A Simulation of the Effect of the Medicaid Payment Lag on the Financial Position of Community Pharmacies

Abstract

Medicaid was enacted in 1965 to bring poor people into mainstream health care. Outpatient drug coverage is a Medicaid service for which pharmacists are paid a dispensing fee and reimbursed for product cost. Pharmacists in Illinois have recently expressed concern over the length of time (“payment lag’) to be reimbursed for services rendered to Medicaid patients. In this paper a simulation model is presented which examines the effect of payment lag on pharmacy financial viability and secondarily the implications of this for society in terms of access to pharmaceutical products and services and the quality of services provided.