PCMA’s Biggest Objections to S.1058/H.R.1971
Aren’t Even in S.1058/H.R.1971
The Pharmaceutical Care Management Association (PCMA), a lobbying group representing prescription-drug corporate middlemen known as pharmacy benefit managers or PBMs, recently released a “white paper” riddled with basic, factual mistakes and misleading statements.
First, some background. Nearly 2,000 independent community pharmacists expressed their concern in a survey by the National Community Pharmacists Association (NCPA) regarding what appear to be overly aggressive pharmacy audits. These pharmacists’ concerns and experiences would indicate that these time-consuming audits compromise patient care and are increasingly geared more toward using technical, clerical errors to generate profits for the PBMs than they are about ferreting out the relatively rare, but still unacceptable, instances of fraudulent activity. (PCMA estimates fraud, waste and abuse to be “approximately 1 percent of prescription drug costs,” though it’s unclear whether or not that includes the major PBMs paying out $370 million in recent years to settle claims of fraud and deceptive practices – with other cases pending.)
The PCMA white paper is a naked attempt to protect windfall PBM profits and executives’ Wall Street-inspired compensation packages. The stated focus of the PCMA white paper is the bipartisan Pharmacy Competition and Consumer Choice Act (S.1058/H.R.1971); but little, if any of the policies criticized in the white paper are even contained in this legislation.
PBM MYTH #1: S.1058/H.R.1971 “would grant pharmacies (even those with wasteful or abusive practices) an advance notice ‘heads up’ before being audited.”
FACT: There is no such provision in either the Senate or House version of the Pharmacy Competition and Consumer Choice Act (S.1058/H.R.1971). It’s true that H.R. 5234, legislation introduced in 2010 during the 111th Congress and endorsed by NCPA, included a provision that would require a 15-day notice before an audit. However, that provision was not included in the currently pending legislation (S.1058/H.R.1971) that was introduced this year and that is the subject of the PCMA white paper. Furthermore, NCPA even called attention to this change in a statement endorsing the new legislation.
PBM MYTH #2: S.1058/H.R.1971 would make payers partner with pharmacies that are banned from federal programs (“Any Willing Pharmacy” policies).
FACT: Again, there is no such provision in either the Senate or House version of the Pharmacy Competition and Consumer Choice Act (S.1058/H.R.1971). As with PBM MYTH #1, in preparing to write this white paper, PCMA appears to have either selectively read S.1058/H.R.1971 or not read it at all. The legislation’s “any willing provider” provision specifically states that, among the eligibility requirements, it only applies to a pharmacist or pharmacy that “has not been excluded from participation in any Federal or State program.” As with the previous example, this is another difference between the old bill H.R. 5234 and the 2011 S.1058/H.R.1971; but a difference that is public record.
PBM MYTH #3: S.1058/H.R.1971 would undermine “authority across Medicare to suspend payments when there is suspicion of fraud” and “reduce payers’ time to verify pharmacy claims before payment.”
FACT: Again, neither provision is contained within S.1058/H.R.1971. During implementation of the Medicare Part D prescription drug benefit in 2005-2006, independent community pharmacists spent countless, uncompensated hours helping millions of seniors resolve problems utilizing their new prescription drug benefit. In recognizing that work, then-Health and Human Services Secretary Michael O. Leavitt noted, “I’ve visited with and heard from pharmacists all over the country. They have been selfless, compassionate, and committed to service. I’ve met pharmacists throughout the country who provided three-to-five day supplies of medicines to beneficiaries without payment—and often no expectation of one—until things could be straightened out.” (Of course, this service to patients often continues today, such as when patients wait for mail order deliveries.)
Even as pharmacists were helping these seniors, they reported having to wait many weeks for reimbursement for their prescription drug and dispensing costs from the sponsors of the Medicare Part D plans, mainly the major pharmacy benefit managers or PBMs. As a result, during this period hundreds of community pharmacies closed, reducing access to pharmacy services and eliminating countless local jobs and tax revenue. Meanwhile, this “float” (the time period between when the local pharmacy filed a claim and when the PBM eventually paid the claim) was used by PBMs to generate interest income that further padded windfall profits. Recognizing this, Congress enacted a bipartisan provision in 2008 to require timely, 14-day reimbursement by Part D plans to keep locally owned pharmacies whole. It is probably factually correct that the PBMs miss keeping those dollars in the bank.
PBM MYTH #4: So-called “Case Studies” of pharmacy fraud, waste and abuse that have been prosecuted by federal law enforcement would be blocked or thwarted by S.1058/H.R.1971.
FACT: Nothing in S.1058/H.R.1971 would stop or deter PBM auditors from identifying and referring to federal prosecutors the very rare and egregious instances of textbook healthcare fraud by pharmacists or anyone else. What this bipartisan legislation would do is prevent the auditors from engaging in unfair abuses of their audit authority. Namely, community pharmacists claim that auditors punish pharmacies severely for trivial issues (e.g., a busy physician misspelling a patient’s name or writing the incorrect date). And then assess enormous “recoupment” charges to the pharmacy, seeking repayment of substantial funds. Further, it’s unclear how much, if any, of these recouped funds are shared with health plan sponsors and patients and how much is simply pocketed by the PBM.