NCPA lobbies Congress on AMP, prompt pay, other issues

July 14, 2008

A delay in AMP implementation, prompt pay for Medicare Part D claims, and e-pedigree are among the major issues addressed at the NCPA legislative show.

It's not realistic to get a permanent fix for the AMP issue in this Congress, because "it costs money," said Charles Sewell, National Community Pharmacists Association VP, briefing the NCPA legislative conference attendees before they headed to Capitol Hill.

What is realistic, he said, is that a delay in AMP implementation could be passed as part of a healthcare legislative package which is being driven by the desire to stop pay cuts to physicians and is slated for action by the end of June.

The Government Accountability Office in a December 2006 report looked at a sample of 77 multiple-source outpatient prescription drugs and found that the estimated AMP-based prices averaged 36% lower than the average retail pharmacy cost of acquisition.

Sewell stressed that a calculation done for NCPA indicated that 10,000 to 12,000 of independent pharmacists, almost half in the nation, would go out of business if the provision goes into effect.

Members of Congress seem to be open for a delay of the AMP provision, possibly for nine months to a year, with a requirement that a study of it be done, he said.

The pharmacists also lobbied for a prompt pay requirement under Medicare Part D to be in this summer's legislative package. Although prescription benefit management companies (PBMs) are paid in advance by Medicare, NCPA asserted that only 1.3% of electronically submitted Part D claims are electronically reimbursed within two weeks of adjudication and half are not paid within 30 days. That's in contrast to the two-week turnaround standard for Medicaid claims, said NCPA.

"Payment delays have forced independents to take credit lines in the tens of thousands," said Sewell. He stressed that credit float was something Congress never meant to create in passing Part D.

Sewell warned that President Bush may veto the healthcare package. However, he said, "We think that there's a pretty good chance if you have the right issues in this bill that we can even withstand a presidential veto. But we have got to get into the bill first."

Beyond the provisions NCPA hopes to get in that package, the pharmacists asked legislators to support two bills (H.R. 971 and S. 2161) to give independent pharmacies an antitrust exemption to negotiate prescription benefit manager contracts. The House Judiciary Committee passed the bill last November.

The lack of such an exemption puts independent pharmacies at a serious disadvantage in comparison with larger chains, maintains NCPA.

However, the Congressional Budget Office estimates this bill will cost up to $600 million over five years, said Sewell, "because PBMs say that if they end up having to negotiate in a legitimate fashion with you, they are going to have to raise rates."

CVS recently acquired Caremark, Sewell pointed out. The NCPA handout said, "As major chains enter the PBM business, community pharmacy reimbursements-and our patients' treatment options-are now controlled by our competitors."

The legislation would allow groups of independent pharmacies to negotiate with health plans and insurers in the same manner as allowed for protected activities under the National Labor Relations Act.

The pharmacists also argued against a recently introduced bill (H.R. 5839) that would have the federal government establish standards for a drug identification and tracking system through which drug manufacturers, re-packagers, wholesale distributors, and dispensers could authenticate the wholesale distribution history of prescription drugs using required numerical identifiers.

Although NCPA supports "track and trace" or "e-pedigree" legislation to deter counterfeiting, Sewell said the required technology would cost every retail location $20,000 to $30,000 in initial costs plus $6,000 every year.

THE AUTHOR is a writer based in the Washington, D.C., area.