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Executive Summary

TWO MORE HCFA REGIONAL OFFICES INITIATE PLANS TO ELIMINATE pharmacies' "earned discounts" through new Medicaid reimbursement policies which are not based on average whsle. prices for Rx drugs, NARD reports in an assn. "bulletin" that is being circulated to members of Congress and their staffs. The latest regional offices to consider the new reimbursement approach are in Atlanta (Region IV) and Chicago (V), NARD has informed Congress. Following the Senate Appropriations Cmte.'s concern over HCFA's "campaign to eliminate the earned discounts", NARD notes in its bulletin that Region VI (Dallas) had notified its states that its new reimbursement policy had been postponed from July 1 to at least Oct. 1. The status of reimbursement changes planned for Aug. 1 in Region VIII (Denver) was "unclear," NARD added. Regions IV and V, in their letters to states following the Senate cmte.'s expression of concern, did not mention specific dates for cutting off Medicaid funds if new reimbursement policies are not implemented, NARD notes. But Region IV told its states to submit a plan by July 8 "to eliminate the earned discounts," NARD Director of Govt. Affairs John Rector said. Region V, he added, scheduled a meeting in Chicago for July 18-19 "to threaten action if the earned discounts are not eliminated." Region V, NARD said, "characterized its goal to be a total restructuring of the Medicaid Prescription Drug Program." NARD is also distributing 23 questions-and-answers concerning "Medicaid-Pharmacists' Earned Discounts." The questions, according to NARD, are those most frequently asked by members of Congress or their staffs, representatives of governors of "impacted states" in Regions IV, V, VI and VII, state Medicaid officials, "and others interested in assuring that a fair solution be reached in lieu of the wholesale elimination of the discounts earned by pharmacists in the Medicaid program." The first Q-&-A concerns NARD's definition of the discounts earned by the pharmacists: "The discounts are earned by pharmacists when they employ a variety of prudent business practices. Typically, when bills are paid in advance, or on delivery, or within a specified period such as 7 or 15 days, a discount is earned by the pharmacist. Discounts are also earned on the basis of the volume purchased from a whslr., through the use of order entry devices, or when payment is made in cash. These discounts should not be considered as lowering the acquisition cost to the retail pharmacist, but rather as incentives for more efficient purchasing. It is of note that the discounts are not based on the Medicaid purchases, but on the entire relationship with the whslr. which includes: all prescription drugs, all over-the-counter drugs, and health/beauty/sundry purchases . . ."

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