Inadequate Payments Under Medicare Prescription Drug Benefit Lead To Pharmacy Closures

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MedicarePrescription Drug Benefit

Pharmaciescan charge health insurers an 18% premium on the cost of medications andreceive a dispensing fee of about $2.27 cents per prescription under the Medicareprescription drug benefit, according to a report released on Thursday by the HHS Office of Inspector General, the AP/Houston Chronicle reports. According to the report,pharmacists receive $2 less in dispensing fees for prescriptions filled underthe Medicare prescription drug benefit than they receive for prescriptionsfilled under Medicaid.

The Association of Community Pharmacists said that the report confirms thatreimbursements for prescriptions filled under the Medicare prescription drugbenefit are inadequate and have forced many community pharmacies to close. The18% premium that pharmacies can charge does not cover all of their costs, suchas employee wages, taxes and utilities, ACP said.

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ACP Government Affairs Director Mike James said that most community pharmacieswould have to charge a 20% to 21% premium to remain in business. More than1,100 community pharmacies closed last year, and many cited inadequatereimbursements for prescriptions filled under the Medicare prescription drugbenefit, James said.

The report -- requested by 33 senators after community pharmacies complainedabout reimbursements for prescriptions filled under the Medicare prescriptiondrug benefit -- did not include a recommendation on whether the payments areadequate. The senators who requested the report likely will seek additionalinformation (AP/Houston Chronicle, 1/10).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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