Programs To Control Prescription Drug Costs Under Medicaid and Medicare Could Be Strengthened
HRD-81-36
Published: Dec 31, 1980. Publicly Released: Jan 30, 1981.
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Highlights
The Department of Health and Human Services (HHS) established two programs to contain the costs of prescription drugs under Medicaid and Medicare by setting upper limits on the amounts that could be reimbursed. One program, the Maximum Allowable Cost (MAC) Program, pertains to multiple-source drugs and is applicable to Medicaid and Medicare. The other program, the Estimated Acquisition Cost (EAC) Program, pertains to all drugs and is applicable only to Medicaid. GAO looked into the effectiveness of these programs in five States and obtained information on the effectiveness of State drug substitution laws nationwide.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to provide for the systematic and formal updating of the MAC limits. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to encourage the States to review the Federal MAC limits to determine whether a lower statewide MAC would be reasonable and appropriate. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to encourage the States to determine the package sizes most commonly purchased by pharmacists and adjust their EAC levels accordingly. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to encourage the States to determine drugs for which it is appropriate to establish EACs based on direct purchase prices and then do so. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to recover from California and Florida the Federal share of excess costs attributed to the delays in implementing the MAC limits. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to encourage the States to review their EAC drug limits to identify drugs that would be suitable for the MAC multiple-source approach on a statewide basis. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to require State claims processing systems to identify drug costs ineligible for Federal sharing through implementation of the recently enacted amendment in S. 1177 or under existing authority. |
Closed
Please call 202/512-6100 for additional information.
|
| Department of Health and Human Services | The Secretary of HHS should direct the Administrator of HCFA to reevaluate the applicability of the MAC Program to the inpatient hospital setting with the view toward eliminating the existing regulatory and administrative structure which is not being enforced or focusing on the forms or types of drugs which would make the structure worthwhile. |
Closed
Please call 202/512-6100 for additional information.
|
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Topics
Disadvantaged personsDrugsElderly personsstate relationsHealth care costsHealth care servicesMedicaidMedicareState lawPrescription drugs