Effect of the Medicare Prescription Drug Improvement and Modernization Act on the bottom line

An historical perspective on the impact of the Medicare Prescription Drug Improvement and Modernization Act (MMA) on pharmaceutical reimbursement, and the financial bottom line at health systems and various strategies to use in the inpatient and outpatient setting to improve the bottom line are described.

Implementation of MMA has affected the entire healthcare continuum by reducing pharmaceutical reimbursement rates and health system revenues and increasing prescription drug copayments, emergency department visits, and hospital admissions. Physician-owned clinics are less profitable than in the past because of MMA, which may prompt clinic closures and shift the patient care burden to clinics at public hospitals. Negotiating carve-outs for costly drugs and evaluating the feasibility of obtaining outlier payments can improve the bottom line in the hospital inpatient setting. Ensuring that billing codes are accurate and verifying that reimbursement was received can help minimize the impact of MMA on the financial bottom line in the outpatient setting. Negotiating favorable purchasing contracts and ensuring that drugs are used appropriately by following evidence-based guidelines can improve the financial bottom line in both the inpatient and outpatient settings.

Strategies to decrease drug acquisition costs and increase reimbursement rates can help minimize the adverse impact of MMA on the financial bottom line at health systems.