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Imperfect Medicare Law has Positive Implications for Pharmacists

Donna Young

The Medicare reform bill signed into law December 8, 2003, by President George W. Bush is a “good first step” toward providing prescription drug coverage to Medicare beneficiaries, said Kathleen M. Cantwell, director of federal legislative affairs and government affairs counsel for the American Society of Health-System Pharmacists (ASHP).

The revision is expected to cost about $400 billion over 10 years and adds a prescription drug benefit for Medicare beneficiaries beginning in 2006.

Until the drug benefit is available, the law authorized the Centers for Medicare & Medicaid Services (CMS) to establish a drug discount card program.

The card, intended for use at community pharmacies, will be available to Medicare beneficiaries this spring.

“We don’t think it’s perfect,” Cantwell said about the Medicare reform law. But ASHP and the pharmacy community, she said, will continue to work with Congress and CMS to “help shape the benefit.”

The landmark Medicare law, Cantwell explained, includes several provisions that will have positive implications for health-system pharmacy.

One of the most meaningful to pharmacists, she said, is a measure that “opens the door” for patient access to pharmacist-provided services.

As part of the new Medicare Part D prescription drug benefit, Cantwell observed, patients with multiple chronic conditions—such as diabetes, asthma, hypertension, hyperlipidemia, and congestive heart failure—will have access to medication therapy management services.

The provision, she said, calls for health plans offering a Medicare drug benefit to develop a program that will establish a system to pay providers, including pharmacists, for drug therapy management services.

Although the new law does not specify that a pharmacist must provide the medication therapy management services, Cantwell remarked, the law recognizes that pharmacists are likely to provide the majority of those services.

For the first time, she asserted, the value of drug therapy management services has been recognized by the government, and the provision ensures that pharmacy has a “seat at the table.”

The recognition of drug therapy management services, she added, is a “huge step forward toward our goal of having pharmacists recognized as providers of service under Medicare Part B.”

Cantwell said that the Pharmacist Provider Coalition—a joint effort of ASHP and six other national pharmacy organizations—worked closely with congressional offices on the medication therapy management provision.

The coalition, she affirmed, “remains committed to build on the momentum generated by the medication therapy management provision to obtain recognition for pharmacists under Part B of the Medicare program.”

“The Medicare reform legislation recognizes chronic care management and enhanced preventive care services in Medicare Part B,” Cantwell said. “In order to ensure medication therapy management services are included as part of the chronic care benefit and that all Medicare beneficiaries can access these services, it will be important to recognize pharmacists in a similar manner as other health care professionals, including nurse practitioners, physician assistants, registered dietitians, and others, are recognized under part B of the Medicare program.”

Other provisions. The revised Medicare law includes a measure that will remove a barrier that has prevented disproportionate-share hospitals from negotiating lower prices on inpatient pharmaceuticals under the 340B program, Cantwell noted.

The provision, she maintained, will help more than 160 safety-net hospitals increase access for their patients to needed medications.

The new law will also stabilize reimbursement rates for medications used in hospital outpatient clinics, while requiring further study of product reimbursement rates and associated pharmacy costs, Cantwell said.

The law sets “payment floors” for drug and biological products covered under the hospital outpatient prospective-pricing system in 2004 and 2005.

For sole-source drugs, the payment will be 88% of the average wholesale price (AWP) in 2004 and 83% of the AWP in 2005. In 2004 and 2005, payments for multiple-source drugs will be 68% of the AWP, and 46% of the AWP for generic drug products.

The Medicare reform law requires the General Accounting Office to conduct an acquisition cost survey in 2004 and 2005 and provide data to CMS to use in setting payment rates for 2006, Cantwell said.

Medicare reform also requires the Medicare Payment Advisory Commission—an independent federal body that advises Congress on issues affecting the Medicare program—to submit a report to CMS regarding payment adjustments that take into account overhead and related expenses, such as pharmacy services and handling costs, she added.

Another change under the Medicare law is a provision that will enhance consumer access to generic medications by reforming the Hatch–Waxman Act to close loopholes that dramatically slow generic drug market entry, Cantwell said.

Included in the revised law, Cantwell said, is a “safety measure” on a provision that would allow importation of medications from Canada.

Under the law, the Secretary of the Department of Health and Human Services (HHS) must certify that importation would not reduce quality of care and that costs would be reduced.

A similar provision passed earlier by Congress was previously rejected by HHS.

“This debate is likely to continue,” Cantwell said, “but for now, we are happy that Congress maintained the status quo and did not choose to place lower-priced medications over patient safety.”

The new Medicare Prescription Drug, Improvement, and Modernization Act, she said, will “shape health care and pharmacy practice over the next few years.”

Cantwell urged health-system pharmacists to remain attentive to issues surrounding Medicare reform.

ASHP, she added, will be “providing additional information over the coming months and years to help the pharmacy community implement this benefit.”