Short-cycle dispensing applies to pharmacies serving LTC

January 14, 2013

For pharmacists serving long-term care facilities, January 1st was the start date for the requirement that many Part D medications are to be dispensed in increments of no more than 14 days.

For anyone who hasn’t focused on the issue, the new rule says such pharmacies, “must dispense solid oral doses of brand-name medications to enrollees in such facilities in no greater than 14-day increments at a time,” according to the National Council for Prescription Drug Programs (NCPDP).

NCPDP cautions that these, “Appropriate Dispensing Requirements,” or the short-cycle rule as they have been nicknamed, apply to all pharmacies that dispense to long-term care facilities, including retail and mail-order pharmacies.

The rule, intended to reduce waste, was made final by the Centers for Medicare and Medicaid Services (CMS) in a Federal Register notice, April 15, 2011.

Asking questions

If they have not already done so, pharmacists should ask the facilities they serve how they want to receive their medications under Medicare Part D, says Teresa Strickland, technical advisor for standards development for NCPDP. For example, one question might be if they want them in 7- or 14-day increments.

Another issue is whether they want to do the same increment for all drugs or just the required brand oral solid drugs. For instance, will they include generics at the increment level? Will they have all patients at that level or just Medicare Part D patients?

Some of the drugs excluded from the rule are things that have to be in the manufacturer’s original packaging or antibiotics for short-term use, Strickland notes.

NCPDP planned to have a survey of pharmacists on their readiness for the rule.

NCPDP’s analysis, she says, found there are advantages and disadvantages to pre-dispensing billing, post-dispensing billing or bill as dispensed, so there was no recommendation on how to bill.

Carol Sirianni, RPh, vice president of AmerisourceBergen, a pharmaceutical services company, notes that just weeks before the January 1st deadline a number of drug plans had not released the reimbursement rates for short-cycle dispensing. This left pharmacies to make last-minute decisions on how best to implement it. Group purchasing organizations had been negotiating the contracts for their members.

The short-cycle dispensing issue could be revisited with CMS as the industry learns more about how it is working out, she says.

Strickland says pharmacists also need to ensure that their software can handle the submission of multiple submission clarification codes; that they can submit special packaging indicators; and that they can submit the patient’s residence code because those will be required to determine whether a claim is for short-cycle dispensing.

NCPDP published new values in 2011 in its external code list and it expected to publish guidance dealing with the use of submission clarification codes on its “Public Documents” under “Resources” on its website.

In general, she says, the rule is, “a lot more complicated than it sounds like, because you have to know the excluded drugs and there is really not a list of excluded drugs.”

In its Federal Register discussion of its final rule, CMS said, “Although we are prohibited from intervening between negotiations between Part D plans and pharmacies, we do expect that dispensing fees will increase with the increased number of dispensing events in a billing cycle up to a point.”

CMS notes, “We also believe that appropriate dispensing fees that differentiate among the various dispensing methodologies could incentivize more rapid adoption of the most cost-effective technologies and effectively align facility, plan sponsor, and public interest in minimizing costs associated with unused drugs.”

Plans in motion

As of mid-November there were a few plans already accepting claims with the submission clarification codes, says Strickland.

Sirianni says that with the conversion to generics and the number of branded medications used likely to decline in 2013, the biggest question she has is how much savings short-cycle dispensing of brands will realize.

On the other hand, Strickland says that many in the industry feel that eventually the rules will expand to cover all medications, depending on how many pharmacies actually put generics under short cycle.

Kathryn Foxhall is a healthcare journalist based in the Washington, D.C. area.