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How the Patient Protection and Affordable Care Act Affects Pharmacies

Friday, January 20th, 2017

March 21, 2010 was a historic day in American history, as Congress passed legislation entitled “The Patient Protection and Affordable Care Act.” Two days later, President Barack Obama signed the bill into law, providing healthcare to citizens across the United States.

Supporters celebrated this first major victory in a long struggle to gain some form of universal healthcare in the United States. For patients, the Affordable Care Act could help preserve quality of life and financial security. For pharmacies, the act poses a significant threat to profit-making.

Under the Affordable Care Act, certain small businesses are required to provide some form of health insurance to their employees. If a business fails to comply, it could be sanctioned by the federal government and made to pay heavy fines. The main incentive for complying with the Affordable Care Act is that small businesses become eligible to receive tax credits for providing their employees with coverage.

Hopefully, the Affordable Care Act can reshape the healthcare landscape by identifying which provisions need to be clarified or changed. Pharmacists can increase access to care and prevent further illness by reducing medication costs. Below are four ways that the Affordable Care Act affects pharmacies.

Part D: The Donut Hole

Under the current wording of the Affordable Care Act, Medicare Part D or the “donut hole” will be phased out over many years. Medicare Part D offers various discounts and rebates that have been designed to provide senior citizens more access to medication. A third party contractors specified by the act will pay certain discounts directly to pharmacies. All healthcare plans must pay 14 days after a claim has been submitted.

In some cases, pharmacies have an opportunity to obtain grant money in exchange for providing medication therapy management services to patients. This provision is meant to lower the payment gap by offering an incentive that increases appropriate medical care for ailing patients. The grant provider defines the criteria for eligibility for this program.

The Affordable Care Act requires all pharmacies to have a benefits manager on staff to clarify certain aspects of healthcare plans to patients. Many of the questions pertain to financial information with respect to Medicare Part D and the newly created state run health insurance exchange. Having a knowledgeable healthcare attorney can help pharmacies remain on track with this part of the Affordable Care Act.

DME accreditation regulations

Some pharmacies that offer durable medical equipment (DME) through Medicare may not have to follow accreditation requirements. This exemption does not apply to those pharmacies that wish to partake in a competitive bidding process.

The criteria for qualifying for a DME accreditation exemption includes many provisions. This exemption only applies to pharmacies that have been in enrolled with Medicare for at least five years. Billing for DME must be five percent or less of a pharmacy’s prescription sales. Pharmacies must have an absence of adverse fraud and abuse allegations during the past five years. The DME billing percentage is determined by looking at the three year average of all billings and must be less than five percent of the pharmacy sales. Each pharmacy is also required to submit all documentation to verify their eligibility prior to being allowed the exemption.

Payments for medications

One area that was addressed in the Affordable Care Act was fixing how Medicare reimburses all pharmacies for selling generic drugs. Prior to the legislation, the amount of reimbursement offered to pharmacies was often below their actual acquisition cost. The impact of this change will improve the yearly Medicare payment that pharmacies receive from the government.

The adjustment has also expanded the number of covered entities that are eligible to receive drug discounts under the 340B program. However, the discount does not apply to hospital patients. The new guidelines help covered entities make new deals with multiple pharmacies that use their services.

Reducing medication waste in pharmacies

The Affordable Care Act requires Medicare Part D participants to better engage in dispensing medicine to patients while reducing drug waste. This plan was created in 2012 and all medical facilities are required to take a look at how they dispense medicine to Part D enrollees. All within the industry are trying to reduce the amount of medication that is wasted on a daily basis. The risk in this new endeavor is that pharmacies are required to dispense drugs at a more frequent rate. There is no requirement to add an increased dispensing fee to the charges to balance the increase.

It is unclear how this law will affect pharmacies in the future. No one in the industry can predict how the implementation of the regulations will change. The federal government must provide some guidance on healthcare issues that pertain to pharmacies.

All pharmacies should have the resource of an experienced healthcare attorney to help them navigate the complexities of the Affordable Care Act. If you would like to learn more about how the Patient Protection and Affordable Care Act may affect your organization, contact Brown & Fortunato P.C. today. Call us at (806) 345-6300 or Contact Us by email to learn more about our services. You can also visit us in person at 905 S. Fillmore St., Suite 400 in Amarillo, Texas.

This information is subject to change. Please check for updates that are more recent than the published date of this article.