Pharmacy wrestles with Medicare regulations


The Department of Health & Human Services unveiled proposed regulations governing the Medicare Part D prescription drug benefit slated to debut in January 2006.



Pharmacy wrestles with Medicare regulations

The Centers for Medicare & Medicaid Services unveiled the proposed regulations for the Medicare prescription drug benefit—all 1,342 pages—and some pharmacy leaders have been searching for the devils in the bureaucratic details.

The CMS proposed rule addresses everything from the geographic regions the drug plans will serve, to the actual pharmacy card that beneficiaries will carry, to electronic prescribing and medication therapy management. But despite the length of the preamble and rule, the agency is seeking even more input to hammer out the final regulations. And all the parties that stand to gain or lose from the Part D drug benefit have until Oct. 4 to try to tilt CMS their way.

The CMS fine print governing medication therapy management programs (MTMPs) is one of the top priorities for pharmacy. The original law specifically stated that pharmacists may provide such services but other providers could also be utilized. After noting that it is believed pharmacists would be the primary providers, the new rule did state that the individual needs of qualified beneficiaries would determine the provider and setting. CMS left it up to the drug plans to determine the fee structure. However, the rule noted that such fees are to be separate and distinct from dispensing fees and warned that CMS would investigate complaints of nonpayment of fees.

The proposed rule for MTMPs didn't put any more meat on the bare bones of the statute, said Kristina Lunner, American Pharmacists Association director of federal government affairs. She added, "We are very happy they support our understanding of MTMP services, but it's safe to say a lot of questions need to be answered. We think it's critical that chronically ill seniors get access to these services. It looks like CMS heard us."

Playing its cards close to the vest, CMS didn't tip its hand for 2006, said Tom Clark, director of policy and advocacy, American Society of Consultant Pharmacists. He feels the draft rule restated the statute and that 1,000 of the 1,300-plus pages were a preamble asking questions and inviting comment. He added that CMS is caught between potential drug plan sponsors who want flexibility in designing the benefit and everybody else who wants consumer protections built in.

The CMS ground rules for mail-order pharmacy and for beneficiary access to retail pharmacies are the two hot-button issues for chain drugstores, according to John Coster, VP-policy and programs, National Association of Chain Drug Stores. The access standard is of concern because of the possible size of the regions that have to be covered by a plan's pharmacy networks. And it's not clear what CMS means in terms of a beneficiary's distance to the closest pharmacy.

"A huge issue will be the size of the regions because the smaller the region, the better the access to pharmacies will have to be," said Coster. "The larger the regions, the worse for beneficiaries. Plus, they don't define how plans should be measuring traveling distances within each of the standards. For example, is two miles a commercially traveled route or is it distance from home as the crow flies?"

CMS filled in a few gaps in regard to mail order, Coster said, but one area of concern involves beneficiaries having to pay the difference between the prices charged by retail and by mail order for the same quantity. "That doesn't take into account the fact that mail-order firms use rebates from retail to help subsidize mail order," he said. "The definition says that direct and indirect subsidies have to be passed through, but it doesn't say they have to be passed through the channel in which they are earned. So we think that opens it up for them to make their mail order less expensive than retail, which then creates this artificially high price difference with retail, this shifting people to mail order."

The National Community Pharmacists Association did not respond to requests for comment.

Combing through the thicket of bureaucratic language in the proposed Medicare Part D regulations means "it's going to be a long August," said Coster, who added, "Anyone who tells you they read the whole thing is probably lying."

To read the CMS rule, go to Go to the "Highlights" section, scroll down to the proposed rule, and click on the PDF or Text version. To submit comments on the proposed rule, go to; or mail them to CMS, Department of Health & Human Services, Attention: CMS-4068-P, P.O. Box 8014, Baltimore, MD 21244-8014. The deadline for submission is Oct. 4, 2004.

Carol Ukens


Carol Ukens. Pharmacy wrestles with Medicare regulations. Drug Topics Aug. 23, 2004;148:17.

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