NCPA: Medicare Should Standardize Reporting of Part D Prices


Beneficiaries, CMS, Taxpayers would benefit from uniform approach.


Beneficiaries, CMS, Taxpayers would benefit from uniform approach

Alexandria, Va. Jan. 30, 2015 - Medicare's proposal to ensure Part D plan sponsors consistently report "negotiated price" should be implemented because it will help the government and beneficiaries as well as plan sponsors make better apples-to-apples comparisons among the many prescription drug plans available to seniors, the National Community Pharmacists Association (NCPA) said in comments filed with the Centers for Medicare & Medicaid Services (CMS).

Some Part D plan sponsors have manipulated how and when to report certain price concessions received from or incentive payments made to pharmacies related to drugs dispensed to Medicare beneficiaries. Such manipulation has resulted in an unlevel playing field as the price of a drug out-the-door from a given pharmacy to a beneficiary can appear higher or lower on the Medicare Plan Finder depending on how and when certain payments and discounts are accounted for by Medicare Part D plans.

As a result, Medicare beneficiaries may be relying on inaccurate data when using the Medicare Plan Finder website to compare the cost of filling a prescription among competing pharmacies and drug plans. In addition, CMS' ability to oversee plan sponsors and pharmacy benefit managers (PBMs) to protect taxpayer funds from misuse is greatly undermined.

"Standardizing how and when payments or price concessions given to pharmacies by Medicare Part D plans are reported allows for a more consistent picture of the total cost of a drug out-the- door from a pharmacy under a given Medicare Part D plan to all Medicare stakeholders—plans, CMS and beneficiaries—from plan-to-plan and pharmacy-to-pharmacy," NCPA said in its comments. "This method allows beneficiaries to more easily compare plans and also levels the playing field for all Medicare Part D plans and pharmacies committed to delivering the Medicare Part D benefit to such beneficiaries."

PBMs receive undisclosed revenue streams from pharmacies (labeled "network access fees", "DIR fees", "credentialing fees", etc.). Conversely, PBMs may make conditional, incentive payments to certain pharmacies. Without uniform reporting standards, neither of these payments, which can certainly be determined at the point of sale, may be reflected in the "negotiated price" and appropriately reported by Part D plans.

NCPA's comments noted CMS has more than sufficient statutory authority to implement this change. Arguments that the CMS proposal violates the "non-interference" clause of the underlying Part D statute are unfounded. Under the proposal, plan sponsors, PBMs and pharmacies remain free to negotiate any reimbursement arrangements that they chose, so long as they are consistently reported to CMS.

Moreover, precedent exists for the proposed regulation as CMS has previously had to take action concerning "negotiated prices." In early 2009 during the final days of the Bush Administration, the agency moved to address discrepancies among PBMs when it came to "lock in" vs. "pass through" pricing, which caused problems in program management and integrity. (For more details on this, read the CMS news release.)

A previous version of the CMS proposal received resounding support from a range of patient advocacy groups, including Families USA, Medicare Rights Center, Center for Medicare Advocacy, National Committee to Preserve Social Security and Medicare, National Council on Aging, National Senior Citizens Law Center, and others. As Medicare Rights Center put it in congressional testimony, standardizing negotiated price reporting, "will not only benefit the Medicare program—and taxpayers—but also improve the accuracy of premium and cost amounts in the Medicare Plan Finder, CMS' online plan comparison tool, allowing beneficiaries to more accurately gauge plan costs and efficiency."


The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of nearly 23,000 independent community pharmacies. Together they represent an $88.8 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 300,000 individuals, including over 62,000 pharmacists. To learn more, go to, visit, or follow NCPA on Twitter @Commpharmacy.

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