The National Association of Chain Drug Stores and the National Community Pharmacists Association have endorsed legislation that would set Medicare standards for pharmacy audits and reimbursement by pharmacy benefit managers (PBMs).

National Association of Chain Drug Stores, NACDS, National Community Pharmacists Association, NCPA, PBM audits, pharmacy audits, pharmacy benefit managers, PBMs, Cathy McMorris Rodgers, Medicare Pharmacy Transparency and Fair Auditing Act, H.R. 4215, Steve Anderson, B. Douglas Hoey, RxImpact Day, pharmacy reimbursement, MAC, maximum allowable cost, reimbursement caps, community pharmacy, community pharmacists, independent pharmacies, Russell Redman

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Pharmacy groups back bill to rein in PBM audits

March 21st, 2012

ALEXANDRIA, Va. – The National Association of Chain Drug Stores and the National Community Pharmacists Association have endorsed legislation that would set Medicare standards for pharmacy audits and reimbursement by pharmacy benefit managers (PBMs).

NACDS said Wednesday that it has sent a letter to Rep. Cathy McMorris Rodgers (R., Wash.) to express its support of the bill she introduced, the Medicare Pharmacy Transparency and Fair Auditing Act (H.R. 4215).

The endorsement comes as pharmacy advocates converge on Washington, D.C., today for NACDS RxImpact Day on Capitol Hill, in which they'll engage in over 300 meetings with lawmakers and their staff to discuss key issues for community pharmacy. Participants in the two-day event include NACDS members, pharmacists, pharmacy students and chain pharmacy leaders.

According to NACDS, the Medicare Pharmacy Transparency and Fair Auditing Act would require PBMs to provide pharmacies with vital information on reimbursement for life-saving drugs and community pharmacy services to Medicare Part D beneficiaries. The bill also would foster the use of proper pharmacy audit standards for PBMs contracting with the Part D program and promote transparency and prevent the inappropriate denial of pharmacy reimbursement, the association said.

"Despite their claims to the contrary, PBMs drive up prescription drug costs through their opaque practices, restrict consumers' choice of pharmacy and use gimmicks to deny payments to pharmacies," NACDS president and chief executive officer Steve Anderson stated in the letter. "Nothing is more important to chain pharmacy than the health and safety of their patients. We stand with you in your commitment to protecting the well-being of senior Americans."

Anderson added that the legislation would also prohibit reduced pharmacy reimbursement arising from clerical or recordkeeping errors, and ban extrapolation or other statistical methods to unfairly calculate pharmacy reimbursement and penalties.

"Your legislation will ensure that PBMs do not keep for themselves any payments recovered from their audits and that such payment recoveries are returned to the prescription drug plan (PDP) sponsor," he wrote to McMorris. "Your legislation is an important step toward fully reining in the egregious practices of the PBMs."

Meanwhile, NCPA said the bill would preserve patient access to independent community pharmacists and address abusive pharmacy auditing practices.

"This legislation would help ensure that local pharmacists can continue providing expert medication counseling and other pharmacy services to help seniors get the most out of their medication therapy," NCPA CEO B. Douglas Hoey said in a statement

NCPA noted that McMorris Rodgers' legislation would give pharmacists some insight into a "black box" of pharmacy reimbursement: a Part D plan's maximum allowable cost, or MAC.

According to the association, independent pharmacies must evaluate "take it or leave it" contract offers from Part D plans or PBMs that "leave pharmacists in the dark" about how reimbursement caps (MACs) are determined for many common generic drugs. As a result, independent pharmacies are increasingly — and without warning — reimbursed at rates that fluctuate and fail to cover the pharmacy's cost of dispensing the drug or the medication's acquisition cost, the group said.

In addition, the bill would take aim at unfair pharmacy audits by Part D plan sponsors or their designees, NCPA said. Currently, community pharmacists are compelled to take time away from serving patients to grapple with a patchwork system of Part D auditing requirements, the association explained, adding that auditors routinely recoup large sums from pharmacies over narrow technical or clerical issues.

Also on Wednesday, NACDS applauded the approval of legislation in Indiana to check PBM audit practices. Indiana Gov. Mitch Daniels (R.) signed Senate Bill 407 after the state legislature passed the measure last week.

Both NACDS and NCPA last week hailed the Utah state legislature for passing the Pharmacy Audit Integrity and Recovery Act (H.B. 76), sponsored by State Rep. Evan Vickers (R.). The legislation would mandate audits involving clinical or professional judgment to be conducted by or in consultation with a pharmacist, and with 10 days advanced written notice.