To:   IPA NJ Members         From:         John Covello                          June 11, 2008

 

 

       ACT NOW TO GET CONGRESS TO PASS PART D PROMPT PAY AND

       MEDICAID AMP DELAY LEGISLATION!!!!!!

 

After all the efforts to finally get Congress’ attention that pharmacies are getting beat up with “low and slow” payments from Medicare Part D PDP’s and the devastation that Medicaid AMP would impose on independent pharmacy, the time for action is NOW! 

Senate Finance Committee Chairman Max Baucus introduced a health care legislation,       S. 3101, that includes provisions requiring prompt payment to pharmacies in Medicare Part D and a delay in the implementation of the disastrous Average Manufacturer Price (AMP) reimbursement in Medicaid. This is an opportunity to get relief for pharmacy from Congress. 

But for this to happen, we need EVERY community pharmacist to call and e-mail their Senators TODAY and urge them to support S. 3101.  There will be several votes on this bill starting tomorrow.   

Call your U.S. Senators at the following numbers and tell their staff member who answers the phone that you are a community pharmacy owner in New Jersey and in order to keep serving your patients, urge the Senator to vote FOR S-3101.  

Senator Frank Lautenberg  (D-NJ)  (202) 224-3224

Senator Robert Menendez  (D-NJ)  (202) 224-4744

 

You can also ask their support for S-3101 by email through NCPA’s website http://capwiz.com/ncpanet/issues/alert/?alertid=11475281&PROCESS=Take+Action

  

Take action NOW to protect community pharmacy.  Contact your Senators today to vote FOR S-3101!!

 

If you have any questions, please call John Covello at IPA at 800-575-2667.

 

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To:   IPA NY Members         From:         John Covello                          June 11, 2008

 

 

           ACT NOW TO GET CONGRESS TO PASS PART D PROMPT PAY AND

MEDICAID AMP DELAY LEGISLATION!!!!!!!!!!!!!

  

After all the efforts by IPA working with NCPA to finally get Congress’ attention that pharmacies are getting beat up with “low and slow” payments from Medicare Part D PDP’s and the devastation that Medicaid AMP would impose on independent pharmacy, the time for action is NOW!

 Senate Finance Committee Chairman Max Baucus introduced health care legislation, S. 3101, that includes provisions requiring Medicare Part D prompt payment to pharmacies and a delay in the implementation of the disastrous Average Manufacturer Price (AMP) reimbursement in Medicaid. This is an opportunity to get relief for pharmacy from Congress!!! 

But for this to happen, we need EVERY New York independent pharmacy to contact their Senators TODAY and urge them to support S. 3101!!  There will be several votes on this bill starting tomorrow.   

Call your U.S. Senators at the following numbers and tell their staff member who answers the phone that you are a community pharmacy owner in New York and, in order to keep serving your patients, urge the Senator to vote FOR S. 3101.

 

Senator Charles Schumer (D-NY)             (202) 224-6542

Senator Hillary Rodham Clinton (D-NY)          (202) 224-4451

 

You can also ask their support for S-3101 by email through NCPA’s website: http://capwiz.com/ncpanet/issues/alert/?alertid=11475281&PROCESS=Take+Action

 Take action NOW to protect community pharmacy.  Contact your Senators TODAY to vote FOR S. 3101!!

     If you have any questions, please contact John Covello at IPA at 800-575-2667 or jcovello@ipagroup.org.

 

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To:  IPA Members           From:  John Covello                                        January 28, 2008

 

1.  AMP Lawsuit against CMS filed by NCPA and NACDS

We reported that on December 19^th retail pharmacy was successful in getting a Federal District Court to impose a temporary injunction

 stopping CMS from imposing devastating AMP reimbursement for Medicaid generic prescriptions on January 31^st.  The order stated that the

 rule would cause “irreparable harm” to community pharmacies and that NCPA and NACDS were likely to succeed on the merits because the

 AMP final rule definitions of “Average Manufacturer’s Price” and “Multisource Drugs” violated the DRA law.

 

The injunction prevents CMS from: 1) using the price data to change Medicaid generic reimbursements; 2) posting or publicly releasing the

 generic manufacturers’ price data; and 3) sharing this data with the state Medicaid programs.  The court ruling does allow CMS to continue to

 collect the monthly generic drug price data from the manufacturers.

CMS did not appeal the order’s rulings but only filed a “simple answer” in response.  As of now, NPCA expects another court date in late

 February / early March.

 

While our legal victory puts AMP on hold for the next few months, IPA will continue to work with NCPA to seek a legislative solution to AMP. 

 We’ll keep you informed of further AMP developments.

 

2.  AWP Lawsuit against First Data / Medi-Span

As you may know, community pharmacy was also facing a catastrophic rollback in AWP to satisfy a proposed settlement of AWP fraud

 through First Data Bank (FDB) and Medi-Span.  This settlement would also eliminate AWP pricing as a method of reimbursement.

 

Given that this 5% rollback would put the entire burden on pharmacy - and not FDB or Medi-Span - I attended the January 22^nd court hearing

 on the proposed settlement.  NCPA (not involved in this lawsuit) filed a legal objection to this settlement stating it would be devastating to the

 average independent pharmacy.

 

The great news this week was that U.S. District Court Judge Patti B. Saris rejected the proposed settlement’s AWP roll back and phase out

 primarily because it doesn’t help consumers and would unfairly place all the costs on independent pharmacies!!  Aside from not wanting to

 have the court referee drug price reimbursements, Judge Saris focused on how the settlement could hurt independent pharmacies when the

 lawsuit “is not about them.”

 

Judge Saris asked the parties to “go back to the drawing board”.  She wants a new settlement that does not have the court determine the

 price, and wants an independent expert to determine the damages based on a review of the stores acquisition data for a more limited

 number of brand drugs (about 1400).  This case will proceed over the next few months and may either produce a new settlement fairer to

 independent pharmacy or even go to a full trial that could include McKesson.

