Jeff Hedges, the Pharmacy Compliance Guide is back discussing the IMPACT repealing the Affordable Care Act (ACA) will have on the Pharmacy Industry. 

Question: Now that the Republicans have control of both houses and the White House, they are going to Repeal and Replace the Affordable Care Act (ACA) or Obamacare. What does this mean?

Answer: The current system is broken, mainly because the government and the insurance companies worked together to write this law to control health care payments to health care practitioners. Patient care and the health care practitioners were not factored into the law.

Question: Will the new healthcare law contain the popular portions of the ACA?

Answer: Before the ACA was created, both the Republicans and Democrats agreed that pre-existing conditions, children staying on their parent’s health insurance until the age of 26 as well as many small portions of health care that benefit patients and providers. In fact, 80% of the ACA had been mutually agreed upon by everyone before the law was enacted. However, over the last eight years, this fact has been forgotten.

Question: So why is the ACA considered to be so bad?

Answer: ACA eliminated competition and fixed pricing for practitioners. Then turned over the management of health plans to the insurance carriers with no oversight on premiums. This eliminated competition by the mergers of insurance companies. Now there are only six national insurance carriers who set their premiums and control the market. 

Question: What can we expect with the new changes to health care?     

Answer: 2017 insurance policies have already been written, so there will be no changes for current policies. However, depending on what changes are made in the first half of 2017, 2018 may have a completely different look for health insurance.

Question: What can we expect the first changes to be made in our healthcare?

Answer: Interstate competition. Enabling insurance companies to compete across state lines will have a dramatic effect on insurance premiums.

Health care practitioners will be involved in the development of the new regulations so the focus is on health care to the patient and the patient / doctor relationship. This concept alone will redefine the entire health care program in the United States. The simple concept of patient driven care rather than cost driven care will be the most radical change.

Question: We hear about practitioners, especially pharmacies, who are being reimbursed below their acquisition prices, is this true and if so, how are healthcare facilities able to stay in business?

Answer: Yes, as insurance premiums continue to climb, reimbursement to providers are being cut. Especially in the pharmacy industry. 75% of generic drugs are reimbursed at or below acquisition price. The insurance companies have also imposed a Direct / Indirect Remunerations (DIR) fee that is clawed back 60 days after the reimbursement is made. This can be a flat fee or a percentage and it fluctuates, this makes it difficult to plan your cash flow. This fee has forced thousands of pharmacies out of business.

What key points need to be addressed as the Affordable Care Act is repealed and replaced- points to keep if speaking to members of Congress

Before the ACA was created, both the Republicans and Democrats agreed that pre-existing conditions, children staying on their parent’s health insurance until the age of 26 as well as many small portions of health care that benefit patients and providers. In fact, 80% of the ACA had been mutually agreed upon by everyone before the law was enacted. However, over the last eight years, this fact has been forgotten.

Critical points that are hurting pharmacies and patients

1. Pharmacy Benefit Managers have:
   1. Established a regulatory empire with no over-sight
   2. Established reimbursement rates for pharmacies with no input on acquisition prices
   3. Worked in collusion with insurance companies
   4. Set price fixing with other PBMs
   5. Have no transparency, even with mandatory state laws requiring transparency

1. Direct / Indirect Remunerations (DIR) fees
   1. Were initially established under the ACA as a quality payment to pharmacies for providing quality patient services
   2. Let health insurance attorneys working with HHS the ability to change definitions within the ACA, to change the quality payments to a DIR fee. The DIR Fee is an after service fee (insurance tax) deducted or clawed back normally 60 days after the reimbursement. This is either a percentage or flat fee that also changes from carrier to carrier and throughout the year. This has the most detrimental effect on pharmacies’ cash flow and consequently forces them out of business.

1. Mandatory Mail Order
   1. Insurance carriers increasingly force patients into the insurance company’s mail order pharmacy.
   2. Prescriptions are auto-filled/auto-shipped without patient consent
   3. Patients become overwhelmed with excess medications and DME products
   4. Medicare/Medicaid/Tri-Care are the payors who are the end losers who pay for extra fees for services not needed.

1. Orthotic Products moved to Off-the-Shelf
   1. This single move has caused rampant fraud throughout the country
   2. The current practice allows the mail order companies to advertise in all forms of media. A patient contacts the supplier who matches them with a physician over the phone. Physician writes prescription and sends to the mail order medical supply company who then ships the product to patient. No medical necessity is required. Thousands of new fraud cases are occurring every month.

1. Competitive Bidding has:
   1. Drastically reduced patient access to DMEPOS products
   2. Reduced reimbursements for DMEPOS products leads to cheaper products being dispensed therefore, affecting the quality of care

 Conclusion

-It’s a great time to be in pharmacy and a better time to be looking into accreditation to be able to add the most amount of services and reimbursements to your bottom line. 

Connect with Jeff today: 

R.J. Hedges & Associates

163 9th Street PO Box H  New Florence, PA 15944  

Phone: (724) 357-8380