NESCSO and Myers and Stauffer LC survey finds $10.59 is median cost of dispensing medications to Medicaid beneficiaries in New England

March 21, 2017

A recent survey of New England pharmacies found the median cost to dispense one prescription to a Medicaid beneficiary is $10.59. The survey was completed by the New England States Consortium Systems Organization (NESCSO), a nonprofit organized by the health and human service agencies of the New England states and UMass Medical School, in partnership with the accounting firm of Myers and Stauffer LC.

State Medicaid agencies have been directed by the federal Centers for Medicare and Medicaid Services (CMS) to review the way they pay pharmacies for dispensing medications. New rules released in January 2016 require states to adopt fee-for-service pharmacy payment policies designed to pay pharmacies for the cost of acquiring the drugs as well as an additional professional dispensing fee. The survey results will help each state Medicaid program determine an appropriate professional dispensing fee.

“I am grateful for the effort undertaken by NESCSO to procure a vendor to conduct the cost of dispensing survey for my state and the New England region as a whole,” said Herman Kranc, RPh, medical administration manager, Division of Health Services for the Connecticut Department of Social Services. “The process was organized and efficient, providing a high level of value for my state.”

Efforts to promote survey participation and pharmacy cooperation led to an overall survey response rate of 71.8 percent. Surveys were distributed to approximately 2,900 Medicaid-enrolled pharmacies across New England in early September 2016.

Myers and Stauffer reviewed completed surveys to ensure completeness, accuracy and reasonableness. The average cost of dispensing per prescription for each pharmacy was calculated using appropriate accounting standards. The $10.59 per prescription is the median value, weighted by Medicaid prescription volume.

A comprehensive report detailing the survey methodology as well as regional and state-specific averages for the cost of dispensing prescriptions was provided to NESCSO and member states.

This joint effort of New England states is the first of its kind in the nation. Undertaking a regional survey allows states to save money and time, and provides comparable data.

“I was pleased with how the project was able to move forward in a timely manner given that each of the six states has their own perspectives and needs,” said Margaret A. Clifford, RPh, pharmacy director, Office of Medicaid Services, New Hampshire Department of Health and Human Services.

The New England States Consortium Systems Organization (NESCSO) is a non-profit corporation organized by the New England state health and human service (HHS) agencies and the University of Massachusetts Medical School. NESCSO’s Board is composed of the member states’ HHS secretaries or their designees. NESCSO’s mission is to foster communication and collaboration among its members through information sharing and joint projects. NESCSO seeks to support the needs of the state HHS Secretaries by providing a framework for knowledge exchange in order to maximize policy, program and cost effectiveness. Annually NESCSO convenes the Medicaid Enterprise Systems Conference and markets “MAGI in the cloud” for states to use in determining income eligibility under the Affordable Care Act.

Myers and Stauffer LC is a Certified Public Accounting firm with 18 offices nationwide and over 700 employees. The firm is strongly focused on assisting government health care agencies with audit, rate-setting, program integrity, consulting and other support services. Since the late 1970's, Myers and Stauffer has performed over 100 Medicaid pharmacy cost of dispensing surveys in more than 20 states. The firm is also a leader in assisting state Medicaid programs with pharmacy reimbursement based on actual acquisition cost. In addition to working with state Medicaid programs directly on actual acquisition cost reimbursement, Myers and Stauffer has been the contractor to CMS since 2011 to develop and maintain the National Average Drug Acquisition Cost (NADAC) benchmark.

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