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Pharmacists feel shortchanged by U.S.

A report backs their assertion that Medicare Part D payments don't cover costs, they say.

January 11, 2008|From the Associated Press

Pharmacists say a government report released Thursday validates their concerns that payments under the Medicare drug benefit are driving some of them out of business.

The report from the Health and Human Services inspector general showed that pharmacies are able to charge insurers about 18% more than what they pay for medicine. Also, the pharmacists get a dispensing fee of about $2.27 per prescription.

But the Assn. of Community Pharmacists said that spread was not enough to cover all their expenses, such as wages, taxes and utilities.

The association said an independent pharmacy typically needs to be reimbursed at about 20% to 21% above its acquisition costs just to keep its doors open, said Mike James, the group's government affairs director.

James said that more than 1,100 pharmacies closed last year, and many blame the reimbursement rates under Medicare Part D, which provides coverage for the elderly and disabled.

The inspector general's report made no recommendation on whether the reimbursement rates were adequate. Under the program, beneficiaries get coverage through private insurers. The insurers negotiate with pharmacists the rates that they'll pay for a Medicare customer's prescription.

The inspector general's report noted that the dispensing fee for each prescription filled under Medicare Part D is about $2 less than what pharmacists get when serving the poor on Medicaid.

The report was requested by 33 members of the Senate. Many pharmacists had complained that payments are too low under Part D. The lawmakers are expected to seek more information from the inspector general.

Medicare officials said they were pleased to see in the report that Part D payments to rural pharmacies were nearly identical to those in urban areas.

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