MIPA Gets Medicaid Reimbursement Cuts Reversed

The purpose of this letter is to inform you that due to the quick and effective actions of Mississippi Independent Pharmacies Association (MIPA), Mississippi pharmacies avoided a devastating cut in reimbursement for filling and dispensing prescriptions to Medicaid beneficiaries.

On July 1, 2014 the Mississippi Division of Medicaid (DOM) changed the pharmacy reimbursement methodology to National Average Drug Acquisition Cost (NADAC) plus a $11.20 dispensing fee. DOM’s justification for the change was that under a new federal regulation proposed by The Centers for Medicare and Medicaid Services (CMS) states were required to base pharmacy reimbursement on an actual acquisition cost methodology. This change drastically cut the overall dollars paid to pharmacies for filling and dispensing prescription drugs to Medicaid beneficiaries.

The Mississippi Independent Pharmacies Association (MIPA), acting through its Board of Directors and its Executive Director, Robert Dozier, began to look at possible means of fighting the change. They soon discovered that CMS had delayed the implementation of the mandate requiring states implement an acquisition cost methodology. Without such a mandate DOM did not have the authority to change the rate or methodology of reimbursement. Under our State law only the legislature can do so. This fact was made clear in the 2008 litigation brought and led by MIPA against Medicaid in which the Mississippi Supreme Court voided DOM’s previous attempt to independently change the methodology of reimbursement and implement a State Maximum Allowable Cost (State MAC).

MIPA directed its attorney, Price Coleman, to inform DOM by letter of its opposition to the rule change and demand that the former rates of reimbursement be reinstated. A copy of this letter is attached. Once DOM reviewed the letter it agreed to withdraw the rule change and return to the old reimbursement rates and methodology. A copy of DOM’s withdrawal of the rule change is also attached.

This is a huge victory for MIPA but most of all it is a huge victory for the independent pharmacy community of this state.

Medicaid 2014 Letter to DOM