U.S. rejects Md. plan to give uninsured a drug discount

October 05, 2006|By M. William Salganik | M. William Salganik,Sun reporter

The federal government has rejected the state's application to offer prescription medicines at Medicaid prices to low- to moderate-income uninsured adults, state and federal officials said yesterday.

The plan would have provided discounts to an estimated 37,000 people with incomes under about $20,000, Susan Steinberg, chief operating officer for the Medicaid program in the state Department of Health and Mental Hygiene, said yesterday.

The federal Centers for Medicare and Medicaid Services (CMS), which had approved a similar Maryland discount pharmacy program for seniors several years ago, rejected this one because the state was financing its share of the program with money from rebates from pharmaceutical companies. Pharmacy rebates are not "a legitimate source of state matching funds" under Medicaid rules, said Mary Kahn, a CMS spokeswoman.

Vincent DeMarco, president of Maryland Citizens' Health Initiative, which proposed the discount program, said the state should have been able to craft an application CMS would approve.

"The state dropped the ball, and is denying 40,000 Marylanders substantial drug discounts," he said.

DeMarco said the law approving the discount program - passed unanimously by the 2005 General Assembly - authorized state general funds to be spent to support it.

The fiscal note to the 2005 legislation shows $1 million in state funds and $1.7 million from CareFirst BlueCross BlueShield to be spent over four years. That would have been matched with $2.7 million in federal funds, according to the fiscal note - which is why CMS approval was necessary.

Under the program, uninsured adults would have been able to purchase prescriptions at discounts of about 40 percent, DeMarco said.

Steinberg said the health department had worked hard to win approval. She said the department had a "major win" when CMS approved another waiver last year, allowing pharmacy discounts for adults with incomes up to about $12,000. She said the department would now consider whether other funds could be made available for the pharmacy discount program, and, if so, could reapply to CMS.

The state's application represented an effort, common for states, to seek to use the purchasing power of the Medicaid program - and the federal matching funds that come with it - to provide full or partial health coverage for the uninsured.

State and local governments have also sought other ways to mitigate prescription costs. Anne Arundel County and Baltimore City, for example, offer discount cards through a private company that negotiates lower prices with pharmacies. The Anne Arundel health department calculated participants save 29 percent off the retail price.

Others have sought to allow patients to buy drugs from Canada, where government price controls result in lower costs than U.S. retail. Such "reimportation" of drugs is not legal; federal officials say it isn't safe because the drugs could be counterfeit or tainted.

This week, however, federal customs officials said they would stop their policy of seizing small quantities of drugs being shipped from Canada.

"We just decided to focus our resources differently," said Lynn Hollinger, a spokeswoman for the U.S. Customs and Border Protection agency, according to the Orlando Sentinel in Florida.

In recent months, customs agents had seized 40,000 packages of medications. The new policy is effective Monday.

bill.salganik@baltsun.com

The Orlando Sentinel contributed to this article.

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