 

IPA will work with NCPA and other independent pharmacy network groups to recommend experts to review price data.  We believe this is

 necessary to combat the notion that independent pharmacies “benefited” from inflated AWP brand drug price listings.  We’ll keep you

 informed of any new developments in this case.

 

The bottom line is that AWP’s won’t be eliminated for now for both brand and generic drug price reimbursement calculations.

 

 

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TO:  IPA Members         FROM:         John Covello                    December 14, 2007

 

BREAKING NEWS 

FEDERAL COURT ISSUES A PRELIMINARY TEMPORARY INJUNCTION AGAINST CMS MOVING FORWARD WITH USE OF MEDICAID GENERIC AMP

 

This afternoon U.S. District Court Judge Royce C. Lamberth gave independent pharmacies some good news on when it comes to the pending catastrophic cuts in Medicaid generic drug reimbursements.  Judge Lamberth GRANTED NCPA & NACDS AN INJUNCTION TO TEMPORARILY STOP CMS FROM MOVING FORWARD ON POSTING OR USING THE CURRENT AMP FORMULA!

While the details of the order and schedule for a hearing date will not be available until Wednesday, December 19^th, this action does offer some success in getting the ill-devised AMP formula halted and is the first step forward towards forcing CMS to go back and develop a new, fairer AMP reimbursement formula.

We will provide further information on this development as it becomes available.

 

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To:  IPA Members                             From:  John Covello                       December 2007

 OVERVIEW

The second year of the Corzine Administration comes to an end without the drama of a government shutdown or the focus on a single issue (property taxes) and since the entire Legislature was up for election, all action was politically driven.  In the end, the Democrats retained control of the Legislature, increasing their State Senate majority by one seat (23-17) for the next four years, while the Assembly Democratic majority shrank by 1 seat (48-32) for the next two years.  That means the Democrats remain in total control of NJ state government and the policy agenda for at least another two years. 

When it came to independent pharmacy issues, we continued to work diligently to overturn challenging budget cut proposals, plans that would have impose mandatory mail order requirements, while also lobbying effectively to protect independent pharmacy’s interest in other important legislative and regulatory areas. 

This work will continue with the start of a new Legislature in January and we will have to educate many regarding independent pharmacy issues since there will be 25 new members of the Assembly and 15 new Senators (including four whom did not previously serve in the Assembly). 

But, undoubtedly the biggest challenges - as much of our effort was in 2007 - will be focused on Congressional and Federal actions that have the most dramatic impact on the future of NJ’s independent pharmacies.  The work and challenges in 2008 will be even greater for IPA and its members to protect the community pharmacies’ and their patients’ public policy interests.  

  FEDERAL ISSUES

§  AMP Fix Bill (H.R. 3140 & S. 1951/H.R. 3700):  2007 saw IPA intensify its role in Federal pharmacy care issues.  Working with NCPA, IPA helped lobby key Congressional members to legislatively fix the impending disastrous cuts in Medicaid generic drug reimbursement (a GAO study estimated an average of 36% below acquisition cost) from CMS’s final AMP rule.  In September, IPA joined NCPA and other pharmacy group representatives by holding a press conference at Zajac’s Pharmacy in New Brunswick to urge New Jersey Rep. Frank Pallone, Chair of the House Health Subcommittee, to move bills in his subcommittee to fix the flawed CMS AMP formula.

§  Part D Prompt Payment Bill (S. 1954/H.R. 1474):  We’ve also joined with NCPA to push for congressional action on bills to force prompt and accurate payment to independent pharmacies from Part D prescription drug program plans, ending the PBMs’ excessive profiteering from their advanced Part D payments at the taxpayers’ expense. 

§  Independent Pharmacy Collective Negotiation Bill (H.R. 971):  And, most recently, we’ve sounded the alarm and are providing important business practices expertise to help fix the amended version of a house bill (H.R. 971, “The Community Pharmacy Fairness Act”) that was originally designed to allow independent pharmacies to legally negotiate collectively contract terms with PBM’s. The amended version of this bill that came out of the House Judiciary Committee puts severe limitations on that ability.  We will continue working with NCPA to get this bill back on the right track in 2008.

 

  NJ STATE ISSUES                                                                                                  Page 2 of 2 

§  NJ State Budget 

Despite Governor Corzine’s budget proposal to impose disproportionate cuts on pharmacy care, IPA and other retail pharmacy groups were successful in minimizing these cuts.  The Coalition succeeded in:

·         Defeating the $2 Medicaid co-pay ($7 million cut) for the 6th straight year!

·         Preserving the Medicaid/PAAD/Senior Gold brand drug reimbursement rate (AWP-12.5%)

·         Clarifying that generic reimbursement rates remained unchanged (AWP-12.5%) until CMS requires New Jersey to use AMP-based generic drug reimbursement pricing. 

The advent of AMP and a possible cut in brand pricing from the proposed First DataBank settlement in 2008 helped IPA, working with other retail pharmacy groups, make strides to gain the Administration’s and Legislature’s attention to the need for fairer pharmacy services fees in order to preserve patients’ access to pharmacy care.  We continue to fight for a mid-budget language adjustment to our generic drug fees once AMP is in effect.  Also we are preparing to address an overall fee adjustment in the next state budget. 

§  State Health Benefits Plan (SHBP) Rx Mandatory Mail Order 

IPA and the Coalition, working aggressively with the public employee unions, prevented any legislative or administrative action to mandate the SHBP’s use of mandatory mail order for prescription drugs coverage.  Plus the unions ensured (despite agreeing to greater co-payment differentials favoring mail order use) that the new state employee contract does not mandate public employees to use mail order for their maintenance prescriptions. 

