Health-Care Bill Has Wide-Ranging Impact on Pharmacy & Patients 

NCPA’s Summary of the Impact on Community Pharmacy
Detailed Breakdown of the Entire Bill

HR 3590, the Patient Protection and Affordable Care Act, was signed into law by President Obama today (3/24). The sweeping legislation has projected price tag of $938 billion over 10 years and will extend insurance coverage to roughly 32 million more Americans. The bill contains a number of provisions that directly affect community pharmacy and prescription drug coverage and will significantly expand the number of Americans who can afford prescription medications and other pharmacy services. The millions of additional people with health insurance will mean billions more in sales for drug manufacturers and expanded demand for pharmacy services.

Pharmacy-Specific Provisions

Adjustment to Medicaid Reimbursement Rate
The bill scales back cuts to Medicaid pharmacy reimbursement rates under the average manufacturer price (AMP). The new law requires that the government set upper reimbursement limits using a multiplier of "no less than" 175% of AMP. The Deficit Reduction Act of 2005 had set reimbursement rates below pharmacy’s acquisition cost, although a joint lawsuit filed by the National Association of Chain Drug Stores and the National Community Pharmacists Association resulted in a two-year stay of the reduction in December 2007. Although a rate set at 175% of weighted AMP would cost pharmacies an estimated $1.5 billion over the next 10 years, the 2005 rate proposed by the Centers for Medicare and Medicaid Services would have been catastrophic, forcing many pharmacies out of business. Effective date – Immediate.

Exemption from DME accreditation
The law exempts most pharmacies from having to become accredited under the Medicare DME program and delays the effective date of current accreditation requirements to January 2011. (Pharmacies that want to competitively bid under the DME program will still need accreditation.) But a pharmacy can be exempt from the accreditation requirements if it documents that its total Medicare DME billings are 5 percent or less of total prescription sales (based on a three-year rolling average) and that it has had no adverse fraud or abuse determination against it for the last five years. Effective date – Immediate.

Pharmacist MTM Services
The bill establishes an expanded patient care role for pharmacists to help improve use of prescription medications, especially for patients with chronic illnesses. These include pharmacist roles in accountable care organizations, medical homes, “transitions of care” teams, and medication reconciliation activities. The bill also creates an MTM grant program that will help test new and innovative MTM methods, though the grant program will be subject to the annual appropriations process. Effective date – To Be Determined.

New Annual Fees on Drugmakers
A total annual fee of $2.5 billion will be imposed on pharmaceutical manufacturers. The fees are to help finance improvements in Medicare drug coverage. Effective date – Jan. 1, 2011. The fee rises to $3.5 billion on Jan. 1, 2017, and to $4.2 billion on Jan. 1, 2018.

Provisions Affecting Pharmacy Patients
(Provisions directly affecting patients’ eligibility for health or drug coverage or their ability to pay for medications and pharmacy services.)

Preventive Services: Health insurance plans are required to cover preventive services such as immunizations for children and cancer screenings for women. Effective date – In six months.

Medicare Drug Rebates: Medicare patients who face a gap in prescription drug coverage will receive a one-year, $250 rebate in 2010 to help pay for medications. Effective date – Immediate.

Coverage of Adult Dependent Children: Insurance companies will have to provide coverage for dependent children up to the age of 26. Effective date – In six months.

Elimination of Pre-Existing Conditions & Lifetime Caps: Insurers will be barred from denying coverage to children with pre-existing medical conditions, such as asthma, heart defects or cancer. Effective date – In six months.

Protections for adults with pre-existing conditions won’t take effect until 2014, but the legislation calls for a national high-risk insurance pool program that they can buy into this year. The legislation also prohibits insurance companies from canceling coverage for people who develop costly health problems. It eliminates lifetime caps on covered medical expenses. Effective date – In six months.

Medicare Coverage Gap: Drug companies will provide a 50% discount on brand-name prescription drugs for seniors who face a gap in drug coverage. More subsidies will be phased in through 2020, when the coverage gap will be closed. Effective date – Jan. 1, 2011.

Medicare Advantage Plans: Seniors who get their medications through Medicare Advantage plans — plans combining hospital, physician and drug coverage — could see their premiums rise or benefits cut. That's because the law reduces Medicare payments to those plans. About 23% of Medicare beneficiaries are in those plans.

Medicaid Expansion: Income limits that determine Medicaid eligibility of low-income Americans under age 65 will increase to 133% of federal poverty level, or $29,327 for a family of four. Effective date – Jan. 1, 2014.