NCPA Endorses Bipartisan Bill to Address Egregious Pharmacy Audit, Reimbursement Tactics in Medicare

PRESS RELEASE

Alexandria, Va. May 7, 2013 - Bipartisan legislation that would let pharmacists devote more time to Medicare beneficiaries and less to haggling with drug benefit middlemen over clerical issues and below-cost payments for generic drugs was introduced in the U.S. Senate and won the backing of the National Community Pharmacists Association (NCPA) today.

"Patients trust independent community pharmacists for the expert medication counseling and other services that they provide, such as immunizations and diabetes counseling," said B. Douglas Hoey, RPh, MBA. "Unfortunately, these pharmacist, small business owners face an increasing number of indefensible barriers to providing the level of care that their patients deserve and have come to expect. Often this is due to the unchecked authority that pharmacy benefit managers (PBMs) have over community pharmacies. This bipartisan legislation would achieve a more balanced business relationship between PBMs and community pharmacies and thereby allow pharmacists to continue putting patients first in health care."

The Medicare Prescription Drug Program Integrity and Transparency Act (S. 867) was introduced by U.S. Senators Mark Pryor (D-Ark.) and Jerry Moran (R-Kan.). It would focus pharmacy audits on uncovering actual fraud and abuse, bring transparency to generic drug reimbursement rates and give Medicare beneficiaries additional privacy and other protections.

First, the bill would rein in abusive audit tactics and ensure that any legitimately recouped funds are passed on to Medicare, not pocketed by middlemen. While Part D pharmacy audits are necessary to detect fraud and abuse, drug plan intermediaries such as pharmacy benefit managers (PBMs) are abusing this process by singling out expensive drugs and using typographical and other trivial errors to recoup from pharmacies significant amounts that are not always necessarily returned to the Medicare program. Twenty-four states have adopted similar legislation.

"When a pharmacist gives a patient the right medication at the right time, at the right cost, it should not be a punishable offense," Hoey said. "Audits, of course, must be conducted, but they should not be exploited by middlemen at the expense of Medicare and the taxpayer."

Second, the bill would increase transparency into generic drug payment rates. To continue serving most patients, pharmacists must sign contracts with Part D plans and/or PBMs. However, the contracts are non-negotiable and do not disclose the terms and conditions regarding payments for most generic drugs, which account for nearly 80 percent of drugs dispensed. Increasingly, pharmacies are being paid below their costs to dispense and the reimbursement limits, or Maximum Allowable Cost (MAC), is not updated frequently to reflect generic drug price spikes. The legislation would allow a pharmacy to know how its individual MAC rates would be determined (but not those of other pharmacies in that particular health plan's pharmacy network) and require payments to be updated more frequently to keep pace with actual market costs.

Third, the bill would give Medicare beneficiaries additional privacy protections and greater choice of pharmacy. PBMs could not transmit personally identifiable utilization or claims data to a PBM-owned pharmacy unless the patient has voluntarily elected to fill their prescription at such pharmacy. In addition, PBMs would be banned from requiring that a beneficiary use a retail or mail order pharmacy in which the PBM has an ownership interest.

"We commend Senators Pryor and Moran for their work on this legislation," added Hoey. "This bill would address some of the most challenging roadblocks to pharmacists providing even better patient care. Community pharmacists should get engaged at the grassroots level and encourage their Members of Congress to support this legislation."