NCPA Keeps Up Call for PBM Transparency

NCPA continues to be a leading advocate for greater transparency from pharmacy benefit managers (PBMs), and renewed that call in written comments submitted recently to Medicare officials.

The U.S. Centers for Medicare & Medicaid Services (CMS) recently solicited comments regarding its proposed regulation to govern how Medicare Advantage and Medicare Part D prescription drug plans calculate their “medical loss ratios”, which essentially attempt to separate legitimate health care expenses from overhead and profit. NCPA seized on the opportunity to reinforce the need for plans to have greater insight into PBM revenue streams and to ensure that PBMs pay pharmacies fairly for their services.

The rule CMS is attempting to finalize comes as a direct result of provisions included in the Affordable Care Act (or Obamacare).

Mainly, NCPA’s comments sought to reinforce and strengthen provisions Medicare included in its proposed regulation to achieve greater PBM transparency for health plans. Specifically, NCPA urged CMS to:

  • Retain aspects of its regulation which reject arguments by PBM industry representatives
  • Clarify its treatment of prescription drug rebates to prevent potential PBM profiteering in this area
  • Require PBMs to disclose to plans, for each transaction, the difference between what the plan pays the PBM and what the PBM pays the pharmacy
  • Consider required medication therapy management services to be a health care activity, not an administrative one

This rule could have a profound impact on the delivery of health care services and give CMS and enrollees a clearer picture as to where their payments and premium dollars are going. NCPA applauds the agency for supporting enhanced transparency between plan sponsors and PBMs so that plans can better avoid overpaying PBMs for administrative services while at the same time avoid underpaying pharmacists caring for patients.

3 Responses to “NCPA Keeps Up Call for PBM Transparency”

  1. 1 James Cobb April 24, 2013 at 9:52 am

    The Independent, retail pharmacy has been excluded from preferred pharmacy networks in Medicare Advantage and Standalone Part D plans. By law, their is not a level playing field and they are not treated as equals from a reimbursement standpoint. The focus of your efforts should be equality and inclusion in the system.

  2. 2 ncpa1 April 24, 2013 at 1:48 pm

    NCPA agrees (and has consistently advocated) that, at a minimum, all pharmacies should be given the opportunity to join “preferred” network plans. While this particular blog post does not touch on that topic, NCPA has addressed it repeatedly, including in the following recent examples:

    1. NCPA to Medicare: Rein in Egregious Pharmacy Audits; Reform Preferred Networks; and Curb Mail Order Waste in 2014 Prescription Drug Plans
    2. Pharmacists Commend Congress’ Concern over Medicare Preferred Pharmacy Drug Plans
    3. Medicare Addresses Egregious Pharmacy Audits, Preferred Network Plans, and Mail Order Waste in Part D Prescription Drug Plans

    In addition, NCPA members can read insights from NCPA’s CEO on this subject in the April 19 and April 5 Executive Updates.

  3. 3 Shane Schilling June 11, 2013 at 11:09 am

    As a manager in charge of the Medicare program for a statewide hospital system with 10 longterm care facilities serving over 6,500 individuals, we have had over 25 Medicare Part D plans utilized by our beneficiaries since the 2006 implementation. Contracting for our inhouse pharmacies at the facilities has been a challenge. Likewise utilizing a circa 1980’s computer system to adapt to submit claims and receipt payments has also been a challenge. I have had difficulty identifying what Pharmacy Benefit Manager handles the individual plans. Identifying the PBM is important to receiving the 835 electronic remittance advise. I have even had one PBM tell me they do not handle a specific plan, while that plan’s website states that they are contracted with the PBM for 10 years. And calling the PDP directly is a nightmare in that the customer support has no idea of what a PBM is, that is if you can get to a real person through the plan’s phone tree. It would really be helpful if CMS or someone would maintain a “family tree” for the drug plans. Name of plan – Name of company handling the plan – Name of PBM handling the plan – or Name of Claims Processer handling the plan – to even Name of entity on the payment checks (which can be different than either the plan or PBM name).

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