NACDS to CMS: Fix Pharmacy Reimbursement Rate Calculations for Drug Discount Cards

August 14, 2020

NACDS is urging the Centers for Medicare & Medicaid Services (CMS) to change how pharmacy reimbursement rates are calculated for drug discount cards.

NACDS is urging the Centers for Medicare & Medicaid Services (CMS) to change how pharmacy reimbursement rates are calculated for drug discount cards.

In its letter1 to CMS, NACDS said that states are using data from third-party prescription drug discount transactions “in a way that is inconsistent with federal law and policy, and that drives down reimbursement to pharmacies for prescriptions that they fill in the Medicaid program,” NACDS said in a news release.2

Without a remedy, NACDS said pharmacies may be financially unable to continue to accept third-party discount cards.

“Although consumers pay out of pocket when using third-party discount cards, the price returned to the pharmacy by the third-party discount card operator during adjudication is not the price that the pharmacy usually charges the general public,” wrote NACDS President and CEO Steven C. Anderson in the letter. “The pharmacy only facilitates the lower prices made available by the third-party card operator to customers who present the card. Indeed, the pharmacy stands operationally and financially in the exact same position as it does with beneficiaries of other third-party [payers], such as health insurers and governmental entities.”

At issue is the concept of “usual and customary pharmacy charges”, a measure of the prices charged to uninsured, cash-paying patients. “State Medicaid programs rely on this measure of ‘usual and customary pharmacy charges’ to ensure that they do not pay pharmacies more than cash-paying customers do for a drug,” NACDS said in the news release.

“However, states have been using the evaluation of ‘usual and customary pharmacy charges’ in ways not allowable under current laws and policies. Among them, states are including in the calculation of “usual and customary” the amount that users of third-party discount cards pay for a drug, which artificially lowers pharmacy reimbursement,” NACDS added.

“Critically, if state Medicaid programs include third-party discount cards in calculations of [usual and customary], pharmacies may be financially unable to continue to accept third-party discount cards,” Anderson wrote.

“For consumers on tight budgets who rely on third-party discount cards to pay for their medications, the potential loss of access to these discounted medications would be devastating. Elimination of an option that provides lower-priced medication to the underinsured and uninsured would directly contravene the Administration’s policy to promote affordable access to prescription drugs,” Anderson added.

References:

1. Letter re: State Definitions of “Usual and Customary” Pharmacy Charges. NACDS; August 12, 2020. Accessed August 13, 2020. https://www.nacds.org/pdfs/government/2020/NACDS-CMS-UandC-8-11-2020.pdf

2. NACDS asks CMS to fix state calculations that make Medicaid pharmacy reimbursement even worse. News release. NACDS; August 12, 2020. Accessed August 13, 2020. https://www.nacds.org/news/nacds-asks-cms-to-fix-state-calculations-that-make-medicaid-pharmacy-reimbursement-even-worse/