FMI Praises Senate Approval of Delay in a Flawed Medicaid Reimbursement Formula

ARLINGTON, VA — July 10, 2008 — The Food Marketing Institute (FMI) praised the Senate for passing legislation late yesterday by a vote of 69-30 that delays a Medicaid drug reimbursement formula that could close down more than 11,000 pharmacies, including many operated by supermarkets.

     “The biggest winners in this vote are the low-income Americans in rural and inner-city areas whose pharmacies are most likely to close,” said Cathy Polley, FMI vice president of pharmacy services. “Now Congress has the opportunity to craft a reimbursement formula that enables these pharmacies to stay in business.”

     The measure, titled the Medicare Improvements for Patients and Providers Act of 2008 (H.R. 6331), delays until September 30, 2009, the implementation of the Average Manufacturer Price (AMP) reimbursement formula. Government, academic and industry studies agree that this formula would cause pharmacies to lose money when dispensing generic Medicaid prescriptions.

     The legislation also helps pharmacies by speeding reimbursement for Medicare Part D claims to 14 days for those submitted electronically and 30 days for those submitted by other means. The current reimbursement time often exceeds a month.

     The Senate approved legislation that the House passed in June by a vote of 355 to 59. President Bush has threatened to veto the measure over other issues, but the margin by which the bill passed in the House and Senate is more than enough to override a veto.