Medicare Discount Cards: Now Effective, Could Increase Pharmacy Claims Processing

Author: Jason N. Kamalie

This fall, pharmacists may find themselves processing significantly more prescription claims. Beginning in June 2004, over 100 different Medicare-approved discount cards became effective throughout the nation?potentially increasing the number of electronic claims pharmacists can expect to file. When the Medicare Prescription Drug Improvement and Modernization Act was signed into law in December 2003, it introduced prescription drug coverage for 10 million Medicare beneficiaries who had been paying out of pocket for their medicines. Discount card enrollment, which started slowly, continues to pick up speed, so the number of claims processed electronically may increase dramatically.

Pharmacists Looking to Inform Their Customers

Under the new law, qualified Medicare patients will begin receiving prescription drug coverage (Medicare Part D) in January 2006. Until then, beneficiaries may enroll in any of the Medicare-approved plans offered by private companies and organizations, including prescription benefit managers (PBMs), drug manufacturing companies, and retail pharmacy organizations, among others.

Pharmacists should know that the discount plans were required to meet certain Medicare standards designed to ensure that the offering organizations were reputable businesses, experienced in administering prescription drug discounts, and able to provide solid customer service. The discount cards will remain effective until the program expires in January 2006. Members can cancel at any time, but once they select a plan they cannot use other discount cards or prescription drug programs. Thus, pharmacists and their staff members should be skeptical of members presenting multiple discount and/or prescription coverage cards concomitantly for payment of the same claim. Finally, because each card benefits the cardholder only, it will never cover any other member of a family?not even a spouse.

Large Organizations Teaming Up to Offer Best Deals

The specific benefit and membership details will vary for each plan and can change at any time, and the discounts on each drug range, depending on a number of variables. Several major organizations in the prescription drug community are teaming up to offer the best discounts available for their members and the best reimbursement rates for pharmacies. For example, Pfizer (which manufactures 9 of the 50 drugs most commonly prescribed to Medicare patients)? along with Merck, Eli Lilly, Novartis, and United Health Care Insurance Co?are jointly offering the "U-Share" discount card. Members who enroll under the plan can expect discounts ranging from 10% to 40% off covered drugs. Additionally, certain qualified low-income beneficiaries will pay a flat fee between $10 and $30 on a 1-month's supply of some medications. The "U-Share" card does not limit the number of monthly prescriptions members can fill either.

Pfizer, which originally offered the "Pfizer Share" card (a separate discount plan), terminated that plan on August 31, 2004, and encouraged members to switch to the "U-Share" card. Thus, pharmacists should anticipate coverage issues for "Share Card" members who did not switch coverage before the termination date. Pharmacists and their customers can obtain more information by visiting www.usharerx.com or by calling the U-Share enrollment help desk at 800-707-3914. Pharmacists should contact the Medco Health Solutions help desk at 800-922-1557, for claims processing issues, rejections, and pharmacy reimbursement rates.

Express Scripts Inc (ESI), a PBM company, in coordination with the National Association of Chain Drug Stores, offers the Pharmacy Care Alliance (PCA) Medicare Discount Card. Both organizations strove for a discount plan that allowed pharmacies and benefit administrators to work closely together in efficiently implementing and realizing discounts for their members across a broad range of participating pharmacies. The PCA discount card allows members to fill prescriptions at many participating pharmacies, while simultaneously providing excellent support and customer service. Members can expect discounts of up to 20% off brand drugs and up to 40% off generic drugs. Pharmacists should visit www.express-scripts.com, www.nacds.org, or www.pcacard.com or call 800-722-7015 for enrollment information. Claims processing issues, reimbursement questions, and rejections, however, should be directed to ESI's pharmacy help desk at 800-763-5550.

The National Community Pharmacists Association, Computer Sciences Corporation, and the Senior Care Pharmacy Alliance jointly offer the Community Care Rx discount card. Benefiting members and pharmacies alike, especially independent pharmacists, the program does not provide mailorder service. Therefore, pharmacies will not lose the daily business of their customers, who can enjoy the personal, professional contact and advice of participating pharmacists. Pharmacists may visit www.ncpanet.org for more enrollment and reimbursement rate information.

Pharmacy Expectations and Processing Issues

Since the discount cards became effective June 1, there has been little indication as to how smoothly they are being processed at pharmacies. Enrollment and pharmacy help-desk specialists with United, Medco, and ESI have reported that early processing has been routine and unremarkable? that is, no particular rejection codes or claim issues have consistently presented themselves thus far. According to these representatives, most calls about the discount cards have been from pharmacists and members who want to learn more about the plans?and they invite pharmacists especially to call or e-mail for more information.

There are some processing basics to keep in mind, however. According to the help-desk/enrollment specialists, most, if not all, discount cards will include a 9-digit identification number (which may or may not be the subscriber's social security number); a group number that varies with each card; and (possibly) relationship and person codes, along with a BIN number (for electronic transmission). Accordingly, when filing the claim electronically, in almost all circumstances, the "Relation Code" should be designated as "1," indicating "Cardholder," and the "Person Code" should be "01." This should minimize "Non-matched Cardholder ID" and related rejections. Some cards might include the person code ("01") as part of the member identification number, making the complete number 11 or more digits. In that instance, the person code should not be entered into the ID field as part of the identification number. Also, all discount cards will have a "Medicare-approved" logo on the face of the card?any card without it is not part of the Medicare plan.

Cardholders may approach pharmacists with questions about their plans and discount amounts. Pharmacists can direct them to their plan contacts and customer service outlets for any information not readily available on the card or claim. Also, members may ask pharmacists to "predetermine" the discount on certain drugs or ask for a comparison of discounts using multiple cards for the same prescription. Many pharmacists report, however, that with traditional discount cards they can determine the discount price only by filling the prescription and submitting the claim (electronically). If that holds true for Medicare-approved cards, members must use trial and error to find the best prices.

Concerning reimbursement, pharmacists may expect a variety of outcomes. All the plans will reimburse pharmacies using a formula that deducts an assigned percentage from the average wholesale price, or usual and customary price, on any given medication being filled; adds a dispensing fee (usually about $2.50); and makes any other calculations specific to each plan and claim. Generally, though, given the number of Medicare participants, pharmacies can expect to generate significant business filling the prescriptions, as well as offering other retail goods to members shopping in their pharmacies.

Mr. Kamalie is a freelance writer based in Los Altos, Calif.