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Press Release

Medication Therapy Management: 'Affordable' for Medicare

The provision of drug therapy management services to Medicare beneficiaries to improve medication use and assure patient safety would cost $13 billion over the next ten years, according to a report released today by the Pharmacist Provider Coalition (PPC).

The figure represents the likely impact on the federal budget from S. 974, the Medicare Pharmacist Services Coverage Act of 2001, sponsored by Senators Tim Johnson (D-S.D.) and Thad Cochran (R-Miss.). Bipartisan legislation (H.R. 2799) has also been introduced in the House of Representatives.

"This legislation would provide Medicare beneficiaries with pharmacists’ drug therapy management services provided in collaboration with physicians and other health care professionals to help patients make the best use of medications," said Johnson. "Access to these services is particularly important now while many Medicare beneficiaries struggle to pay out-of-pocket for their prescription medications and as Congress looks to design a comprehensive and affordable prescription drug benefit for the future."

Don Moran, a former official with the Office of Management & Budget and president of The Moran Company, conducted the study. The Moran Company has extensive experience in evaluating how the Congressional Budget Office (CBO) "scores" the potential budgetary effects of Medicare legislation.

"In producing this analysis of S. 974, we have adopted CBO's typical approach to evaluating legislation where decisions by Medicare beneficiaries and providers will affect whether and how services are utilized," said Mr. Moran. "Our estimates take into consideration the likelihood of increased demand for the professional services of pharmacists, but, in accordance with CBO policy, do not include the potential for offsetting savings to the Medicare program that may well result from reduced hospitalizations, fewer medication errors, and increased patient compliance with drug regimens."

Improved patient care and cost savings from pharmacist interventions are the major benefits of utilizing pharmacists in patient care roles. Research in respected medical literature, such as the Journal of the American Medical Association, has shown that when pharmacists are part of patient care teams, patients have fewer adverse drug events and experience improved outcomes, and health care costs are decreased.

Pharmacists are experts on the thousands of medications available and the ways to use each one safely and effectively. The need for pharmacists’ involvement in drug therapy management is particularly important for patients age 65 and older. According to a recent survey conducted by the American Society of Health-System Pharmacists (ASHP), half of American seniors take five or more medications daily.

The Moran budget analysis of S. 974 anticipates that pharmacist services to Medicare beneficiaries will fall into two categories:

  • Chronic disease management encompasses support for the estimated 55% of Medicare beneficiaries under treatment for chronic diseases of which at least one chronic condition requires a prescription. Services will be furnished in clinics or in community pharmacies based on a physician’s referral or under an established collaborative agreement.  
  • Pharmaceutical therapy management encompasses oversight and patient consultation aimed at decreasing the likelihood of medication errors and improving compliance with medication regimens. Services will be provided in both inpatient and community settings at the request of the prescribing physician.

S. 974 would amend the Social Security Act to include pharmacists among the health care professionals classified as "health care providers." This recognition would allow pharmacists to be covered under Medicare for providing high-level patient care services. The Social Security Act currently recognizes a number of other health care professionals as "providers," including registered dieticians, nurse practitioners, physician assistants, certified nurse midwives, and clinical social workers.

The Pharmacist Provider Coalition is composed of the American Society of Health-System Pharmacists (ASHP), the American College of Clinical Pharmacy (ACCP), the Academy of Managed Care Pharmacy (AMCP), the American Society of Consultant Pharmacists (ASCP), and the American Pharmaceutical Association (APhA).

To read the full text of the legislation or to learn more about the Pharmacist Provider Coalition, go to