§  NJ Medicaid Pharmacy Providers Moratorium Exemptions

IPA and the Coalition worked to get New Jersey’s Department of Human Services to adopt regulations for exemptions to the Medicaid pharmacy provider moratorium to ensure that the moratorium does not apply to the change in ownership or location of an existing pharmacy.  We also had DMAHS clarify that stores can keep their existing Medicaid number when selling their store to an existing partner or other corporate officers so long as the store does not change its IRS tax ID or NJBOP store license number. 

 §  CDS Rx Monitoring Legislation

 IPA and the Coalition continued working with Senator Rice to modify his legislation (S-1604) requiring pharmacies to submit sales data electronically of controlled substances prescriptions to the Division of Consumer Affairs to ensure that compliance does not pose an undue burden on pharmacies.  This bill requires the state to develop and maintain this database and does not require the reporting of sales information on Schedule V drugs.  Passage of this bill into law to make New Jersey compliant with a federal prescription electronic report program mandate should occur either in late 2007 or early 2008. 

§  Pharmacy Technician Registration Regulations 

Effective March 2, 2008, as part of the final regulations, the NJ Board of Pharmacy (BOP) adopted new registration and certification requirements for Pharmacy Technicians (PT) when the pharmacist / technicians ratio exceeds 1:2.   The BOP, based on IPA’s comments, did clarify the rules to allow PT’s to inform patients about the transfer of prescription between pharmacies while requiring a pharmacist to answer any other questions a patient would have about that prescription.    

§  NJ Drug Price Registry List Website 

IPA and other retail pharmacy groups worked with the NJ Division of Consumer Affairs (DCA) on the first step toward implementing of New Jersey’s Prescription Drug Retail Price Registry Law, which includes, as required by law, pharmacies’ usual and customary (U&C) prices reported to NJ Medicaid for Medicaid, PAAD and NJ Senior Gold claims for the 150 most used prescriptions.  In the rulemaking process, IPA is urging DCA to ensure that the website clarifies that Part D and private plan drug payment contract rates apply to any subscribers contract mandated out-of-pocket purchases.

 

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To:  IPA Members                             From:  John Covello                                      November 2007

 

 

AMP FEDERAL LAWSUIT FILED  On November 7^th, NCPA and the National Association of Chain Drug Stores (NACDS) jointly filed a lawsuit in federal court against CMS and the U.S. Health and Human Services Department challenging the implementation of the final rule to use AMP for Medicaid generic drug reimbursements.  The lawsuit contends that CMS did not properly adopt the regulation consistent with the congressional language creating AMP and that the AMP violates the Social Security Act provisions creating the Medicaid prescription program. 

Additionally, on November 15^th, NCPA and NACDS filed a motion for an immediate injunction to stop CMS from posting any pricing data compiled from the generic manufacturers after the November 30^th reporting deadline.  We will update you on any action on this very important litigation. 

Meanwhile, IPA continues to work closely with NCPA to pursue a legislative fix to AMP, including joining in meetings with House Health Subcommittee Chair Rep. Frank Pallone staff to push for the AMP fix bill. 

PHARMACY TECHNICIAN RULES FINALIZED

 On September 4^th, the NJ Board of Pharmacy adopted regulations expanding its regulation of pharmacy technicians to have a new registration and certification requirement for these individuals. The rule establishes education & language requirements for technicians, requires the display of technician’s registration and requires training and supervision for technicians under the ratio of 1 Pharmacist for every 2 Technicians.  The new regulations also establish a registration fee and renewal fee for technician’s certification. 

Based on IPA’s comments, the BOP did clarify that the rules will allow pharmacy technicians to inform patients about the transfer of prescription between pharmacies, but it still requires a pharmacist to answer any other questions a patient would have about that prescription.  Pharmacy Technicians have until March 2, 2008 to register with the BOP.   

 

PHARMACIST DUTY TO FILL LAW SIGNED

  On November 2^nd, Governor Corzine signed into law a bill (S-1195 / A-992) that requires pharmacies to have a duty to fill prescriptions for in-stock drugs even if it is against a pharmacist’s moral, philosophical or religious beliefs.  The new law does not mandate every pharmacy to carry every drug, including the FDA approved “Plan B” drug, but it does require a pharmacy to tell a patient the location of another pharmacy where the patient can obtain the prescription.

 

IPA Legislative Update – November 2007

Page 2

 

PBM CONTRACT NEGOTIATION BILL (H.R. 971) ALLOWING INDEPENDENT PHARMACIES TO NEGOTIATE WITH INSURERS

On November 7^th, the House Judiciary Committee released by a unanimous voice vote an amended version of H.R. 971, “The Community Pharmacy Fairness Act”.  These amendments have virtually gutted the bill.  

The original bill was designed to give independent pharmacies the legal authority to collectively negotiate terms of contracts with PBM’s that are more fair for pharmacies and their patients.  The amended version puts severe limitations on that ability.  Besides limiting the number of independent pharmacies in a negotiation group, the amended bill may prohibit independent pharmacies from taking any compliance action that would be considered boycotting.  The amended bill also places a 5-year sunset on this antitrust exemption.  IPA and other network groups are evaluating this amended bill to determine if it does more harm than good.  We will keep you informed. 

MEDICAID MORATORIUM REGULATIONS FURTHER AMENDED

 On October 1^st, New Jersey’s Department of Human Services proposed regulatory amendments to further limit the application of the Medicaid pharmacy provider moratorium imposed through the state budget.  The proposed changes will reduce the distance limits for pharmacies to qualify for a moratorium exemption from 1 pharmacy within 5 miles and 2 within 10 miles to 1 pharmacy within 1 mile and 2 pharmacies within 2 miles.

