NCPA: Medicare Addresses 'Short-Cycle' Dispensing Fees at LTC Pharmacies

February 10, 2015

The National Community Pharmacists Association today praised a Medicare final regulation to discourage Medicare Part D prescription drug plans from paying long-term care pharmacies lower, prorated dispensing fees for "short-cycle" prescriptions.

PRESS RELEASE

Alexandria, Va. Feb. 9, 2015 - The National Community Pharmacists Association (NCPA) today praised a Medicare final regulation to discourage Medicare Part D prescription drug plans from paying long-term care (LTC) pharmacies lower, prorated dispensing fees for "short-cycle" prescriptions.

The Centers for Medicare & Medicaid Services (CMS) announced that the policy will take effect for the 2016 plan year. In 2010 Congress enacted legislation intended to expand the use of short-cycle dispensing (i.e., less than a 30-day supply of medication) to reduce medication waste in LTC settings. However, after the policy was implemented in 2013 some Part D plans cut LTC pharmacy dispensing fees, even though the prescriptions require just as much work by the pharmacist. NCPA has repeatedly urged CMS to prohibit this practice.

"Medicare has done the right thing for patients, for LTC pharmacists and to reduce medication waste," said NCPA CEO B. Douglas Hoey, RPh, MBA. "We applaud CMS officials for responding to the concerns that NCPA has raised time and again. Community pharmacists play a critical role to promote the proper use of medication, whether for seven days or 90, and they should be compensated adequately for it."

LTC pharmacies in particular face unique challenges that make it more expensive to provide care and medication to their patients. NCPA-commissioned research found that LTC dispensing costs are 25 percent higher than those of traditional retail pharmacies.

In March 2014 NCPA wrote to CMS in support of its proposal to address the problem and urged the agency to finalize it, saying "NCPA supports the CMS proposal to prohibit payment arrangements that penalize efficient LTC dispensing techniques. NCPA first brought the issue of such payment arrangements to CMS' attention in a letter dated December 18, 2012. At that time, and still today, several of the largest Part D plan sponsors prorate dispensing fees, including for all generics and non-solid oral doses dispensed to nursing home facilities. As pharmacy's costs do not decrease when dispensing a smaller day supply, there is no incentive with these models to dispense a shorter day supply, rather, the opposite may apply."

In 2011, NCPA established a Long-Term Care division and added staff resources to help ensure that the views of independently owned LTC pharmacies are heard by federal and state policymakers.