March 23, President Barack Obama signed into law the Patient Protection and Affordable Care Act, two days after the House passed the Senate reform bill by a vote of 219-212. This historic piece of legislation will provide the most sweeping changes to the U.S. health care system since legislation in 1965 created the Medicare program. This bill, which is expected to cost around $940 billion, will provide new coverage for more than 32 million individuals who do not currently have health insurance.

Some key pharmacy provisions included in the health care reform legislation are as follows:

• Improved definition of average manufacturers price (AMP) and direction to reimburse generic medications at a rate of not less than 175 percent of the weighted AMP
• Closure in the Medicare Part D coverage gap or “donut hole” over a period of 10 years through a rebate of $250 per beneficiary for 2010, then moving to a 50 percent discount on negotiated pricing for brand-name medications with the pharmaceutical manufacturers
• Increased funding of $250 million to fight Medicaid fraud, waste and abuse over the next 10 years
• Exemption for most pharmacies from durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) accreditation requirements if their Medicare durable medical equipment billings are 5 percent or less of total prescription sales. This legislation will also delay the date of pharmacy accreditation requirements for providers that do not qualify for the exemption until January 2011.
• New dispensing requirements for long-term care pharmacies in an effort to reduce waste from unused medications

State of Michigan Health Care Reform Web site

Obama Health Care Reform Web site

Sen. Debbie Stabenow's Health Care Reform Online Resource Center
Sen. Stabenow is a member of the Senate Finance Committee, one of the two Committees writing health care reform legislation.

Summary of Health Care Reform Legislation

Health Care Reform Timeline

HBs 5475-5476 would amend the Health Care False Claim Act (PA 323 of 1984) and the Medicaid False Claim Act (PA 72 of 1977).

The amendments to the Health Care False Claim Act and the Medicaid False Claim Act will achieve the following:

• Create and define audit criteria
• Audits and sample size will be representative of the true book of business for pharmacies
• Pharmacies shall be provided written notice at least two weeks before conducting the initial audit and be provided a mechanism to reschedule if necessary
• Any audit that involves clinical or professional judgment must be conducted by or in consultation with a pharmacist licensed in the state of Michigan
• Any clerical or record-keeping error shall not on its face constitute fraud without proof of intent to commit fraud
• A finding of overpayment or underpayment must be based on the actual overpayment or underpayment and may not be a projection based on the number of patients served having similar diagnosis or on the number of similar orders or refills for similar drugs
• Recoupment or payment adjustments of claims must be based on the actual overpayment or underpayment unless the pharmacy agrees to a projection as part of a settlement
• A finding of an underpayment shall be reimbursed with interest for the time period between detection and payment
• Create and define an appeal process
• Clarify what a valid medication order is, including those in health facilities

Prescription Outsourcing is Bad for Michigan’s Economy

• Michigan currently promotes the outsourcing of prescriptions for state employees, retirees, school personnel and all public employees through the utilization of mail order. This is simply bad business.
• In 2008, nearly 22 percent of these prescriptions were filled at mail order pharmacies, representing more than $55 billion in revenue shipped out of the state.
• Keeping jobs is critical to our state’s future. Nearly 250 pharmacies in Michigan have closed in the last two years – in part due to exporting prescriptions to out-of-state mail order pharmacies.
• All Michigan citizens should have the choice to develop a personal relationship with their pharmacist, which promotes patient safety, instead of being economically coerced through mandatory mail order programs

Patient safety issues

• Patients should make sure they have an established relationship with a pharmacist, which yields critical health benefits, including improving the safety of the patient.
• Mail order eliminates a patient’s opportunity to have face time with a pharmacist, who is required by law to be available and help patients understand how to use their medications. Patients must have the ability to interact with their pharmacist, the medication experts, to make sure there are no interactions with other medications they are using, how to ease any potential side effects and other important issues.
• Receiving a prescription in the mail is not conducive for patients to be able to ask their pharmacists any questions they have about their medications and how to use them to receive the best results to improve their health. In addition, the patient is not under the watchful care of their pharmacist, who can make additional recommendations based on personal, face-to-face consultation.
• Mail order makes it much more difficult for patients to access a pharmacist, let alone develop a relationship to coordinate all of their medication therapy. Mail order often results in patient’s receiving medications from multiple different sources, without a central coordination of care by a pharmacist, who can make sure that all of the medications work safely together.

Economic issues

• Currently, many pharmacy benefit managers (PBMs) and some employers economically coerce patients to utilize mail order services for maintenance prescriptions. The PBM or other entity usually sends the prescription outside the state to be filled.
• This practice is shipping jobs and businesses out-of-state, along with the tax dollars, income and local spending. Nearly 250 pharmacies in Michigan have closed in the last two years.
• Outsourcing prescriptions negates the state’s “Buy Michigan” campaign.