Remember, a change in owners or location of an existing store is NOT subjected to this moratorium.  That means you can keep your Medicaid number if you move your store.  And if you sell your existing store, the new owner will be granted a new Medicaid provider number if they meet all other necessary requirements.

 

Please contact John Covello at 800-575-2667 if you have any questions or would like a copy of any documents referenced in this report.

 

 

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To:  IPA NJ Members                                   From:  John Covello                                      October 2007 

Medicaid Tamper Resistance Pad:  FEDERAL LAW DELAYED 6 MONTHS

There have been many questions about the application in New Jersey of a new federal Medicaid fraud prevention law that requires CMS to deny Medicaid prescription claims that are not on a tamper resistant prescription form (NCPA was successful in getting the law’s October 1 effective date delayed for 6 months).  NJ Medicaid officials have verified that New Jersey prescription pad forms approved for use by the NJ Board of Pharmacy are considered tamper resistant under this new federal Medicaid requirement.  When the federal law takes effect April 1, 2008, you will still be reimbursed for all Medicaid prescription claims from NJ prescribers.

Stores filling Medicaid prescriptions from bordering state prescribers should be aware that New York State prescription pads are also compliant.  Because Pennsylvania is now in the process of developing a compliant, tamper resistant script pad, NJ Medicaid is recommending that NJ pharmacies have Medicaid prescriptions from Pennsylvania prescribers or any other non‑compliant state FAXED to their store since the new federal law does not apply to faxed prescriptions or computer generated electronic prescriptions.

NJ Independent Pharmacy Owners Urge Rep. Pallone to Fix Flawed Medicaid Generic AMP Drug Formula to Protect Patient Access    

On September 19^th several IPA independent pharmacy store owners, IPA’s John Covello and other pharmacy group representatives held a press conference at Zajac’s Pharmacy in New Brunswick.  They urged New Jersey Rep. Frank Pallone, Chair of the House Health Subcommittee, to use his considerable clout to move legislation - H.R. 3140 - the “Saving Our Community Pharmacies Act of 2007 - to correct the Centers for Medicare & Medicaid Services’ (CMS) flawed AMP formula for Medicaid generic drug reimbursements. 

The press conference highlighted how CMS’s final AMP rule is still an inaccurate benchmark for Medicaid generic drug reimbursement and thus did not mitigate the severity of the cuts in any way (36% below pharmacies’ generic drug acquisition cost according to a GAO study).  The group stressed the urgent need for a Congressional fix to AMP before the January 30, 2008 effective date as the only way for independent community pharmacies in underserved rural and urban areas to avoid the unsustainable losses from substantially lower Medicaid generic drug reimbursements.  These IPA members focused on how this threat to independent pharmacies’ future would dramatically endanger vulnerable patients’ health by limiting their access to health care lifeline medication and other valuable pharmacy services, forcing them to seek access to medications through more costly delivery methods of emergency rooms and doctor’s offices.

“AMP is simply not an accurate reflection of community pharmacies’ actual retail drug acquisition cost, because it includes many acquisition prices that are not available to independent pharmacies, like Zajac’s Pharmacy, in the formula,” said Covello.  “CMS has created a reimbursement system that will cause many independent pharmacies in New Jersey and across the country to either limit or drop their participation in Medicaid.  And, because of this misguided government policy, any pharmacy that has a high percentage of Medicaid patients is at great risk of going out of business.”

 

IPA Legislative Update – October 2007

Page 2 

 

AMP FIX PRESS CONFERENCE CONTINUED

 

Many thanks go to Zajac’s Pharmacy owner Balakachetty (Rad) Radhakrishnan (located in Rep. Pallone’s district) for hosting this event.  Rad best summed up how AMP will hurt patients: 

“I am a constituent of Congressman Pallone facing a severe economic hardship as a result of this ill-advised Medicaid reimbursement formula.  But my patients who will truly feel that hardship are HIV-positive and have relied on my services for many years.  I keep a large stock of their required medications in my store and, if I go out of business, these patients will struggle because the chain drug stores don’t have the same level of supply.  That means these patients will wind up having to get their needs met at the nearest emergency rooms such as at Robert Wood Johnson University Hospital.  We need Congressman Pallone’s help before that happens.”

 

We also would like to thank the following IPA member storeowners for participating in this event:  Tom Kelly (Medicine To Go, Forked River and Lakewood), Mike Fedida (J&J Pharmacy, Teaneck), Chris Otto (Broadway Health Pharmacy, Newark), and Jim Vizzoni, IPA Board President (Vizzoni’s, and Siegel’s Pharmacies, Trenton and Allentown Pharmacy, Allentown).

 

Congressman Pallone has introduced his own version of the Senate bill to fix AMP.  NCPA sent letters for you to sign and return to Chairman Pallone thanking him for his interest in fixing AMP, but urging him to work with the sponsors of H.R. 3140 to ensure independent pharmacies are fully reimbursed by Medicaid for generic prescription drug costs.  If you have not already done so, please send this letter TODAY!  Your voice is important to preserving your business and your Medicaid patients’ access to pharmacy care.

 

If you have any questions or need help in getting this letter to NCPA, please contact John  Covello, IPA’s Exec. Dir. of Gov’t & Public Affairs at jcovello@ipagroup.org or 800-575-2667.

 

NPI STATUS

 

As a pre-cursor to the May 23, 2008 requirement to use the National Provider Identifier (NPI) on all Medicaid prescription claims, New Jersey Medicaid on October 3^rd started requiring all Medicaid prescription reimbursement claims to have either:

 

1)   the Prescriber Service Number (PSN); or

2)   the State Medical License Number (New Jersey prescribing practitioners ONLY without

the “NJ” identifer); or

3) the National Provider Identifier (NPI) of the prescribing practitioner on all Medicaid prescription claims submitted by dispensing pharmacies.

