New MIPPA law includes several pro-pharmacy items

September 15, 2008

While the new MIPPA law implements several pro-pharmacy measures, other provisions ultimately could hurt a pharmacist's bottom line.

Key Points

However, the groups quickly warned that pharmacists need to be aware of parts of the law that delay implementation of certain provisions. Those provisions, if enacted, ultimately could hurt a pharmacist's bottom line. One of the biggest victories came in the area of "prompt payment." Beginning Jan. 1, 2010, the Centers for Medicare and Medicaid Services (CMS) must reimburse pharmacies within 14 days for claims filed under Medicare Part D.

"Prompt payment was a tremendous victory for pharmacy," Hrant Jamgochian, director of Congressional and State Relations for the American Pharmacist Association (APhA) in Washington, said.

Miller said she has heard anecdotal reports of community pharmacies waiting 30 to 60 days for reimbursement. Typically, pharmacies restock every two weeks, meaning that pharmacists must pay out of pocket long before reimbursement comes through, putting a financial strain on their businesses. The prompt-pay requirement eliminates that wait, mandating payment within two weeks.

Pharmacists would have taken a hit if the Average Manufacturers Price (AMP) reimbursement had cleared. As it is currently written in the law, pharmacists would receive a reimbursement averaging 36 percent below their acquisition costs for generic drug prescriptions under Medicaid. MIPPA has delayed enacting that level of reimbursement until September 2009.

However, the National Community Pharmacists Association (NCPA) and the National Association of Chain Drug Stores (NACDS) have teamed up to sue CMS and other government entities involved in drafting the bill to stop the below-cost reimbursement from ever taking effect. The lawsuit is pending in federal court.

The law also has delayed competitive bidding for durable medical equipment and supplies. The NCPA worked hard to ensure that diabetes testing supplies were exempt from competitive bidding, said Bill Popomaronis, vice president of home health care and long term care pharmacy services at NCPA. If those supplies had been included in competitive bidding, Popomaronis said, it would have made it much more difficult for people to get them. However, he added, there has been a misunderstanding among pharmacists concerning this part of the law. Despite the fact that diabetic supplies will not be competitively bid at this time, pharmacists still must be accredited as suppliers by Sept. 30, 2009.

"In general, the vast majority of suppliers are not accredited," he said. "It's our job to make sure they understand that there is a timeline, so they can continue to provide access to durable medical equipment like diabetes testing supplies."

While other durable equipment, such as oxygen and wheelchairs, will be subject to competitive bidding, Popomaronis said, diabetic supplies are not expected to be included in that group. However, he warned, just as with the AMP delay, this too is "just a delay, not a suspension," so pharmacists should stay tuned for more action on the subject. The fourth major area of the law gives physicians an incentive for e-prescribing. In 2009 and 2010, physicians will receive a 2 percent increase on Medicare payments for e-prescribing. That incentive drops to 1 percent in 2011-12 and to 0.5 percent in 2013. On the flip side, physicians will receive a decrease in penalty of 1 percent in 2012, 1.5 percent in 2013, and 2 percent in 2014 and beyond.