Will New Rules From the Bush Administration Help Medicaid?
According to the New York Times, on Monday the Bush administration proposed a new rule to reduce reimbursements to pharmacists for Medicaid beneficiaries. If implemented, the new rule is expected to save .4 billion dollars over the next five years, .9 billion in federal savings and .5 billion in local savings for states.
The rule would make sure that Medicaid is receiving the same discounts on prescription drugs as other private entities such as Caremark Rx and Medco Health Solutions which manage and negotiate drug benefits for people that receive their health insurance through an employer.
The Department of Human and Health Services has estimated that the majority of the savings (90%) would come from local pharmacies. The rest of the savings would come from the drug manufacturers which would be required to give price concessions on some specific drugs prescribed at the doctor’s office.
Although the plan could save money it could also hurt local pharmacies. The New York Times says, “The rule could reduce revenues for many of the nation’s 18,000 small retail pharmacies. The administration also said it had no way to measure that impact precisely, though it acknowledged the reductions could fall particularly hard on “those in low-income areas where there are high concentrations of Medicaid beneficiaries.”
Officials told the New York Times that a loss of revenue could be avoided by finding cheaper sources of prescription medication. This is of course assuming a cheaper source for medications can be found.
Bruce T. Roberts the executive vice president of the National Community Pharmacists Association commented, “The proposed rule would have the perverse effect of discouraging the use of generic drugs.”
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