 

As of October 3, 2007, the State stopped accepting the default value of “6666666” to identify a New Jersey prescribing practitioner.

 

If the prescribing practitioner is out-of-state, the prescribing practitioner shall use their NJ Medicaid PSN or their National Provider Identifier (NPI).  If the out-of-state prescribing practitioner has neither a NJ Medicaid PSN nor an NPI, then, and only then, shall the prescribing practitioner use the default value “5555555” to designate that they are the prescribing practitioner. 

 

If you are experiencing problems with submitting these Medicaid claims, please contact Heather Rodgers at IPA at hrodgers@ipagroup.org or 800-575-2667.

 

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NJ Press Event

New Jersey Pharmacists Urge Rep. Pallone to Fix Flawed Medicaid Generic Prescription Drug Formula to Ensure Patient Access New Brunswick, NJ - September 19, 2007 A group of New Jersey pharmacists held a press conference at Zajac’s Pharmacy today urging Rep. Frank Pallone (D-N.J.)—Chair of the Health Subcommittee for the House Energy and Commerce Committee—to use his considerable clout to push legislation to correct the flawed system for Medicaid generic prescription drug pharmacy reimbursements that will start being implemented next month. The flawed system will hurt the economic viability of the independent community pharmacies and endanger patient access to medication and other valuable services.   The speakers included Balakachett (Rad) Radhakrishnan, the owner of Zajac’s Pharmacy, which is located in Rep. Pallone’s district. He was joined by other pharmacists and pharmacy officials from throughout New Jersey that included Tom Kelly, owner of Medicine To Go in Forked River and Lakewood, and Kaplers Pharmacy in Beach Haven; Mike Fedida, owner of J&J Pharmacy in Teaneck; Chris Otto, owner of Broadway Health Pharmacy in Newark; Jim Vizzoni, owner of Siegel’s Pharmacy in Trenton and president of the Board of Directors for the Independent Pharmacy Alliance (IPA); John Covello, executive director of government and public affairs for IPA; Stephen Brandt, executive director of the Garden State Pharmacy Owners (GSPO), and Pete Reiss, executive vice president of GSPO. The reason for the event can be traced back to the Deficit Reduction Act of 2005, which cut Medicaid pharmacy services by over $8 billion. The law directed the Centers for Medicare & Medicaid Services (CMS) establish new guidelines for Medicaid generic reimbursement based on an inaccurate Average Manufacturer Price (AMP) formula. A Government Accountability Office report from December 2006 found that, on average, pharmacies would be paid 36 percent below their acquisition costs as a result of this new benchmark. When CMS published the final reimbursement rule on July 17, the severity of the cuts were not mitigated in any way.  “AMP is simply not an accurate reflection of actual retail acquisition cost, because it includes many sales prices that are not available to independent pharmacies like the place we are gathered at today, Zajac’s Pharmacy, in the formula,” said Covello. “CMS has created a reimbursement system that will cause many independent pharmacies in New Jersey and across the country to either limit or drop their participation in Medicaid. If a pharmacy has a high percentage of Medicaid patients they might even go out of business. All of this is happening not because of free market competition but because of misguided government policy.” The sense of urgency arises because the AMP implementation process begins October 1 and is scheduled to be completed January 30. At that time, community pharmacies—the health care lifeline for underserved rural and urban areas—the losses these small business owners will be substantial. With patient access to medication inevitably being limited and their health at further risk, they will turn to visiting emergency rooms and doctor’s offices more often, which are more expensive and those costs will be passed on to taxpayers. “I am a constituent of Congressman Pallone that is facing severe economic hardship as a result of this ill-advised Medicaid reimbursement formula,” said Radhakrishnan. “But that hardship will truly be felt by my patients, some who are HIV-positive and have relied on my services for many years. I keep a large stock of their required medications in my store, and if I go out of business these patients will struggle because the chain drug stores don’t have the same level of supply. That means these patients will wind up having to get their needs met at the nearest emergency rooms such as at Robert Wood Johnson University Hospital. We need Congressman Pallone’s help before that happens.”   H.R. 3140, the Saving Our Community Pharmacies Act of 2007, is a bill designed to address the problems with the AMP rule by doing three things. It defines the benchmark for pharmacy reimbursement to accurately reflect pharmacy acquisition costs, which is important for any small business owner who can not survive under a business model where they take in less money than they pay out. It also excludes all sales from mail order facilities and pharmacy benefit manager price concessions and rebates that aren’t provided to retail pharmacy, which is necessary because the average price is driven down by the inclusion of these prices that are unavailable to community pharmacies. Finally, it includes provisions to drive generic utilization that would increase government savings. Chairman Pallone has the ability to make sure H.R. 3140 is voted on in his subcommittee. In the Senate a similar bill, S.1951, the Fair Medicaid Drug Payment Act of 2007, also needs action. Any differences between the bills will need to be reconciled in conference committee, but that can not happen without Chairman Pallone jump-starting the process in the House of Representatives. At the event, Kelly detailed how his pharmacy in Forked River provides packaged medications to the patients in group homes, which he will likely stop providing under the projected AMP. For these patients community pharmacies are essential to ensure their health care needs are properly addressed because a large chain will not provide this type of service. His fellow pharmacists Vizzoni, Fedida, and Otto also provided poignant first-hand stories of the potential impact on their patients, many of whom also have unique medical challenges or language barriers. Brandt and Reiss, who work closely with pharmacies throughout the state, also explained the AMP fix needs to be addressed by the state government since Medicaid is a federal-state partnership. All of the participants were dismayed that the federal government would design a policy that hurts small business owners who provide such a valuable service to their communities and would ultimately not save money. The National Community Pharmacists Association, founded in 1898, represents the nation’s community pharmacists, including the owners of more than 23,000 pharmacies. The nation’s independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines. To learn more go to www.ncpanet.org.

