

MEDICAID Rx DRUG REIMBURSEMENT POLICY CHANGES SHOULD NOT DISQUALIFY STATES' claims when federally set deadlines for instituting the changes are not met by the states, according to the Senate Appropriations Cmte. In report language included in a fiscal 1985 supplemental appropriations bill, passed by the cmte. on June 13, the Senate panel said: "While the cmte. is pleased that HCFA [the Health Care Financing Administration] is acting to reduce Medicaid expenditures through this initiative, it is concerned that some states may not be able to comply with deadlines established by HCFA for implementing changes in the methodology for calculating drug acquisition costs." The report language, which does not carry the authority of legislative language (appropriations bills generally do not include legislation), was offered by Sens. Bumpers (D-Ark.) and Johnston (D-La.). The Democrats represent two states whose Medicaid agencies reimburse Rx drug costs to pharmacies based on published average whsle. prices. HCFA's regional offices have been urging such states to base reimbursement formulas on estimates that more accurately represent pharmacies' actual acquisition costs (see related story, p. 4). Pharmacy organizations have been lobbying Capitol Hill since last November, maintaining that if pharmacists are reimbursed at rates lower than average whsle. prices, many will be forced to withdraw from participation in the Medicaid program. The supplemental appropriations bill states: "The cmte. is concerned that changes in Rx drug reimbursement policy not adversely affect Medicaid beneficiaries." If a HCFA Region VI state, such as Arkansas, notifies HCFA "of an inability to comply with the July 1, 1985 deadline, and the state implementing the new methodology for calculating drug acquisition costs as of a date mutually agreed upon before the end of the fiscal year, HCFA will not act to disallow or defer Medicaid drug claims prior to that date," the report states. "It is the cmte.'s further understanding that HCFA will work with the states so that they may specifically recognize the acquisition costs of small, independent pharmacies, rural pharmacies, and those with high Medicaid volume." The cmte. report also said that "Louisiana state laws at this time may preclude implementation of conforming changes," and the cmte. "expects that (1) HCFA will not disallow valid drug claims prior to Oct. 1, 1985 in that state; and (2) pending such conforming changes in state regulations, the state will be allowed to make a full showing as to the validity of its claims."
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