Medicare bill passed by Senate seen critical to pharmacy

WASHINGTON —Will community pharmacy or the White House prevail in their long-running battle over prescription reimbursements?

Boiled down to its essence, that was the question on the minds of industry leaders in mid-July, following the decisive passage in the House and Senate of a landmark bill to overhaul key facets of the Medicare program. The legislation cleared both houses of Congress with veto-proof majorities despite strong opposition from President Bush, but at press time its future remained unclear.

The bill, known as the Medicare Improvements for Patients and Providers Act or H.R. 6331, would speed Medicare prescription payments to pharmacies, cancel a plan to cut Medicare payments to physicians and delay an alarming cut in Medicaid pharmacy reimbursements. As such, its approval was hailed as a major victory for retail pharmacy.

“Passage by both the House, and now the Senate, of this legislation is a victory for pharmacies across the country,” said Steve Anderson, president and chief executive of the National Association of Chain Drug Stores. “The pro-pharmacy measures in this legislation are essential to fostering better patient care and preserving access to pharmacy services.”

Cathy Polley, vice president of pharmacy services for the Food Marketing Institute, called the vote “a victory for low-income families across America.”

Among other changes, the bill would require pharmacy benefit plans to pay Medicare Part D prescription claims within 14 days. It also requires weekly updates of posted Medicare prescription drug prices, allowing pharmacies to more quickly adjust their claims data.

Importantly, the bill also postpones until Oct. 1, 2009, the implementation of a new pricing formula adopted by the Centers for Medicare and Medicaid Services for generic drugs dispensed under Medicaid.

That new formula, based on the average manufacturer price of a generic, would slash payments to pharmacies and force them to dispense generics to Medicaid patients at a loss, pharmacy leaders warned.

The bill also delays, for 18 months, the rollout of Round 1 of the new competitive bidding requirement for durable medical equipment and other health supplies sold by pharmacies and other outlets under Medicare Part B. H.R. 6331 also provides financial incentives to spur the adoption by physicians of electronic prescribing for Medicare.

Pharmacy leaders were buoyant over congressional support for those measures, but unclear about what happens next. Although the Senate passed the bill by a veto-proof majority of 69-30 July 10—with an ailing Sen. Edward Kennedy, D-Mass. making a dramatic appearance to cast a crucial vote in favor of the legislation, and Arizona Republican John McCain skipping the vote as he campaigns—President Bush immediately renewed his pledge to veto the legislation on the grounds that it would add to the spiraling costs of Medicare and reduce the role of the private insurance sector in health care for the elderly.

At press time, efforts to reach the White House for comment were not immediately successful. However, expectations were high that the bill would become law. “The president would only have to get a few senators to switch their vote [to sustain his veto],” observed Larry Kocot, visiting fellow at the Brookings Institution and deputy director of the Engelberg Center for Health Care Reform. However, he told Drug Store News, “It’s going to be a tough sell for the president to get anybody to switch,” given his low popularity, the state of the economy, the reluctance of lawmakers to switch their vote, and other factors.

Kocot urged pharmacy leaders, however, to look beyond the current victory and focus on a broader objective: the reinvention of the pharmacy payment model and the industry’s evolution beyond its current defensive posture.

Pharmacy leaders “need to get out of this constant reimbursement-system battle,” said Kocot, a veteran of NACDS and CMS. “They’ve shown some muscle in getting this thing passed…and they’ve got an incredible chance right now to go beyond this and show what pharmacy can really do in health care.”

For their part, Anderson and Polley urged the president to sign the measure into law. They were joined by such pharmacy leaders as John Gans of the American Pharmacists Association, Bruce Roberts of the National Community Pharmacists Association, Scott Melville of the Healthcare Distribution Management Association and Kathleen Jaeger of the Generic Pharmaceutical Association.

Retail industry analyst Deborah Weinswig of Citi Investment Research was among those anticipating quick resolution of the issue. “We think it is likely the bill will be enacted,” she noted in a July 10 report, adding, “it is likely the House and Senate could vote in the next 10 days to override his veto.”

She added that, “President Bush could take no action on the bill for 10 days, and [it] would become law.”