   

   

 

 

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To:  IPA Members                           From:  John Covello                                 September 2007

 

Federal Legislation Fix to AMP Introduced 

Retail Pharmacy’s concerted effort to scrap the ill-devised CMS approach to change Medicaid’s generic drug reimbursements through its regulation defining average manufacturers’ price (AMP), gained significant momentum with 2 Congressional bills introduced before the Congressional August summer recess.  These bills aim to change AMP ensuring that community pharmacies will not be reimbursed by Medicaid below their generic drug acquisition costs.   

The first bill (H.R. 3140), the “Saving Our Community Pharmacies Act”, would replace AMP with a new generic drug reimbursement formula called “retail acquisition cost” (RAC). The bill’s reimbursement for RAC would be based on a CMS periodic national random survey of community pharmacies acquisition invoice price from wholesalers for generic drugs.  H.R. 3140 provides for this average acquisition cost reimbursement to be the federal upper limit (FUL) adjustment for Medicaid generic prescription reimbursements.  The House bill also requires CMS to conduct a cost of dispensing survey to assist states in revising the current Medicaid dispensing fee. To date, Congressman Frank Biondo (R-2^nd District) is the only New Jersey Congressman as an original co-sponsor of the bill. 

Another AMP fix bill (S. 1951), the “Fair Medicaid Drug Payment Act” was introduced in the Senate.  This bill dramatically improves the CMS below acquisition cost reimbursement AMP formula by excluding mail order purchases and other discounts and rebates.  The Senate bill, while increasing the FUL under this proposed new AMP formula to 300 percent, does not require CMS to address a dispense fee increase keeping pharmacy reimbursement at a level that covers the true cost to dispense Medicaid generic prescriptions.  New Jersey Senators Frank Lautenberg (D) and Robert Menendez (D) are not co-sponsors of this bill. 

IPA is working closely with NCPA and other retail pharmacy groups to push for congressional action on these bills prior to the January 30^th start of the state using the CMS adopted AMP-based drug reimbursement pricing.  A recent HHS’s Inspector General’s evaluation determined that AMP will reimburse pharmacies at below acquisition cost for nearly all of the 25 most widely dispensed generic drugs reimbursed by Medicaid. 

In order to build support for fixing AMP before it devastates independent pharmacies and jeopardizes vulnerable patients access to pharmacy, please contact your House member where your store is located and ask them to co-sponsor H.R. 3140.  Also contact Senators Lautenberg and Menendez and urge them to co-sponsor S. 1951.  You can call or write your respective Representative or Senator’s office or send an email letter directly from the NCPA website (www.ncpanet.org). 

Senate Introduces Medicare Part D Prompt Payments Legislation 

In July, NCPA and other pharmacy groups were successful in having two key Senators introduce S. 1954, the “Pharmacy Access Improvement Act (PhAIM) that is similar to House bill (H.R. 1474) to address the Part D prescription drug program problems for pharmacies.  Besides both bills ensuring prompt payment to pharmacies from Part D PDP’s, providing interest payment by PDP’s to pharmacies for late payments, requiring PDP’s to give pharmacies deficiency notices about claims and restricting PDP co-branding with pharmacy stores, S. 1954 also requires the HHS Inspector General to study and report to Congress on pharmacies’ cost to dispense Part D drugs. 

Congressmen Rob Andrews (D-1^st District) and Frank Biondo (R-2^nd District) are the only New Jersey Congressman to co-sponsor of the bill.  As for S. 1954, New Jersey Senators Frank Lautenberg (D) and Robert Menendez (D) have yet to co-sponsor this bill. 

IPA is working closely with NCPA and other retail pharmacy groups to push for congressional action on this much need bill to fix the low and slow payments of Part D claims by PDP’s.   The preliminary 2006 NCPA-Pfizer Report is showing how Part D is reducing independent pharmacies profitability by reducing income and increase account receivable pending claims.   

In order to build support fixing the way PBM’s profit off of advance payment of taxpayer money by paying Part D claims later or lower, please contact your House member where you live or your store is located and ask them to co-sponsor H.R. 1474.  Also contact Senators Lautenberg and Menendez and urge them to co-sponsor S. 1954.  You can either call or write your Representative or Senator’s office, or send an e-mail letter directly from the NCPA website (www.ncpanet.org).   

If you have any questions about or need help in contacting your federal legislator regarding any of these bills, please contact John Covello, IPA Director of Government and Public Affairs at jcovello@ipagroup.org or 800-575-2667. 

Board of Pharmacy Criminal History Background Checks 

At its July meeting, the New Jersey Board of Pharmacy ruled that any criminal history background check reports given to the Board’s Executive Director shall be brought to the Board’s attention if the report incident occurred within the past ten (10) years.  The Board also ruled that the Executive Director shall have the discretion to bring to the Board attention any other criminal background checks reports for any actions, including repeat offenses, fraud, CDS violations, that are egregious enough to impact the licensees ability to practice pharmacy.

Medicaid Moratorium Regulations 

On August 6^th, the Division of Medical Assistance and Health Services (DMAHS) finalized the regulations to implement the Medicaid pharmacy provider moratorium.  Under the regulations, the moratorium will not apply to the change of ownership of an existing pharmacy or the change in location of an existing pharmacy.  There are several special criteria in the regulations that DMAHS will use to determine if an exemption will be granted to the moratorium (i.e. 5 miles between urban stores, home delivery, language services). 

DMAHS has also clarified that stores can keep their existing Medicaid provider number when selling the store to an existing partner or corporate officer so long as the store does not change its IRS tax ID and its Board of Pharmacy store license number. 

