Medicare: “Concerned” About Egregious Pharmacy Audits; Preferred Pharmacy Plan Costs

By Kevin Schweers

Medicare officials are not just alarmed over mail order auto-shipping waste. They’re also concerned about overreaching pharmacy audits and preferred pharmacy plans that are potentially more expensive, not less. NCPA is urging community pharmacists to weigh in before 6 p.m., March 1 to let the feds know they’re on the right track.

In a draft “call letter,” the U.S. Centers for Medicare and Medicaid Services (CMS) has proposed new policies for 2014 Medicare Advantage and Medicare Part D prescription drug plans, or PDPs. In it, they addressed both pharmacy audits that they believe go well beyond anti-fraud efforts as well as Part D preferred network costs. Further below, you’ll find instructions on how concerned pharmacists and others can weigh in on the proposal before the deadline. (You can read about CMS’ mail order waste concerns in our earlier post.)

Egregious pharmacy audits

CMS says: “Discussions between CMS and both pharmacies and sponsors reveal that retrospective audits of previous years’ claims are resulting, in some cases, in complete recoupment of the amount originally paid to the pharmacy when non-financial data on the claim transaction, such as prescription origin codes or prescriber identifiers, are determined to be erroneous. The increasing incidence of these adjustments for “routine clerical errors” rather than incorrect payment amounts (financial errors) may be related to the incentives in contingency reimbursement arrangements with claim audit vendors. We are concerned that the growing practice of post-audit total claim recoupments from pharmacies is distorting Part D payment, as well as compromising Part D data integrity and impairing our ability to oversee the program [emphasis added]. … Therefore, we believe full claim recoupment (followed by PDE deletion) should only take place if the plan learns that a claim should not have been paid under Part D at all; for example, because it is fraudulent. In such cases, it would be correct to remove the record of the transaction from CMS databases because coverage and payment are prohibited under federal law.”

Part D Preferred Network Plans

CMS Says: “We remind Part D sponsors that the regulations that permit lower cost sharing at some network pharmacies also require that such cost sharing reductions must not increase CMS payments to the plans: We have begun to scrutinize Part D drug costs in PDPs with preferred networks, and comparing these to costs in the non-preferred networks, as well as to costs in PDPs without preferred networks. We are concerned because our initial results suggest that aggregate unit costs weighted by utilization (for the top 25 brand and top 25 generic drugs) may be higher in preferred networks than in non-preferred networks in some plans [emphasis added]. Combined with lower cost sharing, we believe these higher unit costs may violate the requirement not to increase payments to such plans. We will be contacting the plan sponsors identified in our analysis to validate our findings in the near future.

“We also remind all sponsors that beneficiary communications concerning preferred networks must be clear and unambiguous. Under no circumstances may sponsors inform [low-income subsidy or LIS]-entitled beneficiaries that they must fill prescriptions at preferred network pharmacies in order to get LIS copays [emphasis added]. This means that both written and verbal communications between plan representatives and Medicare beneficiaries must be differentiated by LIS status, whether through mailings or Customer Service Representative (CSR) scripts.

“We have received a number of questions regarding the imposition of per-claim administrative fees, levied by Part D sponsors or their intermediaries on pharmacies. Some examples we have heard of include charging a pharmacy $1.00 per claim to participate in the sponsor’s preferred pharmacy network or chargeback of the dispensing fee [emphasis added]. Upon consideration, we believe that any POS claims adjustments violate our current guidance on negotiated prices. We have clearly stated that negotiated prices—the amounts on which beneficiary cost sharing and TrOOP calculations, as well as government subsidies are based—must be the amounts ultimately paid to the pharmacy. We do not believe that per-claim administrative fees that alter the price ultimately paid to the pharmacy are consistent with Part D rules.”

Of course, NCPA staff and members have raised these and other problems with Medicare officials, Congress and others repeatedly and applaud efforts to address the issues.

CMS will undoubtedly hear from pharmacy benefit managers (PBMs) trying to assuage the agency’s fears and water down its guidance to plans.

So NCPA is calling on pharmacists to share their first-hand observations, and those of their patients, with these and other problems. NCPA is submitting comments affirming the need for Medicare to take decisive and pro-patient, pro-pharmacist action in these areas.

Submit your views to Medicare officials before 6 p.m. ET Friday, March 1 by clicking here. NCPA has developed a sample letter (available here) for community pharmacists to use as a reference point and personalize with their own experiences.

After reviewing all the comments it receives, CMS is expected to release final 2014 guidance to Part D plans later this spring.

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