BOSTON, MA (August 27, 2002) – Testifying at a public hearing today, four experts drawn from the long-term care community urged Massachusetts regulators to exempt nursing-home pharmacies from a pending cut in MassHealth reimbursement rates. The proposed cut would drop current reimbursement rates by 12 percentage points. Earlier this month, Acting Governor Swift vetoed a legislative exemption that would have spared nursing-home pharmacies from a general cut in reimbursement to all pharmacies serving beneficiaries of MassHealth, the commonwealth’s Medicaid program for the poor and disabled.

“Cutting reimbursement rates for nursing-home pharmacies will do little to check the rising cost of pharmaceuticals in Massachusetts,” said Stephen J. Northrup, executive director of the Long Term Care Pharmacy Alliance (LTCPA), which represents the major national nursing-home pharmacy operators. “Nursing-home pharmacies do not control the price of drugs or the drugs doctors prescribe. What we do control is the safe, efficient and responsible delivery of high-quality pharmacy care to the frail elderly and the facilities that serve them. All we ask in return is continued fair reimbursement from Massachusetts for the MassHealth recipients that make up the majority of our patients.”

Today in Massachusetts, 90 percent of prescriptions written for institutionalized patients are filled by nursing-home pharmacies. Because nursing-home residents are older, sicker and in need of more medication than the general population, nursing-home pharmacies must provide a level of service that goes beyond that provided by the typical retail drug store. Among these critical services are clinical consultations to monitor complex drug interactions, specialized packaging that ensures safe and accurate medication administration, and round-the-clock emergency delivery.

"The proposed Medicaid reimbursement rate reductions could strain nursing home pharmacies to the breaking point and potentially force some or all to leave the Medicaid program,” said Claire Wheeler, RN a nursing home nurse. “That would create a severe medication access problem for nursing home residents since seven out of every ten of our residents are on Medicaid, and the vast majority of those use multiple prescription drugs every day. Given their unique characteristics and patient profiles, nursing-home pharmacies should be exempted from these rate cuts."

A study conducted by the accounting firm of BDO Seidman, LLP found that it costs the major national operators of nursing-home pharmacies, on average, approximately $11.37 to dispense a prescription. In contrast, the National Association of Chain Drug Stores (NACDS) estimated in 2000 that it costs a chain pharmacy, on average, $7.05 to dispense a prescription to a retail customer. The higher operating costs for nursing-home pharmacies are directly related to the intensive service needed to care for this medically complex and vulnerable patient population.

“We provide special services to people with special needs,” said William Donatelli, RPh, director of operations for NeighborCare and president of the Massachusetts Chapter of the American Society of Consultant Pharmacists. “It’s true that nursing-home pharmacies do incur higher costs than other pharmacies, but these costs are directly related to the needs of the frail and vulnerable elderly patients we serve. We could not guarantee safe and effective pharmacy care for nursing-home residents if we did not assume the costs of providing specialized packaging systems, round-the-clock delivery, intravenous medications, and on-site clinical consultation.”

"Cutting MassHealth reimbursement to pharmacies across the board could have severe, long-term impacts on the ability of long-term care pharmacies to serve

Massachusetts nursing homes, potentially causing serious access problems to these critical services for the state's most vulnerable residents," said George

Cayer, RPh, general manager for PharMerica’s Massachusetts pharmacies and chairman of the local chapter of the LTCPA.

The legislature’s Joint Committee on Health Care invited LTCPA to present testimony at today’s legislative hearing, scheduled in advance of a September 5 rate-setting hearing to be conducted by the Massachusetts Division of Health Care Finance and Policy.