The Center for Medicare and Medicaid Services (CMS) is looking to change its model to set drug reimbursement costs given to open-door--patients can come in and drop off prescriptions--community pharmacies. It is being called the National Average Drug Acquisition Cost (NADAC).
The current model is for states to reimburse open-door community pharmacies based off of a Average Wholesale Price (AWP). Both look at an average cost of medication to a pharmacy as a means to setting a baseline of reimbursement. The difference between this method and the new method proposed is the issue of transparency.
A pharmacy purchases its drugs, sells its drugs and then submits its cost to the state (or Pharmacy Benefit Manager, a.k.a. PBM) for reimbursement. This composes of a time lag between when the product leaves the pharmacy and when the anticipated payment is made. If the price fluctuates, the pharmacy lost control of what drug it would sell for what price. This makes the operation of a business fundamentally challenging and often frustrating.
With AWP, there are ways states, PBMs (and even pharmacies, hence the introduction of Maximum Allowable Costs, a.k.a. MAC) try to circumvent or change the amount reimbursed in order to try to save money. This often leaves the pharmacy stuck with the bill. The hope is that NADAC will make the amount a pharmacy receives in reimbursement transparent so pharmacies can more accurately count for what payment they will receive.
Tuesday, August 30, 2011
Sunday, June 26, 2011
Low Drug Costs to Get In
The Details:
An interesting angle to NCPA's push for The Medicare Access to Diabetes Act.
Market analysis is seeming to show that Wal-Mart is using its low cost prescriptions, to the point of losing money per prescription filled, as a means to get customers in the door, only to increase the costs on other items (here diabetes supplies) to make up the difference.
My Feelings:
There are many angles of consideration here, and one of these days I will try to exhaustively list my feelings on the issue. In short: I am in NCPA because I feel independent business is vitally important to a thriving economy, and Wal-Mart has caused many independent businesses to go out of business. Yet, it is not Wal-Mart that does that, since it is the customers who opt to go to Wal-Mart who do so. In economic terms Wal-Mart has operated efficiently, and should be respected for such. My supreme concern is that the economic playing field be balanced and open. If one business is allowed to muscle its way through because of its size, and because it can sustain a larger game of attrition or it can get away with questionable practices, then the customer/patient suffers.
An interesting angle to NCPA's push for The Medicare Access to Diabetes Act.
Market analysis is seeming to show that Wal-Mart is using its low cost prescriptions, to the point of losing money per prescription filled, as a means to get customers in the door, only to increase the costs on other items (here diabetes supplies) to make up the difference.
My Feelings:
There are many angles of consideration here, and one of these days I will try to exhaustively list my feelings on the issue. In short: I am in NCPA because I feel independent business is vitally important to a thriving economy, and Wal-Mart has caused many independent businesses to go out of business. Yet, it is not Wal-Mart that does that, since it is the customers who opt to go to Wal-Mart who do so. In economic terms Wal-Mart has operated efficiently, and should be respected for such. My supreme concern is that the economic playing field be balanced and open. If one business is allowed to muscle its way through because of its size, and because it can sustain a larger game of attrition or it can get away with questionable practices, then the customer/patient suffers.
Vermont Pharmaceutical Information Ruling by Supreme Court
The Details:
The U.S. Supreme Court made a ruling on Thursday (June 23) on a case of pharmaceutical information in Vermont.
The case involved the sale of prescribing information (only what doctor prescribed what drug, not to whom) from pharmacies to "data miners," who would in turn compile the information and sell it back to pharmaceutical manufacturers, who would in turn use the information to fine tune their marketing strategies to doctors.
Vermont law made the above practice illegal, but allowed the sale of prescribing information for other non-marketing reasons, such as health research.
The Supreme Court ruled that the Vermont law was invalid since it unconstitutionally burdened the pharmaceutical manufacturer's free speech, i.e. marketing, in comparison to the other entities who had access to the information.
My Feelings:
This is a tough one in my opinion. If the law allows one entity to receive the information, but bans another, it is by definition unfair and discriminatory. But, at what point does that unfairness or discrimination become unconstitutional?
What I find most interesting, and maybe slightly disturbing, is that the acquisition of information is considered part of free speech. Creation and dissemination, yes, but acquisition?
The U.S. Supreme Court made a ruling on Thursday (June 23) on a case of pharmaceutical information in Vermont.
The case involved the sale of prescribing information (only what doctor prescribed what drug, not to whom) from pharmacies to "data miners," who would in turn compile the information and sell it back to pharmaceutical manufacturers, who would in turn use the information to fine tune their marketing strategies to doctors.
