Medicare Compliance & Reimbursement

Overlooking this law will guarantee denials

Medicaid may be posed to pack another wallop to profit margins already eroded by Medicare Part D--and there's little time to prepare.

Starting Oct. 1, state Medicaid directors begin enforcing a law that calls for all outpatient Medicaid paper prescriptions to be written on a tamper-resistant pad.

If a beneficiary presents a prescription on noncompliant paper, there's a good chance Medicaid will not reimburse pharmacies. The program can and, in many cases, will deny claims for prescriptions written on paper from pads that don't meet, at a minimum, at least one state-specified tamper-resistant criteria, according to the Centers for Medicare & Medicaid Services.

Beneficiary access will also suffer if the feds insist on implementing the law by Oct. 1, says Rebecca Snead, executive vice president and chief executive officer for the National Alliance of State Pharmacy Associations in Richmond, VA.

"Our main concerns are patient-care related," she says. "Will the beneficiary be denied services for a chronic disease and have negative health consequences while this compliance with correct paper is resolved?"

Others urging CMS to extend the effective date of CMS guidance to state Medicaid directors express the same concern--and they note the financial liability pharmacists will face.

"If an organ transplant patient comes to your pharmacy on a Friday afternoon with a noncompliant prescription, and you dispense as an emergency fill, you're not likely to be able meet the requirements necessary for payment," says Hrant Jamgochian, director of state relations and political action for the American Pharmacists Association in Washington, DC. "That could mean a $1,500 loss for just that prescription."

CMS allows that pharmacists can provide an "emergency fill" of a non-compliant written prescription. But in order to be paid in that circumstance, the pharmacist would have to contact the prescriber and receive a verbal, faxed, electronic or compliant written prescription within 72 hours.

The new federal tamper-resistant pad law affects only paper prescriptions. The new mandate does not affect electronic prescriptions, faxed prescriptions, or prescriptions conveyed by telephone. Prescriptions covered by a managed care plan are also exempt from the law.

It remains to be seen how state Medicaid departments will respond to CMS' Aug. 17 guidance regarding the law. Problems are likely because CMS gave states only about 6 weeks to notify providers, pharmacies and recipients, insiders agree.

Two important efforts to delay implementation of the mandate are already underway:

• The National Association of State Medicaid Directors and the American Public Human Services Association penned a letter to Congress asking for help in securing a delay.

"[We] strongly urge you to delay implementation until Oct. 1, 2008, in order to avoid problems similar to but possibly more devastating than those that arose with Medicare Part D implementation," states the letter. The letter [...]