Pharmacists Say HHS OIG Report Validates Concerns That Inadequate Payments Under Medicare Prescription Drug Benefit Lead To Pharmacy Closure

Main Category: Pharmacy / Pharmacist
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 14 Jan 2008 - 0:00 PDT

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Pharmacies can charge health insurers an 18% premium on the cost of medications and receive a dispensing fee of about $2.27 cents per prescription under the Medicare prescription 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 under the Medicare prescription drug benefit than they receive for prescriptions filled under Medicaid.

The Association of Community Pharmacists said that the report confirms that reimbursements for prescriptions filled under the Medicare prescription drug benefit are inadequate and have forced many community pharmacies to close. The 18% premium that pharmacies can charge does not cover all of their costs, such as employee wages, taxes and utilities, ACP said.

ACP Government Affairs Director Mike James said that most community pharmacies would have to charge a 20% to 21% premium to remain in business. More than 1,100 community pharmacies closed last year, and many cited inadequate reimbursements for prescriptions filled under the Medicare prescription drug benefit, James said.

The report -- requested by 33 senators after community pharmacies complained about reimbursements for prescriptions filled under the Medicare prescription drug benefit -- did not include a recommendation on whether the payments are adequate. The senators who requested the report likely will seek additional information (AP/Houston Chronicle, 1/10).

The report is available online.

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