DMHAS is considering revisions to these regulations that IPA and the NJ Retail Pharmacy Coalition have suggested to make the moratorium exemption provision fairer. 

To:  IPA Members                                         From:  John Covello                                  July 2007

 State Budget 

For the past few months, IPA and the NJ Retail Pharmacy Coalition (Coalition) conducted extensive lobbying efforts aimed at revising the disproportionate cuts placed on pharmacy care in the Governor’s budget.  IPA and the Coalition made great strides to heightening the Administration’s and Legislature’s awareness of the need for fairer pharmacy reimbursement rates that are not below pharmacy’s drug acquisition cost which jeopardizes vulnerable patients’ access to pharmacy care. 

IPA and the Coalition succeeded in retaining in the adopted state budget our current Medicaid/PAAD/Senior Gold reimbursement rate at AWP minus 12.5% for brand drugs.  Without knowing the final harm of AMP, we did at least get the state budget to clarify that generic reimbursements will remain at AWP minus 12.5% until CMS finalizes new generic drug reimbursement allowances pricing (see below).   

Also, for the sixth straight budget, IPA, as part of a very broad coalition, had the Medicaid Rx $2 co-payment removed from the budget, thus avoiding another potential $7 million cut in pharmacy reimbursement!!  Finally, the budget does continue the moratorium on new pharmacies participating in the Medicaid program, but regulations will ensure that existing stores can be sold or move their location and still participate in the Medicaid fee-for-service program. 

The fight to ensure that the state hold pharmacies harmless from CMS’s pending reimbursement cuts from Generic drug AMP is not over!!  The Coalition will be spending the summer and fall months positioning to get supplemental budget language passed once the deadline for using AMP is clear and we can demonstrate the actual final cost of AMP to New Jersey’s pharmacies. 

AVERAGE MANUFACTURERS’ PRICE (AMP) IS ON ITS WAY!! 

CMS has publicly announced that it expects to adopt the final AMP rule definition for generic drugs by July 2^nd, with a December 30^th start date for the states to use the new FUL pricing for Medicaid generic drug reimbursements to pharmacies.  While the final impact is not yet known, a June HHS Inspector General’s Office analysis determined that the preliminary AMP for generics would reimburse pharmacies below their drug acquisition costs for 19 of the 25 generic drugs most used and paid for by the Medicaid program!!!  When factoring in the cost to dispense, the IG report concluded that pharmacies would be reimbursed below their total costs for 24 of these 25 generic drugs!!!! 

IPA and the Coalition will continue to work vigorously with our national organizations to stop this rule, get Congress to create a real legislative fix to AMP and have our state government provide a “hold harmless” reimbursement adjustment to make sure New Jersey’s Medicaid pharmacy patients still have access to pharmacy care.

SHBP RX Co-Pay 

With the ratification of a new state employees contact this spring, there are several changes to the State Health Benefits Plan (SHBP) including new prescription drug co-payment requirements for all active employee recipients. 

Remember, IPA and the Coalition, working with several unions, was successful in thwarting the efforts to require SHBP patients into a mandatory maintenance Rx mail order requirement!

Effective July 1, 2007, SHBP Rx co-payment requirements are as follows: 

·         For a 30-day supply, prescription drugs purchased at a retail pharmacy, the co-payment will remain $3 for generic drugs and $10 for brand name without a generic equivalent.

·          For a 30-day supply brand name prescription drug with a generic equivalent purchased at a retail pharmacy, the new co-payment will be $25.

·         The mail order prescription drug co-payments, for up to a 90-day supply, will remain $5 for generic drugs and $15 for brand name drugs without generic equivalents.

·         A new third tier co-payment has been created of $40 for mail order brand name drugs where a generic equivalent is available.

·         The co-payments mentioned above for prescription drugs will not apply to SHBP retirees.  Retirees Rx co-payment amounts and total threshold will remain at the amounts set at the beginning of 2007.  These new changes only apply to active SHBP employees at this time.

PRICE REGISTRY WEBSITE - U&C COSTS 

As the first step toward implementing the new New Jersey Prescription Drug Retail Price Registry Law, the New Jersey Division of Consumer Affairs has developed a preliminary website of pharmacy usual and customary (U&C) charges for the 150 most used prescriptions. 

In accordance with this new law, the Division has recently developed a PRELIMINARY website listing the U&C price pharmacies reported to the NJ Medicaid program in the first half of 2007 for each of these 150 prescriptions.  This site only lists the U&C prices pharmacies submitted to Medicaid for those specific prescriptions, as a unit price and a price for a 30-day, 60 day and 90 day supply. 

As the implementation of this drug price registry continues, it is important for every IPA member to take care in ensuring it includes its U&C price in every Medicaid, PAAD and NJ Senior Gold claim submitted to Unisys since price will now be available to the public on the website.  Please keep in mind that your store’s U&C price for a particular drug will not be listed if you have not submitted a reimbursement claim to Unisys for that drug in 2007. 

Please visit the NCPA Legislative Action Center and reach out to your Legislators about AMP, Slow and Low reimbursements, and Take it or Leave it contracts.  NCPA drafts a letter automatically and will send it to your Legislators.

      TO:  IPA NY Members                     FROM:  John Giampolo                         May 1, 2007 

 1. CMS FINALIZES REGULATIONS FOR ACCREDITING DURABLE MEDICAL EQUIPMENT (DME) PROVIDERS FOR COMPETITIVE BIDDING 

Diabetes supplies are EXCLUDED from this requirement!!!

Competitive bidding still required for accredited suppliers to sell other covered DME products  

On April 2^nd, the Center for Medicare and Medicaid Services finalized its regulations on the accreditation

 and competitive bidding requirements for providers of durable medical equipment supplies for

reimbursement under Medicare Part B.  The good news in this final regulation is that pharmacy sales of diabetic supplies are EXEMPT from bidding.  Pharmacies will still need to become accredited under CMS’s program for diabetic and Part B supplies by 2010 in order to continue to be reimbursed by Medicare Part B.

