May 24, 2011
(Washington, DC) — As Congress seeks solutions to lower health spending, the independent drugstore lobby is pushing new laws that will help them raise prescription drug costs. The Pharmaceutical Care Management Association (PCMA) has launched a new ad campaign highlighting this costly special interest agenda.
“Granting independent drugstores new powers to collectively bargain, evade routine, anti-fraud audits, and undermine competition will make drug costs skyrocket for consumers, taxpayers, employers, and unions,” said PCMA President and CEO Mark Merritt.
Independent Drugstore Lobby Agenda: Higher Costs, Less Accountability
New Collective Bargaining Rights. Independent drugstores enjoy numerous bargaining tools to gain market power in government and commercial programs, and the Federal Trade Commission (FTC) has stated that: “Giving health care providers . . . a license to engage in price fixing and boycotts in order to extract higher payments from third-party payers would be a costly step backward, not forward, on the path to a better health care system.”
The Congressional Budget Office (CBO) has found that special anti-trust protections for independent pharmacists would increase federal costs by $640 million over ten years and that increased drug costs to private health plans, employers, and consumers would result in “reductions in the scope or generosity of health insurance benefits, such as increased deductibles or higher copayments.” CBO’s analysis also shows that cost increases would be passed along to workers, reducing “both their taxable compensation and other fringe benefits.”
Fraud, Waste, and Abuse. A recent white paper published by the National Health Care Anti-Fraud Association (NHCAA), the leading national organization focused exclusively on combating health care fraud, also warns against the kind of legislative proposals promoted by the independent pharmacy lobby.
The paper, the “Seven Guiding Principles for Policymakers,” seeks to address the estimated $70 to $234 billion in annual financial losses resulting from fraud throughout the health care system and warns policymakers to avoid policies that could undermine fraud fighting efforts, including:
- Policies that undermine authority across Medicare to suspend payments when there is suspicion of fraud. The ability to stop fraud before paying a claim is more effective and more efficient than relying on paying first and then chasing after claims that are later found to be fraudulent. Congress should extend to Medicare Part D and independent drugstores the recently enacted statutory authority Congress provided in Medicare Parts A and B to suspend payment to health care providers upon a credible allegation of fraud, waste, or abuse.
- Policies that reduce payers’ time to verify pharmacy claims before payment (“Prompt Pay” policies). NHCAA states: “if claims are not rushed through the payment process, auditors and investigators will have more opportunities to detect attempts at fraud before they come to fruition.” So-called “prompt pay” laws in Medicare Part D that mandate rapid payment to independent pharmacies reduce the time available to detect pharmacy fraud, waste, and abuse.
- Policies that make payers partner with pharmacies that are banned from federal programs (“Any Willing Pharmacy” policies). Legislation that would force plans to include in their networks pharmacies that have been banned from federal programs “runs counter” to preventing fraud, according to NHCAA. This low bar would allow admission for pharmacists “even if they have records of harmful prescription errors or a high number of consumer complaints.”
- Policies that undermine payers’ ability to audit independent pharmacies suspected of fraud (“Audit Reform” policies). NHCAA supports measures that would “protect the integrity of health care audits by giving auditors more discretion and flexibility to perform their duties.” Unfortunately, legislation championed by the independent drugstore lobby would instead grant pharmacies (even those with wasteful or abusive practices) an advance notice “heads up” before performing audits.