October 3, 2012

Pharmacist Survey: PBM Practices Affecting Ability to Provide Patient Care

Alexandria, VA—The Medicare Pharmacy Transparency and Fair Audit Act of 2012 ( H.R. 4215) would make pharmacy benefit manager auditing practices more focused on fraud rather than administrative and technical issues and make those audits more consistent among PBMs.

It also would require pharmacy benefit managers to disclose the source of reimbursement to pharmacies for generics and update them no less than every 7 days.

As a strong proponent of the bill, vehemently opposed by the PBM lobby, the National Community Pharmacists Association (NCPA) recently distributed the results of a survey of more than 350 community pharmacists about their recent experience with audits conducted by PBM and Medicare Part D plan intermediaries.

Nearly 87% respondents said that PBM reimbursement and auditing practices are "significantly" or "very significantly" affecting their ability to provide patient care and remain in business, while about 76% said audit requirements across Medicare Part D plans are not consistent, increasing their compliance burden.

"Patients over paperwork; and fair reimbursement practices—that's all these pharmacists are asking for," said NCPA CEO B. Douglas Hoey, RPh, MBA."An estimated $290 billion in costs each year are attributed to the improper use of medication. This legislation would help reduce health care costs by ensuring that local pharmacists can spend more time providing expert medication counseling and other pharmacy services to help seniors get the most out of their medication therapy. H.R. 4215 cuts the red tape, while allowing legitimate anti-fraud efforts to continue."

The survey also asked about generic drug reimbursement caps, i.e., maximum allowable costs (MACs).

Almost all of those responding, 96%, reported that a typical PBM contract has minimal or no transparency on how generic pricing is determined or what the reimbursement rate will be. Almost as many, 92%, said payments are not increased promptly to reflect a drug's rising market costs.

Half of the respondents said that more than 10% of the time, PBMs set MAC reimbursement for generics below the pharmacy's cost of simply acquiring the drug, not even considering dispensing and overhead costs.

Survey respondents identified more than 600 drugs when asked which drugs had MAC limits set below the pharmacy's cost of acquiring the product. Those included common medications such as budesonide, atorvastatin, clarithromycin; fentanyl patches, hydrocodone, and methylprednisolone.

"When a Medicare plan's reimbursement can't even cover the pharmacy's cost of doing business, that plan risks failing at its most basic task: To facilitate the beneficiary's ability to obtain critical prescription medication and counseling on proper use," Hoey pointed out.

The bill, sponsored by Rep. Cathy McMorris Rodgers (R-WA) was sent in March to a House committee for review.

U.S. Pharmacist Social Connect