Affordable Care Act

What is the Affordable Care Act?

The Patient Protection and Affordable Care Act, often shortened to (ACA) was enacted and signed into law in 2010. The ACA retained most of the existing Medicaid structure and the employer market, however, individual markets were impacted significantly. Insurers in these markets were required to accept all applicants, and charge the same rates regardless of pre-existing conditions or sex.

The overall goal of the ACA is to reduce the levels of uninsured, improve quality and impose cost containment measures.

How do these changes affect the Pharmacy Industry?

The most significant effects to the pharmacy industry have resulted from an increase in the number of individuals with access to insurance. This is due to increased access to government subsidized health care, self-insurance, employer coverage, and other mandated coverage.

How does the ACA influence innovations in the practice of pharmacy?

The ACA established the Patient-Centered Outcomes Research Institute, which facilitates research and improvements in health care delivery and outcomes.

What else did the ACA change?

Patient Rights: Improvements were made to patient rights and protections including increased benefits and coverage summaries, health care appeals, and preventative care access.
- This was included in the
Insurance Choices: Increased access for consumers through the Health Insurance Marketplace
- Also: CO-OP insurance plans, Pre-existing Condition Insurance Plans, and an increased mandate on young adult coverage.
Insurance Costs: A new rule - the 80/20 rule - created new lifetime and annual limit restrictions and changes to flexible spending accounts (FSAs.)
Medicaid Part D: Medicaid Part D is moving closer to closing the “Donut Hole.”
- A division was created to explore innovations and improvements Medicare and Medicaid.
Increased Coverage: Increased tax credits and incentives for employers, encouraging them to offer coverage for employees.

What are the effects to Medicare Part D?

Since January 1, 2013 Medicare Part D plans have been required to follow revised guidelines regarding the Medication Therapy Management (MTM) reviews and interventions for Part D enrollees.
These practices must be completed by a pharmacist, or other qualified provider.
- Services may be provided in person, or through other communication technologies, as long as they meet the most recent MTM Guidance and Instructions.

What is the Medicare Shared Savings Program?

The Medicare Shared Savings Program facilitates cooperation and improves quality of care for Medicare Fee-For-Service (FFS) beneficiaries.

Accountable Care Organizations(ACOs) are groups doctors, hospitals, pharmacies and other health care providers which work together to provide coordinated care.
Pharmacies can not establish an ACO because they are unable to bill Medicare for primary care services.
- Pharmacies that are enrolled in Medicare can combine with other Medicare-billing service providers to form ACOs.
ACOs are rewarded by lowering the growth of health care costs, while maintaining performance standards.
CMS's Medicare Shared Savings Program FAQprovides more information on this program, including the role of pharmacies.

How does the ACA impact Federal Upper Limits (FUL) and Average Manufacturer’s Price (AMP)?

The ACA changed the definition of AMP to realign reimbursement rates with the actual price pharmacies pay for drugs.

The FUL is calculated by the definition of AMP, which is 175% of the weighted average of AMPs. The recent pharmacy pricing data can be found

What impact does the ACA have on Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs)?

The ACA established a new uniform standard for medical expenses, which went into effect on January 1, 2011. As a result, FSAs and HRAs are only allowed to reimburse over-the counter medicines if they are purchased with a prescription.

Insulin was not included in this rule, and can still be purchased without a prescription.

What effect did the ACA have on the 340B Drug Pricing Program?

As the 340B drug pricing program has increased in size, the number of entitles covered has increased. The Health Resources and Services Administration (HRSA) as of August 28, 2015 published guidance on the changes to the 340B program.

What does the ACA do to address the Part D “Donut Hole?”

The ACA included measures to address the Medicare Part D coverage gap, also known as the “Donut Hole” by phasing in steadily increasing discounts on prescription drugs that fall through the gap. The discounts are set to continue increasing through 2020.

How does the ACA address Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Accreditation?

The ACA created a limited exemption for Pharmacies from Medicare Part B DMEPOS Accreditation.

Federal Resources:

Here are some helpful links and resources to help you understand the impact of the ACA on Pharmacies: