Legislation introduced to standardize, improve PBM Medicare audits

WASHINGTON — Industry-supported legislation designed to improve pharmacy benefits manager standards under the Medicare prescription drug program — standards that will further provide fair audits of and payments to pharmacies — was presented before the House of Representatives on Tuesday.

The Medicare Pharmacy Transparency and Fair Auditing Act, introduced by Rep. Cathy McMorris Rodgers, R-Wash., after 2013 would preclude prescription drug plan sponsors from contracting with a PBM unless they submit to a series of pharmacy audit requirements. For example, the period covered by the audit would not exceed two years from the date a claim was submitted to, or adjusted by, the pharmacy benefits manager; the PBM would not apply recordkeeping requirements that are more stringent than those required by federal or state law; and PBMs would not be able to disallow or reduce payments with respect to a claim submitted by the pharmacy because of clerical or recordkeeping errors.

The legislation also would give local pharmacists some basic insight into a part D plan’s “maximum allowable cost” or MAC. "Currently, independent pharmacies must evaluate 'take-it-or-leave-it' contract offers from part D plans or pharmacy benefit managers that leave pharmacists in the dark as to how reimbursement caps, or MACs, are determined for many common generic medications," the National Community Pharmacists Association noted in a statement released in support of the legislation. "As a result, independent pharmacies are increasingly — and without warning — reimbursed at rates that fluctuate and fail to cover either the pharmacy’s cost of dispensing or its cost of acquiring that particular drug."
 
An August 2011 survey of 1,850 community pharmacists conducted by NCPA illustrated the need for the reforms embodied by H.R. 4215, the association said. "[As much as] 62% of pharmacists considered the audit requirements to be completely inconsistent from one health plan to another; 48% of pharmacists reported auditors asking them to justify claims that are two years old or older; and, of the pharmacists who report having appealed a PBM audit, 81% described that process as burdensome and unsatisfactory."

Nearly all (91%) community pharmacists reported receiving little or no information justifying how PBMs arrive at reimbursement rates for generic drugs and how often the prices will be updated to reflect a pharmacy's cost.

The bill, H.R. 4215, was referred to both the House Committee on Energy and Commerce and to the House Committee on Ways and Means.