Waste issues

• Many times, mail order prescriptions deliver a large quantity during a given period than necessary. Because patients have no opportunity for face-to-face interactions with their pharmacist or personal follow-up to make sure they are continuing to properly take their medications, or the physician changes the medication, mail order prescriptions produce a volume of costly, unused medication waste.
• Medication disposal events around the state of Michigan continue to report to MPA that many of the medications returned are from mail order prescriptions. This waste drives up the base prescription costs by requiring patients to purchase more than they need and then throw away the rest.
• These unused medications also pose a significant prescription drug abuse threat, allowing a greater potential for misuse of the patient or the patient’s family. Mail order medications are also delivered to a mailbox or door, creating a potential for theft and inappropriate use.
• This prescription waste is an environmental concern, as well. With the growing number of studies showing traces of medications in the water supply and ground soil, mail order waste helps propel this growing issue.

HB 5772 would define and regulate entities that manage pharmacy benefits, providing powers and duties for state departments and agencies. 

This legislation would do the following:

• Require Pharmacy Benefit Managers (PBMs) to obtain a certificate of authority from the Office of Financial and Insurance Regulations (OFIR)
• Disclose to the Commissioner any agreement with a pharmaceutical or device manufacturer that would favor the manufacturer’s products or devices
• Disclose to the Commissioner any agreement that would switch the drug or device prescribed by the patient’s health care provider with a drug or device agreed to by the PBM and the manufacturer
• Disclose to the Commissioner any agreement or practice to bill the health benefit plan for prescriptions at a cost higher than that which the PBM pays the pharmacy
• Advise the covered person that the PBM is regulated by OFIR and that they have the right to file an appeal or grievance with the Commissioner
• Require that when substituting a higher cost drug rather than that drug prescribed, it must be made for medical reasons
• Not allow PBMs to retroactively deny or adjust claims paid after seven days from adjudication
• Not allow PBMs to intervene in the delivery or transmission of a prescription to influence the prescriber’s choice of therapy or patient’s choice of pharmacy
• Not allow PBMs to sell prescription drug data

Mail Order Implications:

• Mail order is not necessarily less expensive. Many PBMs own their own pharmacies and have been caught paying themselves more for mail order prescriptions than what they reimburse local Michigan pharmacies for the same medications.
• Mail order is not always good for patients. It fragments care for patients with several illnesses and doctors; prescriptions get lost in the mail or are delayed in delivery; and there is a potential of theft from mail boxes and doorsteps.
• Patients and employers deserve true pharmacy choice at no added cost.
• Mail order is outsourcing prescriptions, jobs and tax dollars, detrimental to Michigan and local economies.

House Bill 5547 would amend the Michigan Public Health Code and would require the pharmacist in charge to provide coverage to residents of an institution when the pharmacist is not on site, and regulate use of emergency drugs and medication drug kits.

Currently:

• a caregiver or health professional in medical institutions administers medications authorized by the prescriber on the resident’s “chart order.”
• certain entities are not recognizing this “chart order” as equivalent to a valid prescription order.
• the pharmacies that provide medications to these medical institutions comply in the same manner as pharmacies located on site in other medical institutions (i.e., health-systems).
• there are often situations in these facilities where residents require immediate care that may easily be provided by contingency or emergency drug kits, particularly for residents who cannot wait until the next day to receive their medications.

This proposed legislation would amend the Michigan Public Health Code to:

• clarify the definition of an institutional pharmacy.
• recognize the “chart order” or the medication order as a valid prescription.
• define the use of contingency or “emergency drugs” as those which are required to meet the immediate therapeutic need of a resident of a medical institution.
• recognize the medical institution nurse as the agent of the prescriber.
• ensure accurate and efficient administration of medications to residents and prevent diversion of controlled substances stored and administered in these facilities.

Medication therapy management (MTM) is a key pharmacy component of health care reform. The following are talking points that reinforce the importance of pharmacist-provided MTM and the impact it has on patient care and cost-savings.

• We as pharmacists are committed to our patients and improving their health and well-being. Including pharmacist-led medication therapy management in health care reform puts patients first, keeps them safe and reduces costs.
• Through medication therapy management, we help our patients effectively manage all of their medications and treatments through review, counseling, collaboration with other health professionals and follow up.
• Medication therapy management keeps patients safe by ensuring that all of their medications are working properly together and are not dangerously interacting with each other. It also puts patients in the driver’s seat of their health by helping them be proactive in setting therapy goals and pharmacists following up to be sure that patients get the most from their medications.
• Medication therapy management has also been proven to help patients reduce their health care costs, which is so critical in this economy. Patients who are receiving medication therapy management services from their pharmacists are often spending less on medications because a pharmacist is continually making sure their therapy is still effective. Also, patients are more likely to remain committed to their medication regimen, which improves their health and reduces their overall costs by preventing future issues.