CMS Bans Prorated Pharmacy Dispensing Fees In Final Rule On Part D, MA

In a win for pharmacies that service nursing home residents, CMS prohibited prorated dispensing fees in a final rule on Medicare Advantage and drug plans issued late Friday (Feb. 6).

The Senior Care Pharmacy Coalition praised CMS for prohibiting what it says are pay arrangements that penalize efficient dispensing techniques. Long-term care pharmacies are angry that some pharmacy benefit managers have started prorating dispensing fees. Pharmacy benefit managers typically have paid pharmacies a flat fee to cover the cost of dispensing drugs. The Affordable Care Act requires that pharmacies dispense certain Part D drugs to nursing home residents in amounts no greater than two week supplies. Some pharmacy benefit managers have started paying pharmacies for only a portion of the dispensing fee when patients stop taking medications before the end of the two-week cycle.

However, the rule holds off on a separate long-term pharmacy measure proposal to waive short-cycle dispensing requirements for pharmacies using restock and reuse methodologies.

Another key provision of the rule requires Medicare Advantage plans and Part D sponsors to have business continuity plans that restore essential operations within 72 hours of failures, rather than within 24 hours, as CMS proposed. CMS did not finish its proposal to require Medicare Advantage plans to have a plan to restore claims and appeals processing within 72 hours.

The final rule also includes changes to audit and inspection authority. It lets CMS make Medicare Advantage and drugs plans hire independent auditors to validate that plans have corrected problems found during CMS audits. Although CMS may require independent auditors case by case to validate corrections, the regulation does not finish a proposal to require that plans hire independent auditors to conduct full or partial program audits.

The rule requires that people be citizens or lawfully in the country to enroll in Medicare plans, and it requires plans to disenroll individuals when they lose that status.

This is the second final rule CMS has put out on requirements for Medicare Advantage and drug plans. CMS proposed the rule in January 2014, but backed off the most controversial aspects of that rule several months ago when it published the first final rule, and this final rule follows through on the rest of the regulation. The provisions that CMS dropped in March included measures aimed at reducing the number of Medicare protected drug classes, opening up preferred pharmacy networks, limiting the number of Part D plans insurers could offer and clarifying the “non-interference” clause, which blocks the government from negotiating drug prices with manufacturers.

Some lobbyists worried that CMS would revisit those proposals, but former CMS Administrator Marilyn Tavenner told Congress last year that CMS was “not interested in bringing back the pieces that we pulled.”

“The final regulation reflects consideration of public comments to a proposed rule that was published on January 10, 2014,” CMS says. “This February rule finalizes many, but not all, of the provisions that were proposed in the January 2014 proposed rule but not finalized in a final rule published on May 23, 2014.” — John Wilkerson(

See the original article on the Inside Health Policy website.