Study shows state impact of Medicaid cuts
Study shows state impact of Medicaid cuts

By Sean Murphy

Published: June 2, 2008

OKLAHOMA CITY - A federal plan to reduce Medicaid reimbursement rates for local pharmacies could result in the closure of more than 20 percent of the state's pharmacies, a new study shows.

An estimated 166 pharmacies in Oklahoma, about 22 percent of the state's pharmacies, could close as result of the Deficit Reduction Act of 2005, according to the study by PricewaterhouseCoopers. The study was sponsored by the National Association of Chain Drug Stores and the Food Marketing Institute.

"These cuts threaten to diminish access to medications and pharmacy services, and they also threaten the vitality of communities across Oklahoma," said NACDS President and CEO Steven Anderson. "Pharmacies are the face of neighborhood health care, but these cuts could wipe these faces away, particularly in rural and urban areas with higher Medicaid populations."

Both the NACDS and Food Marketing Institute have mounted a legal challenge against the federal proposal, and an injunction has been issued to prevent the new rules from taking effect. Both groups also are pushing Congress to ease the cuts on Medicaid reimbursement rates.

Jeff Nelligan, a spokesman for the Centers for Medicare and Medicaid Services, questioned the validity of the report and said it relies on unreliable data.

He said Medicaid makes up only 9.1 percent of national drug spending, and a small reduction in this percent of revenue would have an overall reduction of less than 1 percent in pharmacy revenues.

"It's puzzling to think that such a tiny reduction translates into a 22 percent of Oklahoma pharmacies going out of business," Nelligan said. "The fact is, we need to restore accountability and fiscal integrity to the Medicaid program so that we can deliver quality health care to our beneficiaries."

Phillip Woodward, executive director of the Oklahoma Pharmacists Association, said the reduction in Medicaid reimbursement rates would hit smaller, independent pharmacies the hardest, particularly those in rural areas with higher Medicaid populations.

"They're stuck out in the cold, simply because they do a lot of Medicaid business in rural Oklahoma," Woodward said. "They're worried, and we're just trying to get folks up in Washington to listen to us."

Woodward said pharmacies most likely to close are those in small towns.

"We could certainly see a bunch of them close," Woodward said. "Some of those small towns may have a Wal-Mart, but when you start dealing with towns with 1,500 or 2,000 people, without a pharmacy, those folks are going to have to get in their car and drive 35 or 40 miles to get their medications."

Copyright 2008 The Associated Press.

Your thoughts!