Vermont law made the above practice illegal, but allowed the sale of prescribing information for other non-marketing reasons, such as health research.
The Supreme Court ruled that the Vermont law was invalid since it unconstitutionally burdened the pharmaceutical manufacturer's free speech, i.e. marketing, in comparison to the other entities who had access to the information.
My Feelings:
This is a tough one in my opinion. If the law allows one entity to receive the information, but bans another, it is by definition unfair and discriminatory. But, at what point does that unfairness or discrimination become unconstitutional?
What I find most interesting, and maybe slightly disturbing, is that the acquisition of information is considered part of free speech. Creation and dissemination, yes, but acquisition?
Wednesday, June 15, 2011
Pharmacy Benefit Managers
For those interested in going into independent pharmacy, one will quickly hear about Pharmacy Benefit Managers, or PBM's. Essentially these are the insurance companies that go out and market an insurance plan to businesses or individuals in order to cover their perscriptions. They are also the entities that pharmacies need to work with and through in order to get reimbursements for drugs sold to individuals under the respective insurance plans.
One of NCPA's largest complaints, and I fundamentally believe rightfully so, is that PBMs do not act fairly. Two major reasons for this are their size and the lack of transparency to observe what they are doing. This sets up economic incentives for PBMs to perform questionable behavior, succumming to the market pressure to maximize bottom lines.
Here is a good summary of some of the issues and complaints that are against PBMs.
One of NCPA's largest complaints, and I fundamentally believe rightfully so, is that PBMs do not act fairly. Two major reasons for this are their size and the lack of transparency to observe what they are doing. This sets up economic incentives for PBMs to perform questionable behavior, succumming to the market pressure to maximize bottom lines.
Here is a good summary of some of the issues and complaints that are against PBMs.
NCPA Legislative Conference 2011 Summary
NCPA had its 2011 Legislative Conference in Washington D.C. The major pieces of legislation that were pushed were:
1) A push for congress men and women to join the pharmacy caucus. This would demonstrate that the member of congress is publicly saying they are concerned about the issues of pharmacy.
2) The Pharmacy Competition and Consumer Choice Act. House Version: HR 1971, Senate Version: S 1058. These bills aim to make Pharmacy Benefit Managers (PBMs) more transparent. To understand more about PBMs read here.
3) The Medicare Access to Diabetes Supplies Act. House Version: HR 1936. In order to try to lower government spending, the Centers for Medicare and Medicaid Services (CMS) feel that having diabetic supplies covered under Medicare Part D being sold only through those who can bid the lowest price would reduce overall spending. What this means is whoever could offer the lowest Diabetes supplies reimbursement, would get sole Medicare Part D funding to cover the sales. This would mean that only large chain organizations could offer Medicare Part D covered Diabetes supplies without 1) charging patient full market price or 2) selling Diabetes supplies at a business loss. Essentially bottom line cost reduction will reduce availability, which would especially hurt rural areas and independent pharmacies.
4) The Medication Therapy Management (MTM) Benefits Act of 2011. House Version: HR 891. This bill seeks to lower the requirements (conditions and number of drugs) a patient must have in order to have MTMs covered under Medicare Part D. This is to increase the pharmacist's role in MTMs, by allowing more reimbursements for time spend doing MTMs to more patients.
1) A push for congress men and women to join the pharmacy caucus. This would demonstrate that the member of congress is publicly saying they are concerned about the issues of pharmacy.
2) The Pharmacy Competition and Consumer Choice Act. House Version: HR 1971, Senate Version: S 1058. These bills aim to make Pharmacy Benefit Managers (PBMs) more transparent. To understand more about PBMs read here.
3) The Medicare Access to Diabetes Supplies Act. House Version: HR 1936. In order to try to lower government spending, the Centers for Medicare and Medicaid Services (CMS) feel that having diabetic supplies covered under Medicare Part D being sold only through those who can bid the lowest price would reduce overall spending. What this means is whoever could offer the lowest Diabetes supplies reimbursement, would get sole Medicare Part D funding to cover the sales. This would mean that only large chain organizations could offer Medicare Part D covered Diabetes supplies without 1) charging patient full market price or 2) selling Diabetes supplies at a business loss. Essentially bottom line cost reduction will reduce availability, which would especially hurt rural areas and independent pharmacies.
4) The Medication Therapy Management (MTM) Benefits Act of 2011. House Version: HR 891. This bill seeks to lower the requirements (conditions and number of drugs) a patient must have in order to have MTMs covered under Medicare Part D. This is to increase the pharmacist's role in MTMs, by allowing more reimbursements for time spend doing MTMs to more patients.
