The proposed Medicare Prescription Drug Program Integrity and Transparency Act would reform Medicare Part D pharmacy audits and increase transparency in maximum allowable cost lists.
A bill recently introduced in the United States Senate has the potential to help balance the relationship between community pharmacists and pharmacy benefit managers (PBMs), explained speakers on a media call held on May 7, 2013, by the National Community Pharmacists Association (NCPA).
NCPA CEO B. Douglas Hoey, RPh, MBA, explained on the call that Senate Bill 867, the Medicare Prescription Drug Program Integrity and Transparency Act of 2013, introduced by Senator Mark Pryor (D-Ark.) and Senator Jerry Moran (R-Kan.), would make progress on 2 of the organization’s primary goals: reform of Medicare Part D pharmacy audits and increased transparency in maximum allowable cost (MAC) lists.
Medicare audits are necessary to detect fraud and abuse where it exists, Hoey said, but there need to be limits in how PBMs carry them out. “We believe that PBMs are abusing this process by singling out expensive drugs and using typographical and other trivial errors to recoup from pharmacies significant amounts that aren’t always necessarily returned to the Medicare program,” he said. “We think this is somewhat reflective of the relationship between PBMs and pharmacies, that there is an imbalance in that business relationship.”
Hugh Chancy, RPh, owner of Chancy Drugs, which has 4 locations in southern Georgia, described several instances of alleged audit abuse by PBMs. In one case, the PBM revoked payment for a drug that cost $700 because the pharmacy had failed to provide the time of day when the prescription was called in. “That’s just crazy,” said Chancy. “It’s not a state law that they have to write the time on there, but this is a guideline that the PBM has put on us.” In another case, Chancy reported, a PBM challenged a patient’s (valid) signature for a prescription that was delivered to a personal care home and took back payment for the drug and 2 subsequent refills.
According to Hoey, Senate Bill 867 “would begin to address some of the concerns that I have mentioned with audits, especially related to things like typographical errors and trivial errors and to make sure that any true fraud that might exist somewhere is actually returned to the Medicare program, back to taxpayers.”
With regard to MAC lists, Hoey said that pharmacists are forced by PBMs to operate under non-negotiable contracts with reimbursement levels that are not updated to reflect changes in the prices they pay for generic medications. As a result, pharmacies are sometimes reimbursed less for a drug than they paid for it. “There’s no reason in this electronic age that we live in that when a price goes up or down that that price can’t be immediately adjusted, and that doesn’t always happen,” said Hoey.
To illustrate the problem of MAC pricing, Chancy told the story of a post-surgery patient whose medication to prevent blood clots was approved for reimbursement at $300 less than what it cost his pharmacy. “We’ve sent in documentation of what we’ve paid for it and everything, and the insurance company comes back to us and says that’s all we’re going to pay—that’s the maximum allowable cost,” said Chancy. “That’s unfair. We’ve tried multiple sources. We can’t find the drug anywhere close to what they reimbursed.”
Hoey explained that the Senate bill would “require some transparency in maximum allowable cost lists and require updating of those lists on a routine and frequent basis.”
Despite the financial pressures faced by community pharmacies, Hoey said at the end of the call, many pharmacists continue to take up the challenge. “There’s intense pressure, and that is driving some folks out,” he said. “But at the same time, you’ve got some folks who really want to be their own boss, they want to be small business owners, and they want to take care of patients, and community pharmacy ownership is one of the best ways for them to do that.”