Breaking News: NACDS warns of impact on pharmacy if debt deal fails

July 29, 2011

If the U.S. Congress fails to reach a consensus on the deficit issue by August 2, there could be significant impact on Medicare and other federal programs, the National Association of Chain Drug Stores announced today.

If the U.S. Congress fails to reach a consensus on the deficit issue by August 2, there could be significant impact on Medicare and other federal programs, the National Association of Chain Drug Stores (NACDS) announced today.

“Should Congress fail to meet the August 2 deadline, the impact will be far-reaching, potentially downgrading the U.S. debt and leading to higher interest rates. The impact on payments to providers in public programs is also significant,” wrote Carol Kelly, senior vice president of government affairs and public policy, in a recent letter to NACDS chain members.

As of July 29, Democrats and Republicans had not voted on the proposal put forth by Senate Majority Leader Harry Reid (D-NV) that calls for a $1.2 trillion reduction in discretionary spending, $60 billion in savings through reductions in mandatory spending (excluding Social Security, Medicare, and Medicaid), and $40 billion in savings through reductions in fraud, waste, and abuse in public programs.

If an agreement is not reached, billing for Medicaid, Medicare Part B, Medicare Part D, and the Department of Defense’s TRICARE program - along with reimbursements to pharmacies -could be affected, Kelly said. “Failure to raise the debt ceiling would likely have a very direct and immediate impact on Medicare Part B, delaying payment for Part B drugs as well as durable medical equipment such as diabetes testing supplies,” Kelly wrote.

The next federal Medicaid payment to the states is due on September 1. “Assuming an agreement on the debt ceiling is reached by September 1, Medicaid payments should continue uninterrupted, but delays are possible,” Kelly wrote.

The Department of Defense does not make prospective payments to Express Scripts, the current pharmacy benefit manager (PBM) for the TRICARE program. “While DoD has not received any information on how to move forward in the event of default, we anticipate that pharmacy reimbursements would be delayed,” Kelly wrote.

Since Medicare Part D plans will have already received their August payments by the deadline, it is likely that pharmacies will continue to receive reimbursement, at least during the month of August, Kelly wrote.