Specifically, pharmacies will need to be accredited to participate in the competitive bidding process to be reimbursed by Medicare Part B for all other DME (i.e. canes, walkers, powered and non-powered wheelchairs, oxygen supplies, nutritional formula pumps and supplies).  This new federal regulation requirement for the competitive bid process will apply to the New York Metropolitan area or the rest of New York State by 2008 at the earliest however; the accreditation deadline is 2010 for now.  For more information on these new requirements for Medicare DME providers, please visit the IPA website at www.ipa-rx.org.

  2. CMS EXTENDS DEADLINE FOR PROVIDERS TO OBTAIN NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI)

In April, CMS extended the May 23^rd deadline for all Medicaid and Medicare providers to obtain their National Provider Identification Number (NPI) in order for pharmacies and other care providers to be reimbursed by both programs for one year.  Of the nearly 1440 New York IPA member stores, we have verified that nearly 300 stores have their NPI number. 

Keep in mind that many private plan third party payers are still requiring pharmacies and prescription prescribers to use a NPI on their claims submission in order to have claims payments processed.

If you have not obtained an NPI, we strongly urge you to do it now!!!  If you have applied, please provide us with your number below so we can update our database to assist you with any third party issues.  If you have any questions, please call Heather Rodgers at 800-575-2667.

     3.      Please share with us any comments or issues.  Your input is important to us. 

(Please fax to 609-395-1007)

Please list Pharmacy NPI Number _______________________ (IPA also needs this for Third Party Support)

Please also list your current NABP #________________________ (For cross-reference only)

Issues or comments:__________________________________________________________________

__________________________________________________________________________________

        TO:  IPA Members                                 FROM:  John Covello                               April 2007

1.  CMS FINALIZES REGULATIONS FOR ACCREDITING DURABLE MEDICAL EQUIPMENT (DME) PROVIDERS FOR COMPETITIVE BIDDING

Diabetes supplies are EXCLUDED from this requirement!!!

Competitive bidding still required for accredited suppliers to sell other covered DME products  

On April 2^nd, the Center for Medicare and Medicaid Services finalized its regulations on the accreditation and competitive bidding requirements for providers of durable medical equipment supplies for reimbursement under Medicare Part B.  The good news in this final regulation is that pharmacy sales of diabetic supplies are EXEMPT from this requirement.  That means you can continue to supply your patients with their diabetic equipment and supplies without having to go through the time consuming and costly competitive bidding requirement.  Pharmacies will still need to become accredited under CMS’s program for diabetic supplies sales by 2010 in order to be reimbursed by Medicare Part B.

Under the new regulation, pharmacies will need to be accredited and participate in the competitive bidding process to be reimbursed by Medicare Part B for all other DME         (i.e. canes, walkers, powered and non-powered wheelchairs, oxygen supplies, nutritional formula pumps and supplies).  This new federal regulation requirement for the competitive bid process will not apply to the State of New Jersey or the New York Metropolitan area until 2008 at the earliest.

The bottom line is make sure you obtain your accreditation to continue to get Part B payments for diabetes supplies and you must be accredited in order to participate in CMS’s competitive bidding process for all other DME.

  2. CMS EXTENDS DEADLINE FOR PROVIDERS TO OBTAIN NATIONAL PROVIDER IDENTIFICATION NUMBER (NPI)

In April, CMS extended the May 23^rd deadline for all Medicaid and Medicare providers to obtain their National Provider Identification Number (NPI) in order for pharmacies and other care providers to be reimbursed by both programs for one year.  Of the nearly 650 New Jersey IPA member stores, we have verified that nearly 200 stores have their NPI number.  Because of this Federal deadline extension, New Jersey Medicaid will also be extending its deadline for all Medicaid participating providers to obtain their NPI number.

Keep in mind that many private plan third party payers are still requiring pharmacies and prescription prescribers to use a NPI on their claims submission in order to have claims payments processed.

If you have not obtained an NPI, we strongly urge you to do it now!!!  If you have not responded to our survey to provide us with your NPI number, we will be sending a follow-up request survey to your store.  Please fill out that form once you receive it. 

NPI – GET IT, USE IT, SHARE IT!!!

3.   NEW JERSEY DMAHS PROPOSES REGULATORY EXEMPTIONS AND EXCEPTIONS TO MEDICAID PHARMACY PARTICIPATION MORATORIUM

WILL EXEMPT EXISTING STORE SALES AND RELOCATIONS FROM MEDICAID REIMBURESMENT MORATORIUM

On April 16^th, New Jersey’s Department of Human Services finally proposed regulations to define what exemptions exist to the Medicaid provider moratorium enacted in last year’s state budget.  The proposal also spells out the type of special needs criteria for DMAHS to use in granting exceptions to the new pharmacy provider moratorium.

Most importantly, the change in owners or location of an existing store will NOT be subject to this moratorium.  That means you can keep your Medicaid number if you move your store.  If you sell your existing store, the new owner will be granted a new Medicaid provider number. 

The proposed regulations do provide certain criteria for underserved areas and special services that the Division will use in determining whether to grant a new store a Medicaid provider number.  Please contact John Covello at 800-575-2667 if you have any questions about the proposed regulations on the Medicaid moratorium.

WE NEED YOUR HELP!  From now until the end of June there will be a host of fundraisers that IPA will absolutely need to attend in order to get our message out to the members of the NJ State Legislature.  Please make your contribution today!  If everyone just gave $300, we would have enough to effectively carry out our message.  

NCPA Legislative Letters to CMS about fixing AMP (House Energy and Commerce-bullets 1 and 2)