Saturday, April 16, 2011
HB 2067
Summary:
HB 2067 in the original form was to grant three additional powers to a county board of supervisors to further govern over their counties, on top of what they already could do. These three additional powers were: use county resources for search and rescue, contract out to provide search and rescue services, and to contract with an ambulance business to provide ambulance service to rural areas. HB 2067 was then amended to also give the county board of supervisors the ability to shop around for the best deal to contract out police services.
On 4/8/2011 The Arizona Board of Regents, who oversees the three state universities along with the board of UA Healthcare, voted to reduce the size of the combined board of supervisors of UA Healthcare from 26 to 19. UA Healthcare is a conglomerate of University Medical Center and University Physician's Hospital. Originally UMC had 13 members on its own board, and UPH had 13 on its own board. The plan was to join the two hospitals along with a partnership with the health colleges of the UoA to form a large research and educational health care system in southern Arizona.
After this vote, Kevin Burns, who was Interim President and CEO of UA Healthcare submitted his resignation.
On 4/13/2011, an additional floor amendment was added to HB 2067 which would completely strip the Arizona Board of Regents of all control over the health-care conglomerate of UA Healthcare and it would be replaced by a new Board of Directors.
On 4/14/2011 HB 2067 passed the Senate (27 to 3) and is currently waiting for House voting.
My feelings:
Clearly this is a political power-play. Why would a floor amendment, which fruit-basket-upsets a specific established governing unit, which is on paper a philanthropic organization, be attached last minute to a bill, which basically does run-of-the-mill good amending to general county policies? The two acts of legislation clearly do not mesh.
What seems to be happening is that some on the original board of supervisors are upset with the potential of losing their positions, which lead to pulling the right political strings to get this amendment attached to a pretty decent act of legislation. There also seems to be animosity in State Congress toward the universities, because while in the end life will likely go on as usual, what essentially is being said is, "Bad UoA, bad!" As a student in pharmacy school, this really angers me that a conglomerate that could potentially be extremely beneficial, educational, and informational is told to "back off" because some people has a bone to gnaw. That being said, I do not know all that went on behind closed doors, but the fight is definitely out in the open now, and the whole principle of attaching one group's personal vendetta against another group onto a good piece of legislation is politics at its worst.
If you opt to contact the Governor Brewer regarding this, here is the information:
On 4/19/2011 HB 2067 passed the House.
It seems the major discontent and reason for this bill is the Legislature feels the Board of Regents did not communicate properly or well. Maybe something needed to be done. Still, using another piece of legislation as the vehicle for chastisement is not right.
Update (5/1/2011):
Governor Jan Brewer vetoed HB 2067 along with 28 other bills on 4/29/2011. She also signed into law 357 bills into law.
HB 2067 in the original form was to grant three additional powers to a county board of supervisors to further govern over their counties, on top of what they already could do. These three additional powers were: use county resources for search and rescue, contract out to provide search and rescue services, and to contract with an ambulance business to provide ambulance service to rural areas. HB 2067 was then amended to also give the county board of supervisors the ability to shop around for the best deal to contract out police services.
On 4/8/2011 The Arizona Board of Regents, who oversees the three state universities along with the board of UA Healthcare, voted to reduce the size of the combined board of supervisors of UA Healthcare from 26 to 19. UA Healthcare is a conglomerate of University Medical Center and University Physician's Hospital. Originally UMC had 13 members on its own board, and UPH had 13 on its own board. The plan was to join the two hospitals along with a partnership with the health colleges of the UoA to form a large research and educational health care system in southern Arizona.
After this vote, Kevin Burns, who was Interim President and CEO of UA Healthcare submitted his resignation.
On 4/13/2011, an additional floor amendment was added to HB 2067 which would completely strip the Arizona Board of Regents of all control over the health-care conglomerate of UA Healthcare and it would be replaced by a new Board of Directors.
On 4/14/2011 HB 2067 passed the Senate (27 to 3) and is currently waiting for House voting.
My feelings:
Clearly this is a political power-play. Why would a floor amendment, which fruit-basket-upsets a specific established governing unit, which is on paper a philanthropic organization, be attached last minute to a bill, which basically does run-of-the-mill good amending to general county policies? The two acts of legislation clearly do not mesh.
What seems to be happening is that some on the original board of supervisors are upset with the potential of losing their positions, which lead to pulling the right political strings to get this amendment attached to a pretty decent act of legislation. There also seems to be animosity in State Congress toward the universities, because while in the end life will likely go on as usual, what essentially is being said is, "Bad UoA, bad!" As a student in pharmacy school, this really angers me that a conglomerate that could potentially be extremely beneficial, educational, and informational is told to "back off" because some people has a bone to gnaw. That being said, I do not know all that went on behind closed doors, but the fight is definitely out in the open now, and the whole principle of attaching one group's personal vendetta against another group onto a good piece of legislation is politics at its worst.
