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WASHINGTON —A new push to crack down on the massive and costly fraud and abuse that plagues Medicare and Medicaid is drawing praise from the pharmacy benefit management industry. But it also drew another volley against PBM practices by the independent pharmacy lobby.
Both Congress and the White House are targeting fraud, waste and improper billing in federal healthcare outlays. The Centers for Medicare and Medicaid Services has proposed new regulations to help prevent what the agency said is $55 billion in annual improper payments to providers and health plans. In a related development, the House Energy and Commerce Subcommittee on Health is looking at ways to attack the problem, and held a hearing Sept. 22 titled, “Cutting Fraud, Waste and Abuse in Medicare and Medicaid.”
The National Community Pharmacists Association quickly weighed in on the issue. Speaking on behalf of independent pharmacy owners, the NCPA submitted a statement at the hearing that accused the pharmacy benefit management industry of responsibility, directly or indirectly, for much of the abuse and unnecessary outlays by Medicare and Medicaid.
Reform of the Medicare and Medicaid payment system, NCPA told the congressional panel, should include “targeting PBMs by examining their past record of alleged systematic chicanery. From 2004 to 2008, the three major PBMs…faced six major federal or multidistrict cases over allegations of fraud; misrepresentation to plans, patients and providers; improper therapeutic solutions; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards,” the pharmacy group asserted. What’s more, the NCPA charged in its testimony, “PBMs are virtually unregulated at the state or federal level, even though they manage numerous prescription drug plans funded by billions of taxpayer dollars.”
The group urged Congress to pass legislation “to rein in the waste being generated by the business practices of pharmacy benefit managers under Medicare and Medicaid” and to increase the transparency of PBM audit practices. In its strongly worded statement, the NCPA also asked the panel to “address through oversight or legislation CMS’ failure, in certain circumstances, to assert its authority to fight fraud, waste and abuse.”
Not surprisingly, the PBM industry has a very different take on payment-reform efforts. Responding to new proposed regulations from CMS to combat fraud and abuse, Pharmaceutical Care Management Association president and CEO Mark Merritt said the government’s focus should be on preventing abuse rather than on pursuing wrongdoers after the fact for fraudulent billing practices.
“Pharmacy benefit managers agree that prevention, not ‘pay and chase,’ is the key to fighting fraud,” Merritt noted. “That’s why PBMs use a variety of state-of-the-art techniques to detect and prevent fraud, waste and abuse before it happens. Unfortunately, some public policies undermine the fight against fraud by requiring payers to include pharmacies in their networks that have been banned from federal programs [known as ‘any-willing pharmacy’ policies],” Merritt added. The potential for abuse, he went on, also is exacerbated by other policies that “grant pharmacies that commit fraud a long waiting period before removing them from networks, [and] grant pharmacies an advanced-notice ‘heads up’ before performing audits.”
Merritt also took the opportunity to reiterate the PBM industry’s intense opposition to the “promptpay” requirements long sought by chain and independent pharmacies, which historically have been plagued with slow reimbursements for drugs dispensed to public and private third-party payers. Policies that require payers to “accelerate payments,” PCMA’s leader charged, leave “less time to detect and prevent fraudulent Medicare claims before payments are made”—so-called “prompt pay.”