How Might the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 Affect the Financial Viability of Rural Pharmacies? An Analysis of Preimplementation Prescription Volume and Payment Sources in Rural and Urban Areas

Journal of Rural Health

Presents descriptive information on mail-order prescriptions, volume, and payer type of retail prescriptions in rural vs. urban areas. Together, these data provide a baseline for evaluating how implementation of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) may affect the financial viability of rural independent pharmacies. The authors found that the volume of mail-order prescriptions is small. Rural providers prescribed fewer retail and mail-order prescriptions per person, but more units per person. Rural areas have a higher percentage of prescriptions paid for by cash (18% vs. 13%) and Medicaid (16% vs. 10%) and a lower percentage of third-party payers than urban areas. Significant variation in volume and payer type exists between states. The authors conclude that rural, independent pharmacies may be negatively affected by MMA implementation as business shifts from cash to third-party reimbursement. The high degree of variation between states also has potentially important implications for the implementation of Prescription Drug Plan regions under MMA.

North Carolina Rural Health Research and Policy Analysis Center
Erin Fraher, Rebecca Slifkin, Laura Smith, Randy Randolph, Matthew Rudolf, George Holmes