If you opt to contact the Governor Brewer regarding this, here is the information:
http://www.azgovernor.gov/Contact.asp Telephone (602) 542-4331 In State Toll Free 1-(800) 253-0883 (outside Maricopa County only) Fax (602) 542-1381
Update (4/21/2011):
On 4/19/2011 HB 2067 passed the House.
It seems the major discontent and reason for this bill is the Legislature feels the Board of Regents did not communicate properly or well. Maybe something needed to be done. Still, using another piece of legislation as the vehicle for chastisement is not right.
Update (5/1/2011):
Governor Jan Brewer vetoed HB 2067 along with 28 other bills on 4/29/2011. She also signed into law 357 bills into law.
Sunday, April 3, 2011
Taxing Poor Choices
Politics in Arizona is picking another major nerve to poke regarding health care. The proposal is to start taxing individuals who are on AHCCCS who make poor health-care choices regarding smoking, being overweight or regarding their diabetes. (More Information)
My Feelings:
From a economic, ethical and health-care stance I feel this measure barely scratches the surface. At issue here is the definition of what welfare should be. Does depending upon society for aid mean you still have the right to do whatever you want? Does it mean that you can continually harm yourself against medical advice and expect everyone else to pick up the bill for the consequences? Does it mean you should get care over someone else who is trying to take care of himself? Scarcity dictates that there is not enough money for everything, so who gets the care?
Also at issue here is incentives to encourage individuals to make better choices for themselves. Yes, taxes on indulgences can seem not nice, but by mere supply/demand they keep fewer individuals from doing them. As a health-care provider-to-be, I want to see people healthier, and logic dictates that means it may be a rough road for some. Of note, if individuals are healthier on average, that would decrease costs on the health-care system.
Finally, ethics play a major role. Coming from a Biblical background I will quote Scripture, "If a man will not work, he shall not eat." (2 Thessalonians 3:10). Since even Paul, who was physically handicapped (1 Corinthians 16:21, 2 Corinthians 12:7, etc.) knew that work meant more than just physical activity, even if someone cannot physically work, the mindset should be concern for one's fellow person. Those physically disabled can still encourage, give advice, develop their intellect, and, if you believe in the power of prayer, they can pray for others. If the mindset of welfare is "what can society give me?" instead of "what can I do with the help society provides?" the individual becomes a hole that only takes and does not give back. Why should this individual receive help over another individual who desires to give back? (again scarcity)
These are issue arguing questions, and I mean them as such. This issue is extremely important because it pokes at the very central nerve of why welfare provides health-care benefits.
Please feel free to post your comments regarding this below. Also please use this post to organize your thoughts, feelings and rationals regarding this issue and take a few minutes to write your legislators.
My Feelings:
From a economic, ethical and health-care stance I feel this measure barely scratches the surface. At issue here is the definition of what welfare should be. Does depending upon society for aid mean you still have the right to do whatever you want? Does it mean that you can continually harm yourself against medical advice and expect everyone else to pick up the bill for the consequences? Does it mean you should get care over someone else who is trying to take care of himself? Scarcity dictates that there is not enough money for everything, so who gets the care?
Also at issue here is incentives to encourage individuals to make better choices for themselves. Yes, taxes on indulgences can seem not nice, but by mere supply/demand they keep fewer individuals from doing them. As a health-care provider-to-be, I want to see people healthier, and logic dictates that means it may be a rough road for some. Of note, if individuals are healthier on average, that would decrease costs on the health-care system.
Finally, ethics play a major role. Coming from a Biblical background I will quote Scripture, "If a man will not work, he shall not eat." (2 Thessalonians 3:10). Since even Paul, who was physically handicapped (1 Corinthians 16:21, 2 Corinthians 12:7, etc.) knew that work meant more than just physical activity, even if someone cannot physically work, the mindset should be concern for one's fellow person. Those physically disabled can still encourage, give advice, develop their intellect, and, if you believe in the power of prayer, they can pray for others. If the mindset of welfare is "what can society give me?" instead of "what can I do with the help society provides?" the individual becomes a hole that only takes and does not give back. Why should this individual receive help over another individual who desires to give back? (again scarcity)
These are issue arguing questions, and I mean them as such. This issue is extremely important because it pokes at the very central nerve of why welfare provides health-care benefits.
Please feel free to post your comments regarding this below. Also please use this post to organize your thoughts, feelings and rationals regarding this issue and take a few minutes to write your legislators.
Subscribe to:
Posts (Atom)