Opportunities To Reduce Fee-Basis Pharmacy Costs

HRD-83-83: Published: Sep 27, 1983. Publicly Released: Sep 27, 1983.

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GAO reviewed the Veterans Administration's (VA) efforts to reduce the number and cost of prescriptions filled by private pharmacies on a VA-reimbursable fee-for-service basis.

GAO found that, in fiscal year 1982, VA paid private pharmacies about $10.5 million in prescriptions for veterans with service-connected disabilities. VA determined that only about 5 percent of the fee-basis prescriptions needed to be filled by private pharmacies. Such prescriptions cost VA about twice as much as prescriptions filled through VA pharmacies. GAO noted that, although VA is making progress in reducing the percentage of fee-basis prescriptions filled by private pharmacies, over 20 percent of those prescriptions were filled by private pharmacies at six facilities contacted by GAO.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: VA contends that this recommendation is contrary to its policy to provide eligible veterans full outpatient care and services appropriate to their needs.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should establish priorities for providing outpatient prescriptions to veterans with no service-connected conditions based on the veterans ability to pay for prescriptions from private sources.

    Agency Affected: Veterans Administration

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should reemphasize, to clinics of jurisdiction, the importance of having Medical Administration Service clerks review fee pharmacy prescriptions to ensure that payments do not exceed the limits established by the VA prescription schedule.

    Agency Affected: Veterans Administration

  3. Status: Closed - Not Implemented

    Comments: VA contends the administrative burden of prioritizing based on the veterans' service-connected classification would more than offset the savings. This is consistent with its philosophy, discussed in the report, that once a non-service-connected veteran is deemed eligible for care, VA is obligated to provide all needed services, including prescriptions.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should direct VA clinics of jurisdiction to fill prescriptions for non-service-connected conditions only if the clinic's staff and facilities are not needed to fill prescriptions for veterans with service-connected conditions, including those fee-basis prescriptions for nonemergencies.

    Agency Affected: Veterans Administration

  4. Status: Closed - Implemented

    Comments: VA postponed a decision on this recommendation until the Department of Health and Human Services (HHS) decides on the future of the Medicaid MAC program. Although an internal HHS group recommended action, the Secretary, HHS, had not yet accepted that recommendation as of January 1985.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should revise VA drug reimbursement policies to incorporate Medicaid maximum allowable cost (MAC) provisions.

    Agency Affected: Veterans Administration

  5. Status: Closed - Implemented

    Comments: Available VA data indicates that, while some improvement has been made, at least 19 of the 80 clinics still do not fill enough fee-basis prescriptions in-house.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should revise the fee-basis manual to direct VA clinics of jurisdiction to instruct veterans to send prescriptions for nonemergencies to VA for filling and to deny payment for subsequent prescriptions of veterans disregard the request.

    Agency Affected: Veterans Administration

  6. Status: Closed - Implemented

    Comments: The VA MPI Manual, part I, was revised to incorporate this recommendation. The manual was issued to the field on February 12, 1986.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should direct VA clinics of jurisdiction to have pharmacists review fee pharmacy prescriptions to identify duplicate prescriptions, excessive quantities of drugs, and prescriptions that should have been filled by the VA pharmacy.

    Agency Affected: Veterans Administration

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should establish a system for periodically monitoring clinics of jurisdiction compliance with fee-basis pharmacy policies and procedures.

    Agency Affected: Veterans Administration

 

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