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In the late 1960’s, the Texas Pharmacy Association, took advantage of the Federal Medicaid Statute and was the sole leader in the profession to convince the Texas Legislature that those entitled to Medicaid assistance should have a drug program. The result of the Program would keep hundreds of people out of emergency rooms, which up to that time, was the principal way those people could obtain their drugs.  After two very difficult legislative sessions, the Association, with the leadership of its Executive Director, Legal Counsel and a dedicated membership, were able to successfully persuade the Legislature to enact the Vendor Drug Program for those who were entitled to Medicaid in Texas.  At the same time, they were able to get the Program initially funded so that it could become operational quickly.  Since those early years, the Program has involved pharmacists and pharmacies in this federal-state-funded opportunity, resulting in literally millions of people in Texas being able to obtain their drugs under a well-defined program that has become, in later years, a model for other states to emulate.

The Program has become very complex, both with respect to participation and reimbursement.  The Association has acted as a “watchdog” especially in the areas of Vendor Drug reimbursement, and over the years, has taken the leadership role in being sure that reimbursement was both accessible to the recipients of Medicaid and fair to the pharmacist participants as healthcare providers.

As with all programs, there has become an enormous amount of regulation that affects both participation and reimbursement.  Likewise, as with any major healthcare program, there have been excellent examples of professional responsibility undertaken by the pharmacists of Texas to provide this invaluable service.  The Program has been recognized by both healthcare professions, as well as the Legislature, as a “first line of defense” for recipients of Medicaid benefits.  Unfortunately, there have been those who have participated in the Program and who have been involved in illegal activity, making it difficult for the vast majority of participants to abide by more stringent rules and regulations.  The massive regulations have not been confined just to pharmacists, but have been spread to operations of various drug companies, pharmacists and pharmacies involved in the Vendor Drug Program.  In that particular area, the Attorney General has been very active in recouping substantial amounts of  improper payment activity in the Program.  Unfortunately, pharmacists and pharmacies who have not been involved in any fraud, have been investigated.

Likewise, this kind of negative activity has resulted in investigations and more recently audits that will involve pharmacists and their pharmacies, with severe and costly penalties if determined to be actual violations of the rules, regulations and laws that govern this Program.

Also as with any large federal and state program, many pharmacists in Texas who appropriately handle their relationships with the government as required, are caught up in the investigative areas that have now been established in the federal and state government that deal with this Program.  Pharmacists can be eliminated from the Program for serious violations of these rules and regulations, and can be prohibited from participating for years, or maybe forever.  Often times there are mistakes made by the audit investigators whereby the pharmacists need to protect themselves from improper audit procedures and/or findings.

Selection of legal assistance in this area is critical and important.

Vendor Drug Program