Time for Policymakers to Choose: ‘Prompt Pay’ Mandate or Postpone AMP Reimbursement Cuts
June 24, 2008
Accelerated Payment Cycle Would Create a ‘Stampede’ of Other Medicare Providers Demanding the Same Treatment Next Year
(Washington, DC)—As policymakers consider what to include in the final Medicare package, they face the decision of either supporting costly Medicare “prompt pay” requirements for pharmacies or postponing the Average Manufacturer Price (AMP) pharmacy reimbursement cuts in Medicaid which would ultimately harm both pharmacies and consumers, the Pharmaceutical Care Management Association (PCMA) said today.
“Now that we’re in the endgame, Congress must choose between a reasonable AMP delay and a new policy to pay drugstores twice as fast as every other Medicare provider,” said PCMA President and CEO Mark Merritt. “Delaying AMP is supported by a broad coalition of pharmacists, PBMs, and insurers. ‘Prompt pay’ has no such support and would undermine the affordability and integrity of the Medicare program.”
PCMA joined a group representing almost every segment of the pharmacy supply chain who signed a letter to Congressional leaders urging passage of legislation that will postpone the AMP payment reductions that threaten to devastate retail pharmacies and their low income patients. Those signing the letter included:
- American Pharmacists Association
- Food Marketing Institute
- Generic Pharmaceutical Association
- Healthcare Distribution Management Association
- National Alliance of State Pharmacy Associations
- National Association of Chain Drug Stores
- Pharmaceutical Care Management Association
Medicare prescription drug plans (PDPs) pay pharmacy claims within 30 days, a standard consistent with Medicare Parts A & B, the federal employees’ health plan, and the private sector. The 30-day payment standard allows plans to batch claims for administrative efficiency and conduct audits to detect fraud and abuse.
The independent drugstore lobby partnered to create its own drug plan—Community Care Rx (CCRx)—which pays claims in 30 days—twice the length of time as the 14 day mandate in their own bill. A link to the payment schedule for “one of the nation’s top Medicare Part D prescription drug plans” is provided.
Three separate but remarkably consistent studies—including the drugstore lobby’s own study—highlight that PBMs are paying claims on time.
Grant Thornton study (the drugstore lobby’s own study) that shows pharmacies are being paid within 30 days (See Page 15 for findings on average payment time).
- Part D claims are being paid within 21-25 days, according to the Centers for Medicare & Medicaid Services.
- Part D claims are paid within 23 days, according to a PricewaterhouseCoopers (PwC) study.
To highlight the costs associated with the independent drugstore lobby’s agenda, PCMA recently released a series of new prints ads. One print ad warns policymakers that other Medicare providers—including doctors and hospitals—would likely demand the “same prompt-pay deal” next year if Congress requires pharmacists to be paid twice as fast in Medicare. An additional print ad highlights how “finding the bad apples isn’t easy” in detecting fraud, waste, and abuse and that proposals mandating “prompt pay” would make it even tougher.
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.