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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: May 9, 2016 12:25 PM
From: Representative Frank A. Farry and Rep. Steve Samuelson
To: All House members
Subject: UPDATE: PACE Expansion and Pharmacy Modernization Act
This updated memorandum replaces a cosponsorship memo that was circulated on April 22.

The General Assembly has long debated increasing the income limits to expand the PACE program. Current maximum income requirements for the PACE program are $14,500 for a single individual and $17,700 for a married couple. For PACENET, the maximum income requirements are $23,500 for a single individual and $31,500 for a married couple. We are happy to announce a compromise with the Department of Aging to increase the maximum income limits in the PACENET program from $23,500 to $31,000 for a single person and from $31,500 to $41,000 for a married couple.

In addition, on April 1, 2016, CMS finalized the Medicaid Covered Outpatient Drugs Rule and published the final AMP-based FULs (Federal Upper Limits) as enacted by the ACA. The Final Rule does several things:
  • Changes the way Federal Upper Limits (FULs) are calculated to an Average Manufacturer Price (AMP); effective last month, the AMP-based FULs will substantially cut pharmacy reimbursement in the PACE program (as well as Medicaid).
  • The Final Rule also requires states to move from traditional ingredient cost benchmarks (i.e., AWP or WAC plus a % markup) to acquisition cost-based reimbursement, namely AAC (Average Acquisition Cost) or National Average Drug Acquisition Cost (NADAC) for reimbursement by April 2017.
  • In an effort to rebalance the cut in ingredient cost by moving to AAC or NADAC, CMS has also strongly recommended that states re-examine pharmacy dispensing fees and pay a professional dispensing fee that accurately reflects a pharmacy’s cost to dispense.
Our legislation would remove the AMP-based FULs from PACE’s reimbursement calculation, and replace it with National Average Drug Acquisition Cost per unit (NADAC), plus a professional $13 dispensing fee.

Additionally, this bill would allow the PACE program to evaluate two pharmacy-based programs: Medication Therapy Management (MTM) and Medication Synchronization. Under MTM, a patient’s pharmacists would work face-to-face with the patient to complete comprehensive medication review as well as consult with their various prescribers, carefully checking for duplicative medications and possible drug interactions. The pharmacist would also consult the patient to determine their adherence to their drug regimen and provide patient education aimed at improving their compliance. MTM is already offered under PART D, so allowing it in PACE would make it consistent for PACE patients no matter the payor. There is clear evidence that MTM improves health and brings down program costs. The MTM program in Ohio Medicaid saw a $2.17 return on investment for every $1 spent in its second year. Medication Synchronization would allow pharmacists to review multiple patient prescriptions and dispense partial refills with a goal of synching up all their monthly prescriptions so they can be picked up once a month. Not only will this improve seniors’ medication adherence, it would also save them multiple trips to the pharmacy.

Finally, the Department of Aging has a Pharmaceutical Assistance Review Board being changed to an advisory board. Our legislation will reinvigorate the board, make additional changes to the membership and enhance their current advisory capacity.

This legislation has the support of both the Pennsylvania Pharmacists Association and the Pennsylvania Association of Chain Drug Stores.

We hope you will join us in cosponsorship of this legislation.

Introduced as HB2069