New CMS Survey confirms the Top 20 Plans Have Billing Cycles of 15 Days or Less

(Washington, DC)—A new survey released by the Centers for Medicare & Medicaid Services (CMS) finds that Medicare prescription drug plans (PDPs) are paying pharmacists “promptly,” with all of the top 20 PDPs having billing cycles of 15 days or less, while eight reported an even shorter billing cycle of 7-10 days, the Pharmaceutical Care Management Association (PCMA) said today. This study confirms that pharmacists are typically paid in 30 days or less in keeping with the pledge made by PCMA member companies and corresponding to payment schedules of 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 sponsor five national prescription drug plans (PDPs) and act as a subcontractor for other PDPs and Medicare Advantage plans.

“These data confirm that pharmacists are being paid promptly in Medicare Part D just as they are in the commercial market. Nonetheless, policymakers should be concerned that this issue has become a Trojan horse for an extremely expensive agenda in which the drugstore lobby wins and consumers lose,” said PCMA President Mark Merritt. “This agenda includes mandating a six-fold increase in generic dispensing fees, expensive changes in Medication Therapy Management programs and other provisions that would cost billions of dollars without offering any corresponding value in return.”

CMS surveyed the top 20 plans, which account for 94 percent of all PDP enrollment. According to the survey:

All of the top 20 PDPs have a billing cycle of 15 days or less, with 8 of the top 20 reporting a billing cycle of 7-10 days;

18 of the top 20 PDPs pay pharmacies within 30 days of receipt of first clean claim in the billing cycle. The other two PDPs have contract terms that generally lead to payment within 30 days, but not necessarily in all cases;

In addition, CMS also stated that, “outside of Medicare, payment within 30 days is largely the industry standard, indicating that the payment timelines in Medicare are comparable to or better than those that exist elsewhere in the health insurance industry.”
PCMA strongly believes CMS’ findings underscore plans’ commitment to paying all claims within 30 days or less of receipt, while also serving to refute charges of the contrary by the drugstore lobby. Through legislative efforts, the drugstore lobby is seeking to impose restrictive claims-payment standards and also mandate ‘one-size-fits-all’ Medication Therapy Management (MTM) programs and excessive generic dispensing fees.

Last month, PCMA released a study from the Moran Company that found the prompt pay and MTM provisions in S. 2563, a proposal sponsored by Senator Thad Cochran (R-Miss.), 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. PCMA requested a cost analysis of S. 2563 because the provisions are even less onerous than the other, more extreme measures pending in Congress, including two other bills, HR 5182 and HR 5166 that would increase costs more than $9 billion.
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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