New CMS rules for diabetes testing supplies stymie community pharmacies

November 12, 2013

CMS' new rules for fees, mail order, and delivery of diabetes testing products have created big challenges for patients and the community pharmacists who used to deliver their supplies.

On July 1, the Centers for Medicare and Medicaid Services (CMS) put into effect new regulations governing fee schedules and mail order or delivery protocols for diabetes testing supplies provided to Medicare patients. The fee schedule was lowered considerably, but new dictates that prevent home delivery of supplies from local pharmacies are causing some consternation.

Medicare beneficiaries with diabetes who cannot or do not choose to pick up their testing supplies at their local pharmacies must now use a national mail-order supplier. Local pharmacies are not allowed to deliver testing supplies to patients even when delivering other products to patients’ homes or to assisted living facilities where they may reside.

Most Medicare patients were warned about the changes, and the vast majority appear to have adjusted to them, but independent pharmacists have reported many problems to the National Community Pharmacists Association (NCPA). The association has been collecting complaints about the new delivery rules and has been advising pharmacists to tell patients to complain to CMS about problems they are having.

The new rules are part of an expansion of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding program, which regulates supplies for diabetes testing such as glucometers, test strips, and lancets. The program was rolled out in nine areas of the country in January, and it was expanded to 91 metropolitan areas in July. The changes in payment structure, according to CMS, are expected to result in savings of an average of 72% over previous payment schedules. For example, the fee schedule for 100 lancets and test strips went from $77.90 a month to $22.47 a month.

CMS was contacted, but declined to comment. A CMS representative stated that information on the program could be found at the agency webpage DMEPOStoolkit.

Dealing with the changes

Several patients of Dominic Bartone, RPh, president of Hock's Pharmacy and Medical Supply in Vandalia, Ohio, have encountered problems since the rollout of the program. Mail-order companies have told patients that they do not supply certain glucometers and test strips, even though the companies won bids on those products, he said.

Even when customers and their physicians are willing to switch products, the products that mail-order firms stock may be uncommon ones.

“A person who falls short by a couple of days with their testing supplies cannot come in to my store and get them. Some of these brands that were bid on I have never even heard of,” Bartone said. He estimated that his pharmacy used to deliver test strips and lancets to between 700 and 800 patients.

Many of Bartone's patients had depended on his staff for help with their supplies, turning to them for education and information on blood glucose testing. If necessary, Bartone's staff went to patients' homes to teach them how to use their glucometers, he said. Now patients must come to the store if they want training.

“These people range from people who are blind, people in wheelchairs with no legs, people in assisted-living facilities, and people who have no other means of transportation to get their supplies,” he said.

Even when they accept Medicare assignment, some mail-order companies require patients to have a credit card number on file, which can be a barrier for people who do not have credit cards and need to pay by check or money order, Bartone said.

Some patients dislike using mail order, Bartone added. "They say, 'I don't want to deal with it and I just want to get my supplies.'"

Bartone noted that he was matching the lower, mail-order fee schedule for his patients.

"If Medicare had just cut the cost and allowed delivery, they would have saved the same amount," he said. "I feel we are fragmenting our healthcare system and potentially causing these patients more harm - and possibly causing them to end up in the hospital because they are doing without supplies."

NCPA continues to advocate

NCPA fought implementation of the new CMS rules and is continuing to advocate for changes to the ban on deliveries.

“For the past few months, we have been working diligently to overturn the prohibitions on home delivery,” said Ronna Hauser, PharmD, vice president of policy and regulatory affairs for NCPA, Alexandria, Va. There was no reason why home deliveries should not be allowed for pharmacies meeting the Medicare fee schedule for testing supplies, she said.

Patients in assisted-living facilities may be affected even more adversely, since they may not have relatives or friends who can pick up supplies for them, Hauser said. Since pharmacies make regular deliveries to assisted living facilities, there is no reason why patients in those facilities must arrange for their supplies to be mailed to them, she said, adding, "We have shared our concerns about this with CMS."

In addition to the delivery issue, there have been some questions about mail-order companies switching customers to less common brands of glucometers and testing strips, Hauser said. "Sending the wrong strips for the wrong glucometer is not beyond the realm of possibility," she added.

Small chain offers mail order

One small pharmacy chain, Kohll's Pharmacy and Homecare in Omaha, Neb., has gone through CMS's competitive bidding process, had its bid accepted, and is now offering mail-order services nationally for diabetes testing supplies. Since it launched the program, Kohll’s has seen its base of diabetes patients rise more than 1,200%.

The chain has seven pharmacies in the Omaha area and one in Iowa. The company already had mail-order experience through its subsidiary, Essential Pharmacy Compounding, said Laurie Dondelinger, marketing director for Kohll's.

Kohll's was informed early in 2012 that its bid to be a contract supplier had been accepted by CMS, Dondelinger said. “It was basically crunch time from then on, because there was so much planning and research we had to do,” she said.

The company enlarged its staff to ensure that it had enough people to answer patients’ questions and handle orders, she said. “Some [mail-order suppliers] do not have pharmacists or diabetes experts to answer questions. We wanted to focus on that to set us apart.”

She continued, “This is why we did this. We didn't want our patients to go to companies that didn't have the knowledge or the care.” Many of the mail-order companies that had bids accepted by CMS are not pharmacies, she said.

Some companies that sell diabetes supplies by mail order operate under several names. “From day one in 1948, we have been a pharmacy. That is why we wanted to focus on giving good patient care.”

Rejected bids

Some big pharmacy chains submitted bids for diabetes testing supplies that CMS rejected. Walgreens was not among the winning bidders, and the chain discontinued its mail-order program for diabetes supplies this summer, said Ric Leonardi, RPh, director for Medicare Part B for Walgreens.

“We were in contact with each of our mail-order customers and worked with each to transition them to their local retail store so that they could continue to get supplies uninterrupted,” he said. He has heard no reports of problems from Walgreens mail-order customers who chose to go to other mail-order suppliers, he noted.

Among patients accustomed to receiving deliveries from local pharmacies, Leonardi speculated, the number having a problem with a national mail-order company is probably quite low.

Purchasing power

Most independent pharmacies are not able to bid successfully in the process set up by CMS, said NCPA’s Hauser. “They just don’t have the size or the purchasing power to meet the demands of the program."

However, said Bartone, there is a way around the ban on delivery of testing supplies. Customers can sign a waiver known as an “advanced beneficiary notification of noncoverage” (ABN). This waiver states that the patients have chosen to receive the supplies and will accept financial liability. Medicare then permits the pharmacy to bill the beneficiary, he said.

There is a bill in Congress intended to reverse the rules against delivery, Hauser said. Rep. Peter Welch (D-VT) has introduced the Diabetic Testing Supply Access Act (H.R. 2845), which would allow community pharmacies to provide same-day delivery services of diabetes testing supplies.

"It is a piece of legislation that costs nothing. We have high hopes on getting this piece of legislation passed," Hauser said.

The shakedown period

The system is still in its infancy. Most people with diabetes who use mail order receive supplies for three months at a time, and their first three months’ worth supplies are just starting to run out, Walgreens' Leonardi said, adding that problems might not have shown up yet. Hauser agreed that problems might start to crop up as second and subsequent orders are put through.

Such problems may decrease over time, however. Dondelinger pointed out that the first three months constituted the shakedown period, when many patients had to be enrolled at the same time.

“Now, the only new people will be the ones who are newly diagnosed or just getting on to Medicare,” she said.

Valerie DeBenedette is a medical news writer in Putnam, N.Y.