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Are Bargaining Groups Hired by Independent Drugstores Causing Payment Delays to Pharmacies?
Date:9/6/2007

PCMA Reaffirms PBMs Paying Clean Claims Within 30 Days

WASHINGTON, Sept. 6 /PRNewswire-USNewswire/ -- Reaffirming that its member companies are paying clean Medicare Part D claims to pharmacies within 30 days, the Pharmaceutical Care Management Association (PCMA) today questioned whether independent drugstore bargaining organizations known as PSAOs could be a factor in late payments to pharmacies.

More than half of America's independent pharmacies hire Pharmacy Service Administration Organizations (PSAOs) to centralize and streamline the following kinds of functions:

-- Collectively bargain with pharmacy benefit mangers (PBMs) to get

favorable terms;

-- Acquire rebates from drug companies; and

-- Process claims/billing information on behalf of independent

pharmacies.

-- In these cases, while the pharmacy sends claims directly to the

PBM, it requires the PBM to send reimbursements to the PSAO.

-- After the PSAO receives the reimbursement from the PBM, it then

pays the pharmacy.

-- This middle step, which occurs at the request of the pharmacy,

could be causing any delays that might be occurring.

"One factor that may be overlooked by the independent drugstore lobby is that their own bargaining groups--PSAOs--could be slowing down payments," said PCMA President & CEO Mark Merritt. "When a PSAO is involved," Merritt added, "there is no guarantee that claims paid promptly by PBMs aren't getting held up by PSAOs. Since so many independent pharmacies use PSAOs, we'd hope that any study of payment practices thoroughly examines their role."

While generating deeper-than-expected discounts for beneficiaries on their necessary prescription medicines, PCMA member companies are also paying all clean claims within 30 days. The 30-day pharmacy claims timeframe is a standard consistent with physician and hospital claims in Medicare Parts A & B, the Federal Employees Health Benefits Plan (FEHBP), and 43 states. Last year, a survey from the Centers for Medicare & Medicaid Services (CMS) found that 18 of the top 20 Medicare prescription drug plans (PDPs) were paying pharmacy claims on a twice-a-month billing cycle of 15 days or less. Reducing the payment cycle would increase costs by creating a new set of administrative burdens for Part D sponsors without providing any corresponding benefit to America's seniors.

"Pharmacists deserve the same 30-day payment schedule that Medicare physicians and hospitals have. We certainly hope that independent pharmacies will evaluate the role of their own PSAOs to determine if reforms can be made there to speed the process along," said Merritt.

Medicare PDPs and the proven pharmacy benefit management tools they utilize are saving beneficiaries and Part D $693 billion over the 2008 to 2017 period, including $43 billion in reduced prescription drug costs in 2008 alone, according to a recent analysis from PricewaterhouseCoopers (PwC).

PCMA is the national association representing America's pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.


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SOURCE Pharmaceutical Care Management Association
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