Law to Make Prescriptions Tamper-Proof Raises Concerns

Newly passed legislation intended to clamp down on Medicaid prescription fraud will require physicians to begin using electronic prescribing or tamper-resistant prescription pads for their Medicaid patients as of Oct. 1.

The law, which is part of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007, will deny federal reimbursement to states for Medicaid patients' prescriptions that are not written on tamper-resistant prescription pads. The law aims to save the Medicaid program money and prevent patients from illegally obtaining controlled drugs.

The law cannot be implemented, however, until final regulations from CMS have been published. At this time, CMS has not yet published even proposed rules for implementing the measure.

According to HHS, 13 states already have implemented a similar requirement. Federal budget estimates indicate the requirement will save $510 million in Medicaid prescription fraud over a 10-year period.

Physician and pharmacy advocates have hoisted early red flags on the requirement, warning that the law provides too little time to prepare for implementation, may result in additional administrative burdens and costs for physicians and pharmacists, and likely discourages physicians from caring for Medicaid patients. Moreover, earlier attempts at reducing Medicaid fraud with tamper-resistant pads have proven ineffective.

"Most states should be concerned because of the added cost," said Tom Banning, director of government relations at the Texas AFP. "It's unknown who would bear the burden of the cost. It introduces more administrative hassles into a system that already grossly underpays, and it creates another disincentive to participate in Medicaid, which is really the overarching concern we have with this."

Mary Ann Wagner, R.Ph., senior vice president of policy and pharmacy regulatory affairs for the National Association of Chain Drug Stores, or NACDS, agreed.

"We are very concerned about this (pending) CMS provision," she said, adding that the Oct. 1 deadline doesn't allow time for states to implement any pending regulations or for printing companies to ensure an adequate supply of tamper-resistant prescription pads. "It will be very difficult to implement because of the tight time frame. It will require a huge effort educating physicians."

If the law is fully implemented, said Wagner, physicians may want to write all their prescriptions on tamper-resistant paper "rather than try to remember who are Medicaid beneficiaries and who are not."

But the law may not have as harsh an impact on family physicians as critics fear, say some observers. Florida began requiring tamper-resistant prescription pads several years ago, with little fallout on physician practices, according to Tad Fisher, EVP of the Florida AFP.

"In the initial days, there was some concern," he said. "It was not as big an issue as we thought it would be. Now we don't hear any complaints.

"The bigger and growing concern is poor Medicaid reimbursement for physicians. Adding more barriers, like forcing doctors to use counterfeit-proof pads without providing better reimbursement, just makes it easier for doctors to leave Medicaid. They can’t afford to care for Medicaid patients now. If it is going to cost them more money to provide care in the way of practice expenses, they will stop seeing Medicaid patients," said Fisher.

Pharmacists have an interest in ensuring physicians comply with the law, according to Wagner, which she said likely stems from the pharmacists' expectation that federal auditors will enforce the prescription pad requirements at the pharmacy level.

"They will come into the pharmacy and look at the Medicaid prescriptions to double-check whether they were written on tamper-proof paper," she surmised. "Then they will deny federal (Medicaid) funds to the states" for prescriptions that don't meet the requirement.

NACDS has urged CMS to delay implementing the requirement, saying neither prescribers nor pharmacists would be ready "for such a drastic change" by Oct. 1.

Among NACDS concerns are