Merritt: Survey Shows Drug Plans Are Paying Promptly, Working Collaboratively with Pharmacies

(Washington, DC)— A Medicare survey has found that 18 of the top 20 Medicare drug plans pay pharmacies on twice-a-month billing cycles of 15 days or less, with most claims being paid within 21-25 days, according to congressional testimony presented yesterday by the Centers for Medicare & Medicaid Services (CMS), the Pharmaceutical Care Management Association (PCMA) said today.

“CMS’ finding that Medicare drugs plans are paying pharmacies promptly — every two weeks or less — underscores our plans’ commitment both to saving seniors money and to working collaboratively with pharmacies,” said PCMA President Mark Merritt. “These findings demonstrate that the Medicare drug benefit is working largely as Congress intended â?? seniors are enjoying a wide range of plan choices with deeper-than-expected discounts and pharmacies are seeing regular payments from plans.”

According to written testimony presented yesterday to the House Energy & Commerce Subcommittee on Health, a CMS survey has found the following:

18 of the top 20 Medicare prescription drug plans (PDPs) pay pharmacy claims on a twice-a-month billing cycle of 15 days or less. These plans account for more than 90 percent of drug coverage for Medicare beneficiaries. A 15-day billing cycle generally provides pharmacies with payment in 21-25 days.

“A clear majority” of PDPs are paying pharmacies well within the 30-day industry standard.
PCMA represents five of the 10 national Medicare PDPs. PCMA member companies have pledged to pay pharmacies submitting clean electronic Part D claims within 30 days. A 30-day standard is consistent with how doctors and hospitals are paid under Medicare Parts A & B, prompt payment laws in 43 states, and the federal employees’ health plan. PCMA member companies process tens of millions of pharmacy claims every month. A 30-day standard helps improve quality, ensure accuracy of payments, and combat fraud and abuse.

PCMA believes strongly that CMS’ findings undermine the drugstore lobby’s chief argument for new legislation that would go far beyond industry claims-payment standards and impose “one-size-fits-all” rules for medication therapy management (MTM) programs. Earlier this week, PCMA released a study from the Moran Company finding that prompt pay and MTM provisions in S. 2563 would increase costs to seniors and the Medicare program by at least $9 billion over ten years. The study was conducted by Steve Lieberman, Partner at the Moran Company, and the former lead health analyst at the Congressional Budget Office (CBO) from 1999-2004. Mr. Lieberman also served as Senior Advisor to the CMS Administrator and helped write the regulations implementing the Medicare Modernization Act.

While S. 2563 would add substantial costs to the Medicare program, PCMA requested an examination of this proposal because it appears to be less onerous than the other, more extreme measures pending in Congress, including two other bills, HR 5182 and HR 5166. PCMA believes strongly that both these bills would increase costs even more than the Senate measure and that the $9 billion in added costs is the minimum cost of the various drugstore lobby proposals. For example, HR 5182 would mandate a dispensing fee of $14 for every generic prescription dispensed under Medicare and HR 5166 would require 10-day payment cycles for Medicare pharmacy claims.

A link to the CMS testimony from yesterday’s hearing can be found at http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1864

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through small businesses, Fortune 500 employers, health insurers, labor unions, and